10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended September 30, 2003
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From ________ To ________

Commission File Number: 0-20710

PeopleSoft, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of	68-0137069
incorporation or organization)	(I.R.S. Employer Identification No.)

4460 Hacienda Drive, Pleasanton, California 94588-8618
(Address of principal executive offices, Zip Code)

(925) 225-3000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  o

Indicate by check mark whether Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes  x  No  o On

November 10, 2003, the Registrant had 374,937,532 shares of common stock outstanding.

TABLE OF CONTENTS

	PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002	2
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2003 and September 30, 2002	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and September 30, 2002	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	32
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 2.	Changes in Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Submission of Matters to a Vote of Security Holders	46
Item 5.	Other Information	46
Item 6.	Exhibits and Reports on Form 8-K	46
SIGNATURES		46

1

PART I – FINANCIAL INFORMATION

ITEM 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PEOPLESOFT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

			September 30, 2003			December 31, 2002
ASSETS
Current assets:
	Cash and cash equivalents		$	595,317		$	319,344
	Short-term investments			971,955			1,588,172
	Accounts receivable, net			421,548			357,353
	Deferred tax assets			26,164			40,559
	Prepaid expenses and other current assets			76,368			45,448
		Total current assets		2,091,352			2,350,876
Property and equipment, net				454,636			222,800
Long term investments and restricted cash				81,323			21,946
Deferred tax assets				53,335			172,255
Capitalized software, net				249,515			44,101
Goodwill				991,015			54,294
Intangible assets and other				469,493			5,359
		Total assets	$	4,390,669		$	2,871,631
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	58,875		$	23,356
	Accrued liabilities			256,401			109,331
	Accrued compensation and related expenses			193,507			172,566
	Income taxes payable			102,154			71,163
	Short-term deferred revenues			531,123			422,657
		Total current liabilities		1,142,060			799,073
Long-term deferred revenues				117,459			95,460
Other liabilities				36,552			21,486
		Total liabilities		1,296,071			916,019
Commitments and contingencies (see note 10)
Stockholders’ equity:
	Common stock			3,745			3,150
	Additional paid-in capital			2,428,669			1,382,442
	Retained earnings			667,471			599,803
	Treasury stock			(36,620	)		(35,563	)
	Accumulated other comprehensive income			31,333			5,780
		Total stockholders’ equity		3,094,598			1,955,612
		Total liabilities and stockholders’ equity	$	4,390,669		$	2,871,631

See accompanying notes to unaudited condensed consolidated financial statements.

2

PEOPLESOFT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

			Three Months Ended September 30,					Nine Months Ended September 30,
			2003			2002		2003		2002
Revenues:
	License fees		$	160,459		$	121,616	$	353,026	$	386,835
	Maintenance revenue			234,582			176,874		640,066		512,774
	Professional services revenue			229,053			172,723		588,700		529,553
		Service revenue		463,635			349,597		1,228,766		1,042,327
	Development and other service revenue			—			—		—		7,530
		Total revenues		624,094			471,213		1,581,792		1,436,692
Costs and expenses:
	Cost of license fees			21,941			11,484		40,230		33,103
	Cost of services			230,189			159,369		560,356		495,058
	Cost of development and other services			—			—		—		6,755
	Sales and marketing expense			168,554			127,641		419,604		378,373
	Product development expense			127,711			83,002		296,062		252,882
	General and administrative expense			61,879			27,209		135,918		84,851
	Restructuring, acquisition and other charges			23,273			—		37,072		11,479
		Total costs and expenses		633,547			408,705		1,489,242		1,262,501
Operating income (loss)				(9,453	)		62,508		92,550		174,191
Other income, net				7,556			5,607		19,234		21,324
Income (loss) before provision for income taxes				(1,897	)		68,115		111,784		195,515
Provision for income taxes				4,243			23,500		42,911		70,336
Income (loss) before minority interest				(6,140	)		44,615		68,873		125,179
Minority interest in net income				1,205			—		1,205		—
Net income (loss)			$	(7,345	)	$	44,615	$	67,668	$	125,179
Basic income (loss) per share			$	(0.02	)	$	0.14	$	0.21	$	0.40
Shares used in basic income (loss) per share computation				357,289			312,214		329,511		310,231
Diluted income (loss) per share			$	(0.02	)	$	0.14	$	0.20	$	0.39
Shares used in diluted income (loss) per share computation				357,289			315,367		333,673		321,060

See accompanying notes to unaudited condensed consolidated financial statements.

3

PEOPLESOFT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

				Nine Months Ended September 30,
				2003			2002
Operating activities:
Net income				$	67,668		$	125,179
Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			113,827			71,966
		Provision for doubtful accounts			7,151			5,914
		Tax benefits from employee stock transactions			6,235			23,263
		Benefit for deferred income taxes			(12,101	)		(4,085	)
		Gain on sales of investments and disposition of property and equipment, net			(3,535	)		(3,251	)
		Non-cash stock compensation			7,359			5,831
		Restructuring, acquisition and other charges			17,519			11,479
		Changes in operating assets and liabilities:
			Accounts receivable		106,963			53,219
			Accounts payable and accrued liabilities		(18,433	)		(33,461	)
			Accrued compensation and related expenses		(28,074	)		(31,675	)
			Income taxes, net		(8,831	)		27,401
			Deferred revenues		41,607			(24,080	)
			Other		14,576			10,454
		Net cash provided by operating activities			311,931			238,154
Investing activities:
Purchase of investments					(8,540,083	)		(7,022,567	)
Proceeds from sales and maturities of investments					9,159,986			6,810,089
Purchase of property and equipment					(231,365	)		(72,206	)
Acquisitions, net of cash acquired					(519,934	)		(120,894	)
		Net cash used in investing activities			(131,396	)		(405,578	)
Financing activities:
Retirement of convertible debt					—			(57,000	)
Repurchase of stock					(1,057	)		—
Proceeds from employee stock transactions					78,439			96,600
		Net cash provided by financing activities			77,382			39,600
Effect of foreign exchange rate changes on cash and cash equivalents					18,056			5,775
Net increase (decrease) in cash and cash equivalents					275,973			(122,049	)
Cash and cash equivalents at beginning of period					319,344			433,700
Cash and cash equivalents at end of period				$	595,317		$	311,651
Supplemental disclosures:
	Cash paid for interest			$	458		$	3,331
	Cash paid for income taxes			$	55,882		$	20,756

See accompanying notes to unaudited condensed consolidated financial statements.

4

PEOPLESOFT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

     The accompanying financial statements for the three and nine months ended September 30, 2003 and 2002 have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. These financial statements are unaudited and in the opinion of management, include all necessary adjustments for the fair presentation of the Company’s financial position, results of operations and changes in cash flows. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that may affect the amounts reported in the accompanying financial statements. Despite the Company’s best effort to make these good faith estimates and assumptions, actual results may differ. Certain prior period amounts have been reclassified to conform to the current period presentation.

     These interim financial statements are prepared in accordance with Securities and Exchange Commission rules and regulations, which allow certain information and footnote disclosures, normally included in annual financial statements, to be condensed or omitted. As a result, these interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

2. Income (Loss) Per Share

     Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, excluding unvested restricted stock. Diluted income (loss) per share is computed by dividing net income (loss) by the sum of weighted average number of common shares outstanding and the number of potential dilutive common shares outstanding during the period, if dilutive. Potential dilutive common shares consist of shares issuable upon the exercise of stock options, restricted stock not yet vested, and shares issuable resulting from withholdings associated with the Company’s employee stock purchase plan, using the treasury stock method.

     The following table sets forth the computation of basic income (loss) per share and diluted income (loss) per share (in thousands, except per share amounts):

			Three Months Ended September 30,					Nine Months Ended September 30,
			2003			2002		2003		2002
Numerator:
	Net income (loss)		$	(7,345	)	$	44,615	$	67,668	$	125,179
Denominator:
	Denominator for basic income (loss) per share - Weighted average shares outstanding			357,289			312,214		329,511		310,231
		Employee stock options and other		—			3,153		4,162		10,829
	Denominator for diluted income (loss) per share - Weighted average shares outstanding, assuming exercise of potential common shares			357,289			315,367		333,673		321,060
Basic income (loss) per share			$	(0.02	)	$	0.14	$	0.21	$	0.40
Diluted income (loss) per share			$	(0.02	)	$	0.14	$	0.20	$	0.39

     The following table sets forth the potential common shares that were excluded from the diluted income (loss) per share computations because the exercise prices were greater than the average market price of the common shares during the period or were otherwise not dilutive (in millions):

5

	Three Months Ended September 30,				Nine Months Ended September 30,
	2003		2002		2003		2002
Employee stock options		88.5		52.8		44.5		25.5
Unvested restricted stock		0.2		—		1.0		—
Total shares excluded		88.7		52.8		45.5		25.5

     The weighted average exercise prices of the employee stock options that are antidilutive for the three months ended September 30, 2003 and 2002 were $21.98 and $26.69 per share, respectively, and for the nine months ended September 30, 2003 and 2002 were $28.72 and $33.29 per share, respectively.

     On October 27, 2003, the Company implemented a stock repurchase program in which up to $350 million of its common stock, par value $0.01 per share, is eligible to be repurchased by the Company from time to time in the open market or through privately negotiated purchases or otherwise, depending on market prices and other conditions. As of November 10, 2003, the Company had repurchased approximately 12 million shares of its common stock for $253.4 million.

3. Stock-Based Compensation

     The Company accounts for employee stock-based compensation in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB Opinion No. 25). The following table illustrates the effect on net income (loss) and earnings per share as if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (SFAS 123), to stock-based employee compensation for the three and nine months ended September 30, 2003 and 2002 (in thousands, except per share amounts).

		Three Months Ended September 30,						Nine Months Ended September 30,
		2003			2002			2003			2002
Net income (loss), as reported		$	(7,345	)	$	44,615		$	67,668		$	125,179
	Add: Stock-based employee compensation expense included in reported net income (loss), net of tax		2,910			1,786			6,975			5,111
	Deduct: Stock-based employee compensation expense determined under the fair value method, net of tax		(44,945	)		(51,318	)		(119,831	)		(138,326	)
	Pro forma net loss	$	(49,380	)	$	(4,917	)	$	(45,188	)	$	(8,036	)
Basic income (loss) per share
	As reported	$	(0.02	)	$	0.14		$	0.21		$	0.40
	Pro forma	$	(0.14	)	$	(0.02	)	$	(0.14	)	$	(0.03	)
Diluted income (loss) per share
	As reported	$	(0.02	)	$	0.14		$	0.20		$	0.39
	Pro forma	$	(0.14	)	$	(0.02	)	$	(0.14	)	$	(0.03	)

4. Comprehensive Income (Loss)

     Comprehensive income (loss) primarily includes unrealized gains or losses on investments, mark-to-market adjustments on interest rate swap transactions, and foreign currency translation adjustments, which are reflected as a component of stockholders’ equity. The components of comprehensive income (loss), net of tax, were as follows (in thousands):

6

			Three Months Ended
			September 30,						Nine Months Ended September 30,
			2003			2002			2003			2002
Net income (loss)			$	(7,345	)	$	44,615		$	67,668		$	125,179
Other comprehensive income:
	Net unrealized gain (loss) on investments			177			(374	)		1,494			(676	)
	Foreign currency translation adjustments			1,399			(4,629	)		21,130			10,335
	Interest rate swap transactions:
		Net unrealized loss on cash flow hedges		—			(296	)		(58	)		(1,151	)
		Reclassification adjustment for earnings recognized during the period		—			870			2,106			2,960
		Reclassification adjustment for realized loss on the termination of interest rate swap agreements		—			—			881			—
Comprehensive income (loss)			$	(5,769	)	$	40,186		$	93,221		$	136,647

5. Derivative Financial Instruments

     Derivative financial instruments are only utilized by the Company to reduce foreign currency exchange and interest rate risks. The Company does not hold any derivative financial instruments for trading or speculative purposes.

Forward Foreign Exchange Contracts

     The Company has a foreign exchange hedging program principally designed to mitigate the potential impact due to changes in foreign currency exchange rates. Forward exchange contracts are primarily used to hedge foreign currency exposures and generally have terms of two months or less. The derivatives used in the foreign exchange hedging program are not designated as cash flow or fair value hedges under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133), as amended. These contracts are recorded on the balance sheet at fair value in “Accrued liabilities.” Changes in fair value of the contracts and the amounts being hedged are included in “Other income, net.”

     During the three months ended September 30, 2003 and 2002, the Company recorded net foreign currency transaction losses of $0.7 million and gains of $0.3 million, respectively. During the nine months ended September 30, 2003 and 2002, the Company recorded net foreign currency transaction losses of $1.8 million and gains of $2.8 million, respectively. At September 30, 2003, each of the foreign exchange contracts matured within 60 days and had a book value that approximated fair value. Neither the cost nor the fair value of these forward foreign exchange contracts was material at September 30, 2003.

     At September 30, 2003, the Company had the following outstanding forward foreign exchange contracts to exchange foreign currency for U.S. dollars (in millions):

	Notional
Foreign Currency	Amount
British pounds	$	13.6
Singapore dollars		6.1
New Zealand dollars		3.1
Australian dollars		1.6
Hong Kong dollars		1.0
Taiwanese dollars		0.9
Danish krone		0.8
Swiss francs		0.5
Swedish krona		0.4
	$	28.0

     At September 30, 2003, the Company had the following outstanding forward foreign exchange contracts to exchange U.S. dollars for foreign currency (in millions):

	Notional
Foreign Currency	Amount
Euros	$	20.0
Mexican pesos		10.1
Canadian dollars		6.4
Japanese yen		3.8
South African rand		0.9
	$	41.2

7

     At September 30, 2002, the Company had the following outstanding forward foreign exchange contracts to exchange foreign currency for U.S. dollars (in millions):

	Notional
Foreign Currency	Amount
Singapore dollars	$	5.3

     At September 30, 2002, the Company had the following outstanding forward foreign exchange contracts to exchange foreign currency for Euros (in millions):

	Notional
Foreign Currency	Amount
South African rand	$	2.5

     At September 30, 2002, the Company had the following outstanding forward foreign exchange contracts to exchange U.S. dollars for foreign currency (in millions):

	Notional
Foreign Currency	Amount
Euros	$	9.8
South African rand		2.5
Swiss francs		2.1
Canadian dollars		2.0
British pounds		1.0
New Zealand dollars		0.9
Swedish krona		0.8
Japanese yen		0.7
Australian dollars		0.6
Brazilian reals		0.6
Chilean pesos		0.4
	$	21.4

Interest Rate Swap Transactions

     The Company used interest rate swap transactions to manage its exposure to interest rate changes on synthetic lease obligations related to certain of its headquarters facilities located in Pleasanton, California. The swaps had an aggregate notional principal amount of $175.0 million and matured at various dates in 2003, consistent with the expiration of the synthetic leases. Under the swap agreements, the Company received a variable interest rate based on the three month LIBOR rate and paid a weighted average fixed interest rate of 6.8%. The swaps were designated under SFAS 133 as hedges against changes in the amount of future cash flows. In February 2003, the Company exercised its option under a synthetic lease agreement to purchase certain of its headquarters facilities located in Pleasanton, California for $70.0 million, and concurrently, swaps with an aggregate notional principal amount of $70.0 million matured. On June 30, 2003, the Company exercised its option under a synthetic lease agreement to purchase certain of its headquarters facilities located in Pleasanton, California for $105.0 million. As a result of this transaction, the Company terminated its remaining interest rate swap agreements with an aggregate notional principal amount of $105.0 million resulting in a pretax charge of $1.4 million to “Other income, net.” Included in “Accumulated other comprehensive income” at March 31, 2003 was a $1.8 million unrealized loss (after-tax) related to these interest rate swaps. In the second quarter of 2003, $0.9 million (after-tax) was reclassified from other comprehensive income into earnings by making scheduled swap payments and $0.9 million (after-tax) was recognized as a realized loss that was reclassified from other comprehensive income into earnings upon the termination of the remaining interest rate swap agreements.

Concentrations of Credit Risk

8

     The Company does not have a significant concentration of credit or operating risk in any one investment, industry or geographic region within or outside of the United States.

6. Restructuring Reserves

     During the third quarter of 2003, in connection with the acquisition of J.D. Edwards & Company (“J.D. Edwards”), management approved and initiated plans to restructure the operations of the Company to eliminate certain duplicative activities and reduce the Company’s cost structure. Consequently, the Company recorded approximately $8.8 million of costs of which $5.6 million relates to employee severance, $2.2 million relates to acquisition related employee retention, and $1.0 million relates to contract terminations. These costs are accounted for under Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (SFAS 146) and have been included as a charge to the results of operations in “Restructuring, acquisition and other charges.” As a result of the acquisition of J.D. Edwards, the Company recorded approximately $88.5 million of restructuring costs in connection with exiting certain pre-acquisition activities of J.D. Edwards including severance costs, change in control payments, costs of vacating duplicate facilities, contract termination costs, and other costs. Change in control payments are made to employees covered by a plan maintained by J.D. Edwards and subsequently assumed by PeopleSoft upon the completion of the merger. That change in control plan provides for specified severance and other change in control-related benefits to participants in the plan. The plan covered 197 senior management employees. Terminated individuals who will receive severance and change in control payments are primarily general and administrative, consulting, and sales and marketing employees. And accordingly, these costs have been recognized as a liability assumed in the purchase business combination. Future cash payments related to the restructuring reserves for future severance payments are expected to be made through July 2004.

     During the second quarter of 2003, the Company recorded pretax restructuring charges of $13.8 million. The $13.8 million of restructuring charges are included in “Restructuring, acquisition and other charges” and consisted of $4.6 million for employee severance, $7.5 million for the fair value of lease obligations associated with the closure of an office facility and $1.7 million for the impairment of related leasehold improvements. These costs are accounted for under SFAS 146.

     The restructuring charges recorded in the third quarter are based on the Company’s restructuring plans that have been committed to by management and are subject to refinement. Changes to the estimates of executing the currently approved plans of restructuring the pre-acquisition J.D. Edwards operations will be recorded as an adjustment to goodwill and any changes to the estimated costs of restructuring the pre-acquisition PeopleSoft operations will be reflected in the Company’s results of operations.

     Approximately $7.5 million of the third quarter restructuring costs accounted for under SFAS 146 is a cash obligation. Approximately $88.3 million of third quarter restructuring costs related to exiting certain pre-acquisition activities of J.D. Edwards is a cash obligation. These restructuring costs are expected to be funded through operating cash flow.

     The following table sets forth the activity in the Company’s restructuring reserves, accounted for under SFAS 146, for the quarter ended September 30, 2003, which are included in “Accrued liabilities” (in thousands).

								Contract
		Employee			Facilities			Termination and
		Costs			Obligations			Other			Total
Balance June 30, 2003		$	2,985		$	8,211		$	—		$	11,196
	Restructuring costs		7,480			—			1,294			8,774
	Cash payments		(2,446	)		(1,204	)		—			(3,650	)
	Non-cash items		(32	)		(79	)		(1,294	)		(1,405	)
Balance September 30, 2003		$	7,987		$	6,928		$	—		$	14,915

     Future cash payments related to the restructuring reserves accounted for under SFAS 146, which consist of future employee costs and facilities obligations payments, are expected to be made through October 2005.

     The following table sets forth the activity in the Company’s restructuring reserves, accounted for under EITF 95-3, for the quarter ended September 30, 2003, which are included in “Accrued liabilities” (in thousands).

9

								Contract
		Employee			Facilities			Termination and
		Costs			Obligations			Other			Total
Balance June 30, 2003		$	—		$	—		$	—		$	—
	Restructuring costs		48,391			30,114			10,033			88,538
	Cash payments		(12,929	)		(233	)		—			(13,162	)
	Non-cash items		—			—			(219	)		(219	)
Balance September 30, 2003		$	35,462		$	29,881		$	9,814		$	75,157

     Future cash payments related to the restructuring of reserves for employee costs are expected to be made through July 2004. Future cash contract termination payments are expected to be made through August 2007. Future cash payments related to facilities obligations are expected to be made through January 2008.

7. Products and Service Warranty Reserve

     The Company provides for the estimated cost of product and service warranties based on specific warranty claims, provided that it is both probable that a potential liability exists and that the amount can be reasonably estimated. Additional information may become available in the future which may result in changes to the originally estimated liability. In addition, if estimated claims are settled for amounts differing from the Company’s estimates, or if the estimated value of warranty claims were to increase or decrease, revisions to the estimated warranty liability may be required and warranty expense may change from current levels.

     The following table sets forth the activity in the Company’s product and service warranty reserve, which is included in “Accrued liabilities,” for the three months ended September 30, 2003 (in thousands):

		Total
Balance at June 30, 2003		$	9,535
	Acquisition-related additions		8,813
	Expense related to new claims		1,798
	Reduction in expense related to changes in estimates		(1,216	)
	Settlement of claims		(1,358	)
Balance September 30, 2003		$	17,572

8. Business Combinations

     Pursuant to an Amended and Restated Agreement and Plan of Merger with J.D. Edwards dated June 16, 2003, the Company acquired approximately 85% of the outstanding stock of J.D. Edwards on July 18, 2003 pursuant to an exchange offer and the remaining shares on August 29, 2003 pursuant to a merger. J.D. Edwards results have been included in the Company’s results since July 18, 2003, and minority interest in net income has been recorded from July 18, 2003 through August 29, 2003.

     J.D. Edwards offers enterprise software as well as consulting, education and support services. The Company’s board of directors approved the offer and the merger and determined that the offer and the merger would provide the Company with increased breadth and depth across the Company’s products, market segments and industry coverage. The Company’s board determined that J.D. Edwards’ expertise in manufacturing and distribution applications would strengthen the Company’s enterprise application suite. In addition, the board determined that J.D. Edwards mid-market focused applications and AS/400 based solutions would be additive to the Company’s Internet-based enterprise application suite.

     In the exchange offer, holders of J.D. Edwards common stock were entitled to make an election to tender their shares for cash or shares of PeopleSoft stock and such holders were entitled to receive cash, stock, or a combination of cash and stock, in each case having a value, on a per share basis of $7.05 plus 0.43 of a share of the Company’s common stock, allocated by prorating cash and shares available in the exchange offer among the elections made by the holders. At the completion of the acquisition, a total of 124,108,566 shares of J.D. Edwards common stock were tendered and accepted for exchange by PeopleSoft.

     The Company exchanged options held by J.D. Edwards employees with PeopleSoft options at a rate of 0.43 PeopleSoft options per J.D. Edwards option. Each exchanged PeopleSoft option retained the same vesting characteristics as the J.D. Edwards option it replaced and each J.D. Edwards option holder will receive $7.05 per option upon exercise.

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     The aggregate purchase price was approximately $2 billion, which consisted of approximately $875 million in cash, $962 million in PeopleSoft common stock and options, $88.5 million in restructuring costs (see footnote 6) and $27.5 million in deal costs and other incurred liabilities, which primarily consist of fees paid for legal, accounting and financial advisory services. A total of 53,312,015 PeopleSoft shares were issued in the transaction. The value of the stock issued to tendering J.D. Edwards shareholders was based upon the average of the closing prices of one share of the Company’s common stock during the five trading days ending June 18, 2003, which was $17.22. The fair value of the Company’s stock-based awards to employees was estimated using a Black-Scholes option pricing model. The fair value of the stock-based awards to employees was estimated assuming no expected dividends and the following weighted-average assumptions:

Expected life (in years)	1.90
Expected volatility	0.7468
Risk free interest rate	1.86	%

     The intrinsic value allocated to the unvested J.D. Edwards options assumed in the exchange was approximately $6.7 million and has been recorded as deferred compensation in the purchase price allocation. Option holders having options with strike prices of $7.05 (J.D. Edwards pre-merger price) or less were given 0.43 shares of the Company’s common stock plus $7.05 less the exercise price and any applicable taxes, in order to retire these options. Approximately 5.0 million of the approximately 8.4 million options issued are fully vested.

     In accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations,” the Company allocated the purchase price to the tangible assets, deferred compensation, liabilities and intangible assets acquired, as well as in-process research and development, based on their estimated fair values. The excess purchase price over the fair values was recorded as goodwill. The fair value assigned to intangible assets acquired was based on estimates and assumptions determined by management. The assignment of goodwill to the Company’s reportable segments for this acquisition has not yet been completed. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” goodwill and purchased intangibles with indefinite lives acquired after June 30, 2001 are not amortized but will be reviewed periodically for impairment. Purchased intangibles with finite lives are amortized on a straight-line basis over their respective useful lives. The total purchase price has initially been allocated as follows (in thousands):

Current assets		$	545,984
Property and equipment			75,349
Capitalized software			226,300
Goodwill			940,707
Intangible assets and other			535,497
Acquired IPR&D			14,500
Deferred compensation			6,766
	Total assets acquired and deferred compensation		2,345,103
Current liabilities			(187,729	)
Short-term deferred revenue			(69,953	)
Long term deferred revenues and other			(5,142	)
Long term deferred income taxes			(129,289	)
Total Purchase Price		$	1,952,990

     The purchase price allocation is preliminary and a final determination of required purchase accounting adjustments will be made upon the completion of a final analysis of the total purchase cost primarily related to estimating involuntary termination and facility related costs.

     In performing this preliminary purchase price allocation, the Company considered, among other factors, its intention for future use of the acquired assets, analyses of historical financial performance and estimates of future performance of J.D. Edwards’ products. The fair value of intangible assets was primarily based on the income approach. The royalty savings approach and the cost approach were also utilized when appropriate. The rates utilized to discount the net cash flows to their present values were based upon the Company’s weighted average cost of capital and range from 12% to 14%. These discount rates were determined after consideration of the Company’s rate of return on debt capital and equity, the weighted average return on invested capital and the risk associated with achieving forecasted sales related to the technology and assets acquired from J.D. Edwards. At September 30, 2003, identifiable intangible assets purchased in the J. D. Edwards acquisition consist of the following (in thousands, except for useful life):

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	Gross		Accumulated
Identifiable Intangible Assets	Value		Amortization		Useful Life
Capitalized software	$	226,300	$	8,742	5 years
Patented technology		60,300		2,246	5 years
Customer contracts and related relationships		105,600		2,839	7 years
Maintenance agreements and related relationships		305,500		6,554	8.7 years
Consulting contracts		5,800		4,321	3 months
Balance September 30, 2003	$	703,500	$	24,702		—

	For the Year
Estimated Amortization Expense	Ended
For the year ended 12/31/03	$	53,145
For the year ended 12/31/04		107,677
For the year ended 12/31/05		107,677
For the year ended 12/31/06		107,677
For the year ended 12/31/07 and thereafter		327,324
	$	703,500

     In-process research and development (“IPR&D”) of $14.5 million was expensed as “Restructuring, acquisition and other charges” in the accompanying condensed consolidated statements of operations because the purchased research and development had no alternative uses and had not reached technological feasibility. Four in-process research and development projects were identified relating to the JDE 5 product line. Two of the projects relate to enterprise resource planning software and have a value of approximately $8.9 million. The third project relates to customer relationship management software and has a value of approximately $3.2 million. The fourth project relates to technology designed to enhance the functionality of enterprise resource planning software and has a value of approximately $2.4 million. The value assigned to IPR&D was determined utilizing the income approach by segregating cash flow projections related to in process projects. The stage of completion of each in process project was estimated to determine the discount rate to be applied to the valuation of the in process technology. Based upon the level of completion and the risk associated with in process technology, a discount rate of 25% was deemed appropriate for valuing IPR&D.

Pro Forma Financial Information

     The unaudited financial information in the table below summarizes the combined results of operations of PeopleSoft and J.D. Edwards, on a pro forma basis, as though the companies had been combined as of the beginning of each period presented. The impact of the IPR&D charge and restructuring charges associated with the acquisition have been excluded. Investment banking fees relating to the merger recorded by J.D. Edwards have also been excluded. This pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition taken place at the beginning of each nine month period presented. The unaudited pro forma condensed combined statement of operations for the three months ended September 30, 2003 combines the historical results for PeopleSoft for the three months ended September 2003 and the historical results for J.D. Edwards for the period preceding the merger of July 1 through July 17. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2003 combines the historical results for PeopleSoft for the nine months ended September 2003, the historical results for J.D. Edwards for the period of July 1 through July 17, and the historical results for J.D. Edwards for the six months ended April 30, 2003. The unaudited pro forma condensed combined statement of operations for the three and nine months ended September 30, 2002 combines the historical results for PeopleSoft for the three and nine months ended September 2002 and the historical results for J.D. Edwards for the three and nine months ended July 31, 2002. The following amounts are in thousands, except per share amounts.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2003		2002		2003		2002
Revenues	$	686,848	$	685,069	$	1,962,787	$	1,996,375
Net income	$	17,205	$	31,364	$	13,931	$	43,056
Basic income per share	$	0.05	$	0.09	$	0.04	$	0.12
Diluted income per share	$	0.05	$	0.08	$	0.04	$	0.11

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9.     Oracle’s Unsolicited Tender Offer for PeopleSoft’s Common Stock and Customer Assurance Program

Unsolicited Tender Offer for PeopleSoft’s Common Stock

     On June 6, 2003, Oracle Corporation ("Oracle") announced that it intended to commence an unsolicited cash tender offer to purchase all of the outstanding shares of PeopleSoft for $16.00 per share, or approximately $5.1 billion in the aggregate (the “Oracle Offer”). The tender offer was formally commenced June 9, 2003, and on June 18, 2003 Oracle amended the offer to increase the purchase price $16.00 to $19.50 per share.

     The Board of Directors of the Company has determined that the Oracle Offer is not in the best interests of the stockholders and unanimously recommended that the stockholders reject the Oracle Offer and not tender their shares to Oracle for purchase. The expiration of the Oracle Offer is currently December 31, 2003.

     See Note  10, “Commitments and Contingencies” for information about litigation instituted by the Company and others related to the Oracle Offer.

Customer Assurance Program

     In response to Oracle’s public statements about its intent to discontinue the Company's products, and to minimize a potential loss of business during the Oracle Offer, the Company implemented a customer assurance program. This program incorporates a contingent change in control provision to its standard perpetual licensing arrangement. That provision provides customers purchasing application licenses with financial protection in the event that an acquirer discontinues or reduces (or with respect to certain contracts, announces the intention to discontinue or reduce) the licensing, development or support of PeopleSoft applications within a specified period after an acquisition, as defined in the program terms. That financial protection is in the form of a payment generally equal to two to five times the total arrangement fees. The multiple increases as the arrangement fees increase and will be generally paid provided the following events occur:

• either within one year or two years from the contract effective date, the Company is acquired or merged, and the Company is not the acquirer, and

• either within two or four years from the contract effective date, the acquiring company announces a) its intention to discontinue, or discontinues support services before the end of the normal support term as defined by the Company’s standard policies, or b) announces its intention to discontinue licensing PeopleSoft products to new customers, or c) announces its intention not to, or does not, provide updates or new releases for supportable products for a specified period; and

• the customer requests the payment in writing by a specified date and the customer has timely paid for support services in accordance with the terms of the customer’s agreement with the Company.

     The terms available under certain contracts also included additional payment triggers after an acquisition, including:

a) a reduction or the announced intention to reduce the amount of money spent to develop updates for the supportable modules or provide support services below the level spent by the Company in the 12 months preceding the acquisition, or

b) a reduction or the announced intention to reduce or limit the ability of the supportable modules to integrate or operate with third party products such as databases, software, products, and technologies.

     Customers retain rights to the licensed products whether or not the customer assurance program’s payments are triggered. No customer is entitled to a refund of arrangement fees paid under the customer’s contract with the Company, but the customer would be entitled to a payment under the customer assurance program if all of the conditions stated above are met.

     The customer assurance program has no financial statement impact on PeopleSoft. A contingent liability would only be recognized in the financial statements of the Company or its acquirer upon or after the consummation of a business combination provided all the events listed above occurred. As of September 30, 2003, the maximum potential amount of future payments which may be required to be made under the customer assurance program was approximately $807 million.

     The customer assurance program has expired. The Company is currently considering whether and on what terms it will extend the customer assurance program.

10. Commitments and Contingencies

Synthetic Leases

     The Company acquired four office buildings in Denver, Colorado (the “Denver Campus”) as a result of the acquisition of J.D. Edwards (see Note 8). The Denver Campus was constructed on land originally owned by J.D. Edwards and is leased under operating leases,

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which commenced in 1997 and 1998. The Company has six-year master lease agreements with a lessor, a wholly owned subsidiary of a bank, which together with a syndication of other banks provided financing of $121.2 million for the purchase and construction costs of the buildings through a combination of debt and equity. The lease payment obligations are based on a return on the lessor’s costs. The Company also has an option to refinance or purchase the leased properties at its sole discretion during the term of the lease for approximately $121.2 million, the amount expended by the lessor and syndication of banks for purchase and construction costs. In the event that the Company does not exercise its option to refinance or purchase the leased properties, it must guarantee the residual value of each building up to approximately 85% of its original cost. The Company does not believe that it will be called upon to perform under the residual guarantee to satisfy any financial obligations under the leases. The Company has evaluated the fair value of the Denver Campus and determined that at this point it is not probable that the value of the property at the end of the lease term will be less than the residual value guaranteed by the Company. The leases terminate between April and November of 2004. The Company is currently considering alternatives that include a refinancing of the existing arrangement or a cash purchase.

     The Company can elect to reduce the interest rate used to calculate lease expense by collateralizing the Denver Campus financing arrangements with investments. At September 30, 2003, investments totaling $117.6 million were designated as collateral for these leases. The Company may withdraw the funds used as collateral, excluding restricted amounts, at its sole discretion provided that it is not in default under the lease agreements. At September 30, 2003, funds used as collateral in the amount of $81.7 million were available for withdrawal. At September 30, 2003, the Company was in compliance with the covenants, representations, and warranties required under the lease agreements.

Customer Indemnification

     From time to time, the Company agrees to indemnify its customers against liability if the Company’s products infringe a third party’s intellectual property rights. As of September 30, 2003, the Company had no outstanding claims and was not subject to any pending litigation alleging that the Company’s products infringe the intellectual property rights of any third parties.

PeopleSoft Stockholder Actions — Delaware Court of Chancery

     On June 6, 2003, Felix Ezeir (Case No. 20349-NC), Teresita Fay (Case No. 20350-NC), Robert Crescente (Case No. 20351-NC), Robert Corwin (Case No. 20352-NC) and Ernest Hack (Case No. 20353-NC), all of whom purport to be stockholders of the Company, each filed a putative stockholder class action suit in the Delaware Court of Chancery against the Company and several of its officers and directors. The suits allege that defendants breached their fiduciary duties in connection with the Company’s response to Oracle’s tender offer purportedly announced on June 6, 2003. Plaintiffs in each of the actions seek injunctive relief and an accounting. On June 10, 2003, an action was filed in the Delaware Court of Chancery against these same defendants by Steven Padness (Case No. 20358-NC), making similar allegations and seeking similar relief. On June 12, 2003, an action was filed in the Delaware Court of Chancery against these same defendants by Thomas Nemes (Case No. 20365-NC), making similar allegations and seeking similar relief (the “Nemes Action”). The Nemes Action was amended on June 18, 2003, to include allegations and seeking relief similar to those in the above-referenced actions.

     On June 25, 2003, on an application filed in the Nemes Action, the Court consolidated the actions listed above under a single caption and case number: In re PeopleSoft, Inc. Shareholder Litigation, Consol. C.A. No. 20365-NC (“the Delaware shareholder litigation”). Defendants filed their Answer on June 25, 2003.

     On July 2, 2003, Richard Hutchings (Case No. 20403-NC) filed a putative stockholder class action suit in the Delaware Court of Chancery against the Company and several of its officers and directors. The suit alleges that defendants breached their fiduciary duties in connection with the Company’s response to Oracle’s tender offer purportedly announced on June 6, 2003. Plaintiff seeks injunctive relief, an accounting and damages. On July 22, 2003, the Court ordered that this action be consolidated with the other putative shareholder actions listed above.

     On November 6, 2003, plaintiffs in the Delaware Shareholder Litigation, filed a motion for preliminary injunction seeking to enjoin defendant PeopleSoft, and its directors, officers and employees from continuing the Company’s Customer Assurance Program. In their motion, plaintiffs assert that the terms of the revised Customer Assurance Program constitute a disproportionate and unreasonable response to any perceived threat from Oracle’s outstanding tender offer. Plaintiffs have moved for an order expediting consideration of their motion for a preliminary injunction.

     Document discovery has commenced in these consolidated actions and is coordinated with the discovery in the action filed against the Company by Oracle, discussed below.

     The Company believes that the claims and allegations asserted in each of the foregoing putative class action suits are without merit, and intends to vigorously defend against these lawsuits.

     In the opinion of management, resolution of these matters is not expected to have a material adverse effect on the financial position, results of operations and cash flows of the Company.

Oracle v. PeopleSoft — Delaware Court of Chancery

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     On June 18, 2003, Oracle filed a suit in the Delaware Court of Chancery (Case No. 20377-NC) against the Company, several of the Company’s directors (the “Director Defendants”), and J.D. Edwards, alleging that the Director Defendants breached their fiduciary duties in connection with the Company’s response to Oracle’s tender offer commenced on June 9 and amended June 18, 2003, and that J.D. Edwards aided and abetted such directors’ purported breach of fiduciary duty. Oracle seeks injunctive, declaratory and rescissory relief. On June 25, 2003, defendants filed their Answer. A hearing on a motion for preliminary injunction was scheduled for July 16, 2003, but was postponed upon the request of Oracle. On July 25, 2003, Oracle advised the Court that, in light of the second request for further information it received from the antitrust division of the United States Department of Justice regarding its tender offer, it did not believe it was appropriate to set a hearing date at this time. Document discovery has commenced in this litigation.

     On November 10, 2003, Oracle filed a motion for preliminary injunction, which is consolidated with the Delaware Shareholder Litigation in the Court of Chancery. In its motion for preliminary injunction, Oracle similarly seeks to enjoin the PeopleSoft defendants from continuing to offer to customers the terms contained in the revised Customer Assurance Program. On the same date, Oracle also filed motions seeking leave of Court to amend its Complaint and to expedite its motion for a preliminary injunction. The Court of Chancery has scheduled a hearing for November 19, 2003 to consider plaintiffs’ and Oracle’s motions to expedite consideration of their preliminary injunction applications.

     The Company believes that the claims and allegations asserted in this action are without merit, and intends vigorously to defend against this lawsuit.

     In the opinion of management, resolution of this matter is not expected to have a material adverse effect on the financial position, results of operations and cash flows of the Company.

PeopleSoft Stockholder Actions — California Superior Court for the County of Alameda

     On June 6, 2003, separate actions were filed in the California Superior Court for the County of Alameda by Doris Staehr (Case No. RG03100291), the West Virginia Laborers Pension Trust Fund (Case No. RG03100306), Lorrie McBride (Case No. RG03100300), and Ray Baldi (Case No. RG03100696) (collectively the “Initial Alameda Stockholder Actions”), all of whom purport to be stockholders of the Company, against several of the Company’s executive officers and directors. The suits allege that defendants breached their fiduciary duties in connection with (i) the Company’s response to Oracle’s tender offer announced on June 6, 2003, (ii) the Company’s agreement to acquire J.D. Edwards, and (iii) the implementation of the 2003 Directors Stock Plan, which was approved by Company stockholders at the 2003 Annual Meeting. Plaintiffs seek injunctive, rescissory and declaratory relief. On June 16, 2003, the Initial Alameda Stockholder Actions were consolidated. On June 11, 2003, two additional actions were filed by Moshe Panzer (Case No. RG03100876) and Arace Brothers (Case No. RG03100830) asserting similar claims. By Order dated July 10, 2003, the Panzer and Arace actions were consolidated with the Initial Alameda Stockholder Actions (collectively “the Alameda Stockholder Actions”).

     By Order dated June 18, 2003, the Alameda County Superior Court granted the Company’s Motion to Stay the Initial Alameda Stockholder Actions pending resolution of the claims involving the duties of the defendant directors by the Delaware Court of Chancery. By Order dated July 10, 2003, the Alameda County Superior Court also stayed the Panzer and Arace Brothers cases pursuant to the June 18, 2003 Order in the Initial Alameda Stockholder Actions. Accordingly, all of the Alameda Stockholder Actions are stayed by order of the Court.

     The Company believes that the claims and allegations asserted in each of the foregoing putative class action suits are without merit, and intends to vigorously defend against these lawsuits.

     In the opinion of management, resolution of these matters is not expected to have a material adverse effect on the financial position, results of operations and cash flows of the Company.

Other Matters

     The Company is party to various legal disputes and proceedings arising during the ordinary course of business. In the opinion of management, resolution of these matters is not expected to have a material adverse effect on the financial position, results of the operations and cash flows of the Company. An unfavorable resolution of some or all of these matters could materially affect the Company’s future results of operations or cash flows.

11. Segment Information

     The Company’s chief operating decision maker is its President and Chief Executive Officer (CEO). While the CEO is apprised of a variety of financial metrics and information, PeopleSoft is principally managed on a geographic basis in terms of revenue and segment margin performance. The Company’s two geographic business segments are: North America, which includes the United States and Canada, and International, which includes all other geographic regions. Operating expenses are managed functionally on a global basis. Assets are not identified with geographic segments because the CEO does not evaluate that information to make resource allocation decisions.

     Revenues are defined as revenues generated from unaffiliated customers. Cost of revenues includes the cost of license, cost of services and the direct selling cost included in sales and marketing expense. “Development and other services” revenue is not considered segment revenue. Correspondingly, “Cost of development and other services” is excluded from the cost of revenues for

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segment purposes. Operating expenses, which are managed functionally on a global basis, include corporate marketing, product development, general and administrative expenses as well as restructuring, acquisition and other charges.

     Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. The following table presents a summary of operating information for the three and nine months ended September 30, 2003 and 2002 (in thousands):

	Three Months Ended September 30,
	Operating Segments
2003	North America		International		Other		Total
Revenues	$	449,404	$	174,690	$	—	$	624,094
Cost of revenues		240,150		103,015		—		343,165
Segment margin	$	209,254	$	71,675	$	—	$	280,929
Operating expenses					$	290,382		290,382
Operating loss							$	(9,453	)

	Operating Segments
2002	North America		International		Other		Total
Revenues	$	356,668	$	114,545	$	—	$	471,213
Cost of revenues		164,795		69,204		—		233,999
Segment margin	$	191,873	$	45,341	$	—	$	237,214
Operating expenses					$	174,706		174,706
Operating income							$	62,508

	Nine Months Ended September 30,
	Operating Segments
2003	North America		International		Other		Total
Revenues	$	1,167,517	$	414,275	$	—	$	1,581,792
Cost of revenues		568,859		242,113		—		810,972
Segment margin	$	598,658	$	172,162	$	—	$	770,820
Operating expenses						678,270		678,270
Operating income							$	92,550

	Operating Segments
2002	North America		International		Other		Total
Revenues	$	1,088,858	$	340,304	$	7,530	$	1,436,692
Cost of revenues		509,855		204,963		6,755		721,573
Segment margin	$	579,003	$	135,341	$	775	$	715,119
Operating expenses						540,928		540,928
Operating income							$	174,191

     Revenues from the Europe/Middle-East/Africa region represented 18% and 14% of total revenues, respectively, for the three months ended September 30, 2003 and 2002. Revenues from the Europe/Middle-East/Africa region represented 15% and 14% of total revenues, respectively, for the nine month periods ended September 30, 2003 and 2002. No other international region had revenues equal to or greater than 10% of total revenues for the three and nine months ended September 30, 2003 or 2002. Revenues originating in each individual foreign country were less than 10% of total revenues for each of the three and nine months ended September 30, 2003 and 2002.

12. Recently Issued Accounting Standards

     In June 2001, FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations”, which addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and associated retirement costs. SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002.

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The adoption of SFAS No. 143 did not have a material effect on the Company’s results of operations or financial condition.

     In November 2002, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107, and rescission of FASB Interpretation No. 34” (FIN 45). FIN 45 requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken by issuing the guarantee. FIN 45 also requires additional disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees it has issued. The accounting requirements for the initial recognition of guarantees are applicable on a prospective basis for guarantees issued or modified after December 31, 2002. The disclosure requirements are effective during the first quarter of fiscal 2003 for all guarantees outstanding, regardless of when they were issued or modified. The adoption of FIN 45 did not have a material effect on the Company’s financial position, results of operations or cash flows.

     In December 2002, the FASB issued Statement of Financial Accounting Standards, “Accounting for Stock Based Compensation Transition and Disclosure–an Amendment of SFAS No. 123,” or SFAS 148, which amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The transition and annual disclosure provisions of SFAS 148 are effective for fiscal years ending after December 15, 2002. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No.123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The interim disclosure provisions are effective for the first interim period beginning after December 15, 2002 and have been included in these consolidated financial statements.

     In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities’’ (FIN 46) that addresses the consolidation of variable interest entities. FIN 46 provides guidance for determining when a primary beneficiary should consolidate a variable interest entity, or equivalent structure, that functions to support the activities of the primary beneficiary. FIN 46 is effective after January 31, 2003 for newly created variable interest entities. For variable interest entities created before February 1, 2003, the interpretation is effective for the period ending after December 15, 2003. On June 30, 2003, the Company exercised its option to purchase certain of its headquarters facilities located in Pleasanton, California for $105.0 million, prior to the maturity of the related synthetic lease. Had the Company not terminated this synthetic lease prior to July 1, 2003, it would have been required to consolidate its financial position and results of operations under the provisions of FIN 46. However, given the termination of the lease, the provisions of FIN 46 did not apply. The Denver Campus does not meet the definition of a variable interest entity for consolidated financial reporting. Accordingly, the Company has accounted for the leases related to the Denver Campus as operating leases.

     In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (SFAS 150) that establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS 150 had no effect on the Company’s consolidated financial position, results of operations or cash flows.

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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements” concerning non-historical facts or matters that are subject to risks and uncertainties. These forward-looking statements may be preceded by, followed by or include the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “projections,” “estimates,” “may,” “will,” “should,” “could” or similar expressions. These forward-looking statements represent our expectations or beliefs concerning future events, many of which are outside of our control. Forward-looking statements contained throughout this Quarterly Report include, but are not limited to, those identified with a footnote (1) symbol. Many possible events or factors could affect the actual financial results and performance of PeopleSoft. These factors or events could cause those results or performance to differ significantly from those expressed in our forward-looking statements.

     We caution that these forward-looking statements are further qualified by important factors, including those set forth below and elsewhere in this Quarterly Report that could cause actual results to differ significantly.

     These forward-looking statements and other forward-looking statements made elsewhere in this Quarterly Report are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. By their nature, they involve risks, uncertainties and assumptions. The future results of PeopleSoft may differ significantly from those expressed in these forward-looking statements. Stockholders are cautioned not to put undue reliance on any forward-looking statement. Any such statement speaks only as of the date of this Quarterly Report. We do not assume any obligation to update or release any revisions to any forward-looking statements, to report any new information, future event or other circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events, except as required by law. For a discussion of factors that could affect future results, see “Factors That May Affect Our Future Results Or The Market Price Of Our Stock.”

RESULTS OF OPERATIONS

     The following table shows the percentage of period over period growth and the percentage of total revenues represented by the line items in our condensed consolidated statements of operations:

				Percentage of									Percentage of
				Dollar			Percentage of						Dollar			Percentage of
				Change			Total Revenues						Change			Total Revenues
				Three months ended September 30,									Nine months ended September 30,
				2003/2002			2003			2002			2003/2002			2003			2002
Revenues:
	License fees				32	%		26	%		26	%		(9	)%		22	%		27	%
	Maintenance revenue				33			37			37			25			41			36
	Professional services revenue				33			37			37			11			37			37
			Service revenue		33			74			74			18			78			73
	Development and other service revenue				—			—			—			(100	)		—			—
		Total revenues			32			100			100			10			100			100
Costs and expenses:
	Cost of license fees				91			3			2			22			3			2
	Cost of services				44			37			34			13			35			34
	Cost of development and other services				—			—			—			(100	)		—			1
	Sales and marketing expense				32			27			27			11			26			26
	Product development expense				54			20			18			17			19			18
	General and administrative expense				127			10			6			60			9			6
	Restructuring, acquisition and other charges				100			4			—			223			2			1
		Total costs and expenses			55			101			87			18			94			88
Operating income (loss)					(115	)		(1	)		13			(47	)		6			12
Other income, net					35			1			1			(10	)		1			2
Income (loss) before provision for income taxes					(103	)		—			14			(43	)		7			14
Provision for income taxes					(82	)		1			5			(39	)		3			5
Income (loss) before minority interest					(114	)		(1	)		9			(45	)		4			9
Minority interest in net income					100			—			—			100			—			—
Net income (loss)					(117	)%		(1	)%		9	%		(46	)%		4	%		9	%
Diluted income (loss) per share					(114	)%								(49	)%

18

     The fluctuations in the operating results of the Company and its segments for the three and nine-month periods ended September 30, 2003 as compared to the three and nine-month periods ended September 30, 2002 reflect the acquisition of J. D. Edwards. On July 17, 2003, we acquired approximately 85% of the outstanding stock of J.D. Edwards. On August 29, 2003, the Company acquired the remaining shares of J.D. Edwards, completing the merger with J.D. Edwards. Accordingly, J.D. Edwards’ results have been included in the Company’s results since July 18, 2003, and minority interest in earnings has been recorded from July 18, 2003 through August 29, 2003.

     Net income decreased $52.0 million or 117% to a net loss of $7.3 million for the third quarter of 2003 from net income of $44.6 million for the third quarter of 2002. The diluted loss per share was $0.02 in the third quarter of 2003, compared to diluted income per share of $0.14 in the third quarter of 2002.

     For the nine months ended September 30, 2003, net income decreased $57.5 million or 46% to $67.7 million from $125.2 million for the nine months ended September 30, 2002. For the nine months ended September 30, 2003, diluted income per share decreased to $0.20 from $0.39 for the nine months ended September 30, 2002.

     Net loss for the quarter ended September 30, 2003 includes restructuring, acquisition and other charges totaling $23.3 million ($20.0 million after tax) related to our acquisition of J.D. Edwards. These costs primarily result from in-process research and development (“IPR&D”) charges, employee related termination costs and contract termination costs. Net income for the nine months ended September 30, 2003 also includes restructuring charges totaling $13.8 million ($8.5 million after-tax) resulting from headcount reductions within various worldwide administrative and support functions and the closure of an underutilized office facility. Refer to “Restructuring, Acquisition and Other Charges” below. Additionally, net income (loss) for the quarter and the nine months ended September 30, 2003 includes costs associated with the Company’s response to the Oracle Corporation (“Oracle”) offer of $17.9 million ($11.0 million after tax) and $31.4 million ($19.3 million after tax), respectively.

     Net income for the nine months ended September 30, 2002 includes a first quarter charge of $2.8 million ($1.7 million after-tax) for IPR&D related to the Annuncio Software, Inc. (Annuncio) business combination and a second quarter IPR&D charge of $8.7 million (no tax impact) related to the acquisition of Momentum Business Applications, Inc. (“Momentum”).

Revenues

     Our software products are generally licensed to end-user customers under non-exclusive, perpetual license agreements. Revenue from license fees increased by 32% to $160.5 million in the third quarter of 2003 from $121.6 million in the third quarter of 2002. The revenue increase is attributable to our acquisition of J.D. Edwards in July 2003. Revenue from license fees decreased by 9% to $353.0 million during the nine months ended September 30, 2003 from $386.8 million during the nine months ended September 30, 2002. The decrease in license revenue reflects a slowdown in information technology spending resulting from the global economic downturn during the first half of the year, partially offset by an increase in license fees due to the acquisition of J.D. Edwards in July 2003.

     Our service revenue consists of software maintenance revenue and professional services revenue (consulting fees, customer training fees and miscellaneous fees). Maintenance revenue was $234.6 million during the third quarter of 2003 compared to $176.9 million during the third quarter of 2002. The $57.7 million increase in maintenance revenue is primarily a result of the continuing addition of new customers to our installed base combined with a high renewal rate by existing customers and an increase in maintenance revenue attributable to the acquisition of J.D. Edwards in July 2003. Professional services revenue was $229.1 million during the third quarter of 2003 compared to $172.7 million during the third quarter of 2002. The $56.4 million increase in professional services revenue is primarily attributable to the acquisition of J.D. Edwards in July 2003. For the nine months ended September 30, 2003, maintenance revenue increased by 25% to $640.1 million from $512.8 million for the nine months ended September 30, 2002. The increase in maintenance revenue is primarily a result of the continuing addition of new customers to our installed base combined with a high renewal rate by existing customers and an increase in maintenance revenue attributable to the acquisition of J.D. Edwards in July 2003. For the nine months ended September 30, 2003, professional services revenue increased by 11% to $588.7 million from $529.6 million for the nine months ended September 30, 2002. The increase in professional services revenue is primarily attributable to the acquisition of J.D. Edwards in July 2003. As a result of our acquisition of J. D. Edwards, the deferred revenues on J.D. Edwards balance sheet at the closing of the merger, which predominately consists of maintenance revenue, has been reduced to fair value. The impact of this fair value reduction will reduce the amount of deferred maintenance revenue available to be recognized into earnings as a result of the J. D. Edwards acquisition through the end of 2004. We anticipate that maintenance revenue will increase in 2004 as customers renew their maintenance contracts. ⁽¹⁾

⁽¹⁾Forward-Looking Statement

19

     Development and other service revenue recognized in 2002 consisted of revenue generated pursuant to a development agreement with Momentum Development Corporation (“Momentum”). On April 9, 2002, we acquired Momentum. As a result of this acquisition, no development and other service revenue was subsequently generated. Revenue from development and other services was zero for the nine months ended September 30, 2003 as compared to $7.5 million for the same period in 2002. Cost of development and other services was zero for the nine months ended September 30, 2003 as compared to $6.8 million during the nine months ended September 30, 2002. Refer to “Business Combinations” in our Annual Report on Form 10-K for the year ended December 31, 2002 for further discussion about Momentum and the acquisition of Momentum. We do not expect to have any further “Development and other services” revenue or related costs.⁽¹⁾

Revenues by Segment

     At September 30, 2003 the Company is organized by geographic areas, in two operating segments: North America, which includes operations in the U.S. and Canada, and International, which includes operations in all other regions.

     Revenue from the North America segment during the third quarter of 2003 increased by 26% to $449.4 million, or 72% of total revenues, from $356.7 million, or 76% of total revenues during the third quarter of 2002. The increase in revenue during the quarter ended September 30, 2003 is primarily attributable to the inclusion of J.D. Edwards in July of 2003, which resulted in increases in license and service revenue. Revenues from the North America segment during the nine months ended September 30, 2003 increased by 7% to $1,167.5 million, or 74% of total revenues, from $1,088.9 million, or 76% of total revenues during the nine months ended September 30, 2002. The increase in revenue during the year-to-date period ended September 30, 2003 primarily reflects the increase in revenue during the third quarter of 2003, partially offset by the impact of the slowdown in information technology spending during the first half of the year.

     Revenues from the International segment during the third quarter of 2003 increased by 53% to $174.7 million, or 28% of total revenues, from $114.5 million, or 24% of total revenue in the third quarter of 2002. Revenues from the International segment increased by 22% to $414.2 million, or 26% of total revenues, during the nine months ended September 30, 2003 from $340.3 million, or 24% of total revenues, during the nine months ended September 30, 2002. The increase in revenue during the quarter and year-to-date periods ended September 30, 2003 is primarily attributable to the inclusion of J.D. Edwards in July of 2003, which resulted in increases in service and license revenue.

     Revenues from the Europe/Middle-East/Africa region represented 18% and 14% of total revenues, respectively, for the three months ended September 30, 2003 and 2002. Revenues from the Europe/Middle-East/Africa region represented 15% and 14% of total revenues, respectively, for the nine month periods ended September 30, 2003 and 2002. No other international region had revenues equal to or greater than 10% of total revenues for the three and nine months ended September 30, 2003 or 2002. Revenues originating in each individual foreign country were less than 10% of total revenues for each of the three and nine months ended September 30, 2003 and 2002.

Costs and Expenses

     Our software products are based on a combination of internally developed and acquired technology, as well as bundled third party technology and products. Cost of license fees consists principally of royalties, license fees for certain third party software products, amortization of capitalized software costs and product warranty costs. Cost of license fees increased to $21.9 million in the third quarter of 2003 from $11.5 million in the third quarter of 2002 representing 14% and 9% of license revenue respectively. During the nine months ended September 30, 2003 and 2002, cost of license fees increased to $40.2 million from $33.1 million, representing 11% and 9% of license revenue in each of those nine month periods. The increase in the cost of license fees for the three months ended September 30, 2003 is primarily a result of amortization of capitalized software related to the J.D. Edwards acquisition in the amount of $8.7 million, and $2.8 million due to the inclusion of J.D. Edwards subsequent to July 2003, partially offset by a $1.1 million decrease in royalties due to a change in the mix of royalty bearing license contracts. The increase in the cost of license fees for the nine months ended September 30, 2003 is primarily a result of amortization of capitalized software related to the J.D. Edwards acquisition in the amount of $8.7 million, $2.8 due to the inclusion of J.D. Edwards subsequent to its acquisition in July 2003, and $2.3 million of amortization of capitalized software primarily from the Momentum acquisition, partially offset by a $4.0 million decrease in royalties due to a change in the mix of royalty bearing license contracts.

     Cost of services consists primarily of employee costs and the related infrastructure costs incurred in providing consulting services, post-installation support and training. Cost of services increased to $230.2 million in the third quarter of 2003 from $159.4 million in the third quarter of 2002, representing 50% and 46% of service revenues in each of those quarters. The inclusion of J.D. Edwards since its acquisition in July 2003 accounted for $61.1 million of the increase in cost of services. The remaining increase is primarily due to amortization of intangibles of $10.9 million related to maintenance agreements and related relationships and consulting contracts acquired from J.D. Edwards. For the nine months ended September 30, 2003 cost of services increased to $560.4 million from $495.1 million during the nine months ended September 30, 2002, representing 46% and 47% of service revenues, respectively. The increase in cost of services for the nine months ended September 30, 2003 is primarily due to the inclusion of $61.1 million relating to J.D. Edwards subsequent to July 2003 and amortization of intangibles related to maintenance agreements and consulting contracts acquired from J.D. Edwards of $10.9 million.

     Sales and marketing expenses increased to $168.6 million in the third quarter of 2003 from $127.6 million in the third quarter of 2002, representing 27% of total revenues in each of those quarters. The increase in sales and marketing expenses for the quarter is primarily due to the inclusion of J.D. Edwards subsequent to its acquisition in July 2003 in the amount of $48.6 million and amortization of intangibles for customer contracts and related relationships related to the acquisition of $2.8 million, and $2.6 million in increased marketing costs associated with our response to the Oracle Offer, partially offset by a $2.6 million decrease in salaries due to decreased headcount from the restructuring that occurred during the second quarter of 2003, and a $2.1 million decrease in facilities expense and information systems expense. Sales and marketing expenses increased to $419.6 million for the nine months ended September 30, 2003 from $378.4 million for the nine months ended September 30, 2002, representing 26% of total revenues in each of the nine month periods. The increase in sales and marketing expenses for the nine months is primarily due to the inclusion of J.D. Edwards subsequent to its acquisition in July 2003 in the amount of $48.6 million and amortization of intangibles related to the acquisition of $2.8 million, as well as $4.9 million in increased marketing costs associated with our response to the Oracle Offer, partially offset by a $6.5 million decrease in salaries and benefits due to decreased headcount from the second quarter 2003 restructuring, a $4.5 million decrease in commissions due to decreased software license sales, and a $3.5 million decrease in rent expense and information systems expense.

     Product development expenses consist of costs related primarily to our software development and the associated infrastructure costs required to fund product development initiatives. Product development expenses increased to $127.7 million in the third quarter of 2003 from $83.0 million in the third quarter of 2002, representing 20% and 18% of total revenues in each of those quarters. The

⁽¹⁾ Forward-Looking Statement

20

increase in product development expenses is primarily attributable to the inclusion of J.D. Edwards subsequent to its acquisition in July 2003 in the amount of $32.2 million as well as a $5.4 million increase in employee bonuses, $4.0 million increase in salaries expense due to increased headcount in 2003, and a $2.2 million increase in amortization of patent intangibles related to the acquisition. Product development expenses increased to $296.1 million during the nine months ended September 30, 2003 from $252.9 million for the nine months ended September 30, 2002, representing 19% and 18% of total revenues, respectively. The increase in product development expenses is primarily attributable to the inclusion of J.D. Edwards subsequent to its acquisition in July 2003 in the amount of $32.2 million, and amortization of patent intangibles related to the J.D. Edwards acquisition of $2.2 million, a $5.9 million increase in development activities as developers were redeployed from working on Momentum projects in the prior year, and a $4.8 million increase in salaries and benefits expense due to increased headcount in 2003. Our focus is to continue to extend our software offerings by delivering enhanced functionality and to further develop new applications in our integrated application suites: Human Capital Management, Financial Management Solutions, Customer Relationship Management and Supply Chain Management.⁽¹⁾

     General and administrative expenses increased to $61.9 million during the third quarter of 2003 from $27.2 million during the third quarter of 2002, representing 10% and 6% of total revenues, respectively. The increase is primarily attributable to the inclusion of J.D. Edwards general and administrative expenses in the amount of $15.8 million subsequent to the acquisition in July 2003 as well as $12.4 million in investment banking, legal and other expenses incurred in the third quarter of 2003 related to our response to the Oracle Offer and $3.2 million in integration fees, paid to third parties, related to the J.D. Edwards acquisition. General and administrative expenses increased to $135.9 million from $84.9 million for the nine months ended September 30, 2003, representing 9% and 6% of total revenues, respectively. The increase for the nine month period is primarily attributable to $23.6 million in expenses incurred in the second and third quarter of 2003 related to our response to the Oracle Offer, the inclusion of J.D. Edwards general and administrative expenses in the amount of $15.8 million subsequent to the acquisition in July 2003, a $4.6 million increase in salaries and benefits primarily relating to the redeployment of internal personnel, and $3.2 million in integration fees paid to third parties relating to the J.D. Edwards acquisition.

Restructuring, Acquisition and Other Charges

     During the third quarter of 2003, we recorded restructuring and acquisition charges totaling $23.3 million that relate to the J.D. Edwards acquisition which are included in “Restructuring acquisition and other charges”. This consisted of $8.8 million in restructuring charges and a$14.5 million IPR&D write-off (see “Business Combinations” below). Restructuring charges consisted $5.6 million for employee severance, $2.2 million for acquisition related employee retention, and $1.0 million for contract terminations. During the second quarter of 2003, we recorded pretax restructuring charges of $13.8 million, which consisted of $4.6 million for employee severance, $7.5 million for the fair value of lease obligations associated with the closure of an office facility and $1.7 million for the impairment of related leasehold improvements. Approximately $19.6 million of the above restructuring charges are cash charges, which are expected to be funded through operating cash flow. During the nine months ended September 30, 2002, we incurred a first quarter charge of $2.8 million related to the write-off of in-process research and development costs associated with our acquisition of Annuncio and a second quarter charge of $8.7 million related to the write-off of in-process research and development costs related to the acquisition of Momentum.

     Restructuring, acquisition and other charges recorded in the third quarter of 2003 are based on our restructuring plans that have been committed to by management. The Company expects to record additional “Restructuring, acquisition and other” charges of approximately $4 to $6 million for employee related costs and facility obligations during the fourth quarter of 2003.⁽¹⁾ Any changes to the estimates of executing the restructuring plans will be reflected in our future results of operations as appropriate.⁽¹⁾

Other Income, Net

     Other income, net, which primarily includes interest income, increased to $7.6 million in the third quarter of 2003 from $5.6 million in the third quarter of 2002, and decreased to $19.2 million in the nine months ended September 30, 2003 from $21.3 million during the nine months ended September 30, 2002. The increase for the third quarter of 2003 is primarily the result of the inclusion of $1.6 million of other income and expense acquired in the J.D. Edwards acquisition. The decrease for the nine month period ended September 30, 2003, is primarily due to a $1.6 million decrease in investment income due to decrease in yields from prior year and the impairment of certain investments, $4.7 million in foreign currency exchange losses primarily due to the weakening of various Latin American currencies in the prior year and the $1.4 million loss on the buyout of interest rate swaps in the second quarter of 2003, partially offset by the inclusion of $1.6 million of other income and expense related to the J.D. Edwards acquisition, proceeds from the

⁽¹⁾ Forward-Looking Statement

21

sale of an investment in marketable securities in the amount of $1.8 million and the exclusion of $1.8 million of interest expense on convertible bonds which matured in the third quarter of 2002.

Provision for Income Taxes

     Our income tax provision decreased to $4.2 million in the third quarter of 2003 from $23.5 million in the third quarter of 2002 and decreased to $42.9 million in the nine months ended September 30, 2003 from $70.3 million for the same period in 2002. Our effective tax rate was 38.4% and 36.0% for the nine months ended September 30, 2003 and 2002, respectively. Exclusive of restructuring charges in the second quarter of 2003 and restructuring charges and in-process research and development charges in the third quarter of 2003 and in-process research and development charges in the first and second quarters of 2002, the effective tax rates for the nine months ended September 30, 2003 and 2002 were 34.6% and 34.5%, respectively. The net deferred tax assets at September 30, 2003 were $79.5 million. In accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”, the valuation of these net deferred tax assets is based upon an estimate of both the timing and amount of future taxable income. Future taxable income may be derived from future operations, subsequent reversals of deferred tax liabilities and other sources.⁽¹⁾

Business Combinations

     Pursuant to an Amended and Restated Agreement and Plan of Merger with J.D. Edwards dated June 16, 2003, the Company acquired approximately 85% of the outstanding stock of J.D. Edwards on July 18, 2003 pursuant to an exchange offer and the remaining shares on August 29, 2003 pursuant to a merger. J.D. Edwards results have been included in the Company’s results since July 18, 2003, and minority interest in net income has been recorded from July 18, 2003 through August 29, 2003.

     J.D. Edwards offers enterprise software as well as consulting, education and support services. The Company’s board of directors approved the offer and the merger and determined that the offer and the merger would provide the Company with increased breadth and depth across the Company’s products, market segments and industry coverage. The Company’s board determined that J.D. Edwards’ expertise in manufacturing and distribution applications would strengthen the Company’s enterprise application suite. In addition, the board determined that J.D. Edwards mid-market focused applications and AS/400 based solutions would be additive to the Company’s Internet-based enterprise application suite.

     In the exchange offer, holders of J.D. Edwards common stock were entitled to make an election to tender their shares for cash or shares of PeopleSoft stock and such holders were entitled to receive cash, stock, or a combination of cash and stock, in each case having a value, on a per share basis of $7.05 plus 0.43 of a share of the Company’s common stock, allocated by prorating cash and shares available in the exchange offer among the elections made by the holders. At the completion of the acquisition, a total of 124,108,566 shares of J.D. Edwards common stock were tendered and accepted for exchange by PeopleSoft.

     The Company exchanged options held by J.D. Edwards employees with PeopleSoft options at a rate of 0.43 PeopleSoft options per J.D. Edwards option. Each exchanged PeopleSoft option retained the same vesting characteristics as the J.D. Edwards option it replaced and each J.D. Edwards option holder will receive $7.05 per option upon exercise.

     The aggregate purchase price was approximately $2 billion, which consisted of approximately $875 million in cash, $962 million in PeopleSoft common stock and options, $88.5 million in restructuring costs (see footnote 6) and $27.5 million in deal costs and other incurred liabilities, which primarily consist of fees paid for legal, accounting and financial advisory services. A total of 53,312,015 PeopleSoft shares were issued in the transaction. The value of the stock issued to J.D. Edwards shareholders was based upon the average of closing prices of one share of the Company’s common stock during the five trading days ending June 18, 2003, which was $17.22. The fair value of the Company’s stock-based awards to employees was estimated using a Black-Scholes option pricing model. The fair value of the stock-based awards to employees was estimated assuming no expected dividends and the following weighted-average assumptions:

Expected life (in years)	1.90
Expected volatility	0.7468
Risk free interest rate	1.86	%

⁽¹⁾ Forward-Looking Statement

22

The intrinsic value allocated to the unvested J.D. Edwards options assumed in the exchange was approximately $6.7 million and has been recorded as deferred compensation in the purchase price allocation. Option holders having options with strike prices of $7.05 (J.D. Edwards pre-merger price) or less were given 0.43 shares of the Company’s common stock plus $7.05 less the exercise price and any applicable taxes, in order to retire these options. Approximately 5.0 million of the approximately 8.4 million options issued are fully vested.

     As a result of the acquisition of J.D. Edwards, the Company recorded approximately $88.5 million of restructuring costs in connection with exiting certain pre-acquisition activities of J.D. Edwards including severance costs, change in control payments, costs of vacating duplicate facilities, contract termination costs, and other costs. Change in control payments are made to employees covered by a plan maintained by J.D. Edwards and subsequently assumed by PeopleSoft upon the completion of the merger. That change in control plan provides for specified severance and other change in control-related benefits to participants in the plan. The plan covered 197 senior management employees. Terminated individuals who will receive severance and change in control payments are primarily general and administrative, consulting, and sales and marketing employees. And accordingly, these costs have been recognized as a liability assumed in the purchase business combination. Future cash payments related to the restructuring reserves for employee costs are expected to be made through July 2004. Future cash contract termination payments are expected to be made through August 2007. Future cash payments related to the restructuring reserves for facilities obligations are expected to be made through January 2008.

     In accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations,” the Company allocated the purchase price to the tangible assets, deferred compensation, liabilities and intangible assets acquired, as well as in-process research and development, based on their estimated fair values. The excess purchase price over the fair values was recorded as goodwill. The fair value assigned to intangible assets acquired was based on estimates and assumptions determined by management. The assignment of goodwill to the Company’s reportable segments for this acquisition has not yet been completed. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” goodwill and purchased intangibles with indefinite lives acquired after June 30, 2001 are not amortized but will be reviewed periodically for impairment. Purchased intangibles with finite lives are amortized on a straight-line basis over their respective useful lives. The total purchase price has initially been allocated as follows (in thousands):

Current assets		$	545,984
Property and equipment			75,349
Capitalized software			226,300
Goodwill			940,707
Intangible assets and other			535,497
Acquired IPR&D			14,500
Deferred compensation			6,766
	Total assets acquired and deferred compensation		2,345,103
Current liabilities			(187,729	)
Short-term deferred revenue			(69,953	)
Long term deferred revenues and other			(5,142	)
Long term deferred income taxes			(129,289	)
Total Purchase Price		$	1,952,990

     The purchase price allocation is preliminary and a final determination of required purchase accounting adjustments will be made upon the completion of a final analysis of the total purchase cost primarily related to estimating involuntary termination and facility related costs.

     In performing this preliminary purchase price allocation, the Company considered, among other factors, its intention for future use of the acquired assets, analyses of historical financial performance and estimates of future performance of J.D. Edwards’ products. The fair value of intangible assets was primarily based on the income approach. The royalty savings approach and the cost approach were also utilized when appropriate. The rates utilized to discount the net cash flows to their present values were based upon the Company’s weighted average cost of capital and range from 12% to 14%. These discount rates were determined after consideration of the Company’s rate of return on debt capital and equity, the weighted average return on invested capital and the risk associated with achieving forecasted sales related to the technology and assets acquired from J.D. Edwards. At September 30, 2003, identifiable intangible assets purchased in the J. D. Edwards acquisition consist of the following (in thousands, except for useful life):

	Gross		Accumulated
Identifiable Intangible Assets	Value		Amortization		Useful Life
Capitalized software	$	226,300	$	8,742	5 years
Patented technology		60,300		2,246	5 years
Customer contracts and related relationships		105,600		2,839	7 years
Maintenance agreements and related relationships		305,500		6,554	8.7 years
Consulting contracts		5,800		4,321	3 months
Balance September 30, 2003	$	703,500	$	24,702		—

23

	For the Year
Estimated Amortization Expense	Ended
For the year ended 12/31/03	$	53,145
For the year ended 12/31/04		107,677
For the year ended 12/31/05		107,677
For the year ended 12/31/06		107,677
For the year ended 12/31/07 and thereafter		327,324
	$	703,500

     In-process research and development (“IPR&D”) of $14.5 million was expensed as “Restructuring, acquisition and other charges” in the accompanying condensed consolidated statements of operations because the purchased research and development had no alternative uses and had not reached technological feasibility. Four in-process research and development projects were identified relating to the JDE 5 product line. Two of the projects relate to enterprise resource planning software and have a value of approximately $8.9 million. The third project relates to customer relationship management software and has a value of approximately $3.2 million. The fourth project relates to technology designed to enhance the functionality of enterprise resource planning software and has a value of approximately $2.4 million. The value assigned to IPR&D was determined utilizing the income approach by segregating cash flow projections related to in process projects. The stage of completion of each in process project was estimated to determine the discount rate to be applied to the valuation of the in process technology. Based upon the level of completion and the risk associated with in process technology, a discount rate of 25% was deemed appropriate for valuing IPR&D.

Oracle’s Unsolicited Tender Offer for PeopleSoft’s Common Stock

     On June 6, 2003, Oracle announced that it intended to commence an unsolicited cash tender offer to purchase all of the outstanding shares of PeopleSoft for $16.00 per share, or approximately $5.1 billion in the aggregate (the “Oracle Offer”). The tender offer was formally commenced June 9, 2003, and on June 18, 2003 Oracle amended the offer to increase the purchase price $16.00 to $19.50 per share.

     As more fully described in the Company’s amended Schedule 14D-9, filed with the Securities and Exchange Commission (“SEC”), the Board of Directors of the Company has determined that the Oracle Offer is not in the best interests of the stockholders and unanimously recommended that the stockholders reject the Oracle Offer and not tender their shares to Oracle for purchase. The expiration of the Oracle Offer is currently December 31, 2003.

     See Note 10, “Commitments and Contingencies” to the Consolidated Financial Statements for information about litigation instituted by the Company and others related to the Oracle Offer.

Critical Accounting Policies and Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires us to utilize accounting policies and make estimates and assumptions that affect our reported results. We believe our accounting policies and estimates related to revenue recognition, business combinations, capitalized software, allowance for doubtful accounts, product and service warranty reserve and deferred tax asset valuation allowances represent our critical accounting policies and estimates. Despite the Company’s best effort to make good faith estimates and assumptions, actual results may differ.

Revenue Recognition

     We recognize revenue in accordance with the Securities and Exchange Commission’s Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements,” the American Institute of Certified Public Accountants Statement of Position (SOP) 97-2, “Software Revenue Recognition,” as amended by SOP 98-9, “Modification of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions,” and other authoritative accounting literature. We derive revenues from the following sources: license fee revenue, maintenance revenue and professional services revenue.

     License Fee Revenue. For software license agreements that do not require significant modifications or customization of the software, we recognize software license revenue when persuasive evidence of an agreement exists, delivery of the product has occurred, the license fee is fixed or determinable and collection is probable. Our software license agreements generally include multiple products and services, or “elements.” Consulting services, if included as an element of software license agreements, generally

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do not involve significant modification or customization of the licensed software. We use the residual method to recognize revenue when a license agreement includes one or more elements to be delivered at a future date and vendor specific evidence of the fair value of all undelivered elements exists. The fair value of the undelivered elements is determined based on the historical evidence of stand-alone sales of these elements to third parties. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. If evidence of the fair value of one or more undelivered elements does not exist, the total revenue is deferred and recognized when delivery of those elements occurs or when fair value can be established. If the license fee due from the customer is not fixed or determinable, revenue is recognized as payment becomes due, assuming all other revenue recognition criteria have been met. We consider arrangements with extended payment terms not to be fixed or determinable. Revenue associated with reseller arrangements is recognized when we receive persuasive evidence that the reseller has sold the products to an end user customer. Acceptance provisions included in a software license agreement generally grant customers a right of refund or replacement only if the licensed software does not perform in accordance with its published specifications. Based on our history, the likelihood of non-acceptance in these situations is remote, and we recognize revenue when all other criteria of revenue recognition are met. If the likelihood of non-acceptance is determined to be other than remote, revenue is recognized upon the earlier of receipt of written acceptance or when the acceptance period has lapsed.

     In response to Oracle’s public statements about its intent to discontinue the Company’s products, and to minimize a potential loss of business during the Oracle Offer, the Company implemented a customer assurance program. This program incorporates a contingent change in control provision to its standard perpetual licensing arrangement. That provision provides customers purchasing application licenses with financial protection in the event that an acquirer discontinues or reduces (or with respect to certain contracts, announces the intention to discontinue or reduce) the licensing, development or support of PeopleSoft applications within a specified period after an acquisition, as defined in the program terms. That financial protection is in the form of a payment generally equal to two to five times the total arrangement fees. The multiple increases as the arrangement fees increase and will be generally paid provided the following events occur:

• either within one year or two years from the contract effective date, the Company is acquired or merged, and the Company is not the acquirer, and

• either within two or four years from the contract effective date, the acquiring company announces a) its intention to discontinue, or discontinues support services before the end of the normal support term as defined by the Company’s standard policies, or b) announces its intention to discontinue licensing PeopleSoft products to new customers, or c) announces its intention not to, or does not, provide updates or new releases for supportable products for a specified period; and

• the customer requests the payment in writing by a specified date and the customer has timely paid for support services in accordance with the terms of the customer’s agreement with the Company.

     The terms available under certain contracts also included additional payment triggers after an acquisition, including:

a) a reduction or the announced intention to reduce the amount of money spent to develop updates for the supportable modules or provide support services below the level spent by the Company in the 12 months preceding the acquisition, or

b) a reduction or the announced intention to reduce or limit the ability of the supportable modules to integrate or operate with third party products such as databases, software, products, and technologies.

     Customers retain rights to the licensed products whether or not the customer assurance program’s payments are triggered. No customer is entitled to a refund of arrangement fees paid under the customer’s contract with the Company, but the customer would be entitled to a payment under the customer assurance program if all of the conditions stated above are met.

     The customer assurance program has no financial statement impact on PeopleSoft. A contingent liability would only be recognized in the financial statements of the Company or its acquirer upon or after the consummation of a business combination provided all the events listed above occurred. As of September 30, 2003, the maximum potential amount of future payments which may be required to be made under the customer assurance program was approximately $807 million.

     The customer assurance program has expired. The Company is currently considering whether and on what terms it will extend the customer assurance program.

     Maintenance Revenue. Maintenance revenue is recognized ratably over the term of the maintenance agreement, typically one year.

     Professional Services Revenue. Professional services revenue primarily consists of consulting and customer training revenues, which are usually charged on a time and materials basis and are recognized as the services are performed. Revenue from certain fixed price contracts is recognized on a percentage of completion basis, which involves the use of estimates. If we do not have a sufficient basis to measure the progress towards completion, revenue is recognized when the project is completed or when we receive final acceptance from the customer.

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Business Combinations

     We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired, liabilities assumed, as well as IPR&D based on their estimated fair values. We engage independent third-party appraisal firms to assist us in determining the fair values of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates and assumptions, especially with respect to intangible assets.

     Critical estimates in valuing certain of the intangible assets include but are not limited to: future expected cash flows from license sales, maintenance agreements, consulting contracts, customer contracts, and acquired developed technologies and patents; expected costs to develop the IPR&D into commercially viable products and estimating cash flows from the projects when completed; the acquired company’s brand awareness and market position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio; and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur.

     Other estimates associated with the accounting for these acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. In particular, restructuring liabilities that have resulted from the J.D. Edwards purchase are subject to change as management completes its assessment of the pre-merger operations and begins to execute the approved plan.

Capitalized Software

     We account for the development cost of software intended for sale in accordance with Statement of Financial Accounting Standards No. 86, “Accounting for Costs of Computer Software to be Sold, Leased, or Otherwise Marketed” (SFAS 86). SFAS 86 requires product development costs to be charged to expense as incurred until technological feasibility is attained. Technological feasibility is attained when our software has completed internal testing and has been determined viable for its intended use. The time between the attainment of technological feasibility and completion of software development has been short with immaterial amounts of development costs incurred during this period. Accordingly, we did not capitalize any significant development costs in the nine month periods ended September 30, 2003 and 2002. We capitalize software acquired through technology purchases and business combinations if the related software under development has reached technological feasibility or if there are alternative future uses for the software. We evaluate the recoverability of capitalized software based on estimated future gross revenues reduced by the estimated cost of completing the products and of performing maintenance and customer support. If our gross revenues were to be significantly less than our estimates, the net realizable value of our capitalized software intended for sale would be impaired.

Allowance for Doubtful Accounts

     We maintain an allowance for doubtful accounts at an amount we estimate to be sufficient to provide adequate protection against losses resulting from collecting less than full payment on our receivables. We record an allowance for receivables based on a percentage of revenues. Individual overdue accounts are reviewed, and an additional allowance is recorded when determined necessary to state receivables at realizable value. In judging the adequacy of the allowance for doubtful accounts, we consider multiple factors including historical bad debt experience, the general economic environment, and the aging of our receivables. A considerable amount of judgment is required when we assess the realization of receivables, including assessing the probability of collection and the current creditworthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional provision for doubtful accounts may be required.

Product and Service Warranty Reserve

     We provide for the estimated cost of product and service warranties based on specific warranty claims, provided that it is probable that a liability exists, and provided the amount can be reasonably estimated. Warranty expense is equal to the costs to repair or otherwise satisfy the claim. As settlement negotiations proceed, additional information becomes available which may result in changes in the estimated liability. If claims are settled for amounts differing from our estimates, or if the estimated value of warranty claims were to increase or decrease, revisions to the estimated warranty liability may be required and the warranty expense may change from current levels.

Deferred Tax Asset Valuation Allowance

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     We account for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” We assess the likelihood that our net deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we establish a valuation allowance against those deferred tax assets. We consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. However, adjustments could be required in the future if we determine that the amount to be realized is greater or less than the amount we have recorded. We have established valuation allowances for net operating losses incurred in foreign jurisdictions and other foreign tax benefits as well as on operating loss carry-forwards in state jurisdictions of acquired companies.

Liquidity and Capital Resources

     At September 30, 2003, we had $595.3 million in cash and cash equivalents and $972.0 million in short-term investments, consisting principally of investments in interest-bearing demand deposit accounts with various financial institutions, tax-advantaged money market funds and highly liquid debt securities of corporations and municipalities. At September 30, 2003, working capital was $950 million. We believe that the combination of cash and cash equivalents, short-term investment balances and potential cash flow from operations will be sufficient, at least through the next twelve months, to satisfy our cash requirements.(1)

     Cash provided by operating activities increased $73.7 million to $311.9 million during the nine months ended September 30, 2003 from $238.2 million during the same period in 2002. The increase was primarily due to an increase associated with fluctuations in the deferred revenue and accounts receivable balances and an increase in depreciation and amortization relating to the J.D. Edwards acquisition, partially offset by lower net income and a decrease in the fluctuation of income taxes primarily resulting from changes in temporary differences for the nine months ended September 30, 2003 compared to the same period in 2002.

     Cash used in investing activities decreased $274.2 million to $131.4 million during the nine months ended September 30, 2003 from $405.6 million during the same period in 2002. The decrease was primarily attributable to an increase in net sales of investments of $832.4 million, partially offset by the acquisition of J.D. Edwards for $519.9 million and greater purchases of property and equipment, largely relating to exercising options under synthetic lease agreements for $175.0 million in 2003 to purchase certain of our headquarters facilities in Pleasanton, California.

     Cash provided by financing activities increased $37.8 million to $77.4 million during the nine months ended September 30, 2003 from $39.6 million during the nine months ended September 30, 2002. The increase was primarily due to the retirement of convertible debt in 2002 for $57.0 million, partially offset by a decrease in proceeds received from the exercise of common stock options by employees of $18.2 million.

     On October 27, 2003, the Company implemented a stock repurchase program in which up to $350 million of its common stock, par value $0.01 per share, is eligible to be repurchased by the Company from time to time in the open market or through privately negotiated purchases or otherwise, depending on market prices and other conditions. The Company’s board of directors believes that the proposed share repurchases are consistent with its goal of utilizing available cash for the benefit of its stockholders, in that the reduction in the number of shares outstanding following the share repurchase will increase the relative percentage ownership of the Company by those stockholders who retain their shares, and the reduction in the number of outstanding shares is expected to be accretive to earnings per share. The Company intends to hold all shares repurchased by it pursuant to the share repurchase program as treasury stock. The Company intends to fund all share repurchases from cash surplus and general corporate funds generated from its operations. As of November 10, 2003 the Company had repurchased 12 million shares of its common stock for approximately $253.4 million.

     As part of our business strategy, we may acquire companies or products from time to time to enhance our product and service lines. These acquisitions may be paid for with available cash, equity, debt or a combination of these sources.(1)

Commercial Commitments

     On February 27, 2003, we exercised our option under a synthetic lease agreement to purchase certain of our headquarters facilities located in Pleasanton, California for $70.0 million and on June 30, 2003, we exercised our option under a synthetic lease agreement to purchase certain of our headquarters facilities located in Pleasanton, California for $105.0 million, prior to the agreement’s maturity date in September 2003.

     The Company acquired four office buildings in Denver, Colorado (the “Denver Campus”) as a result of the acquisition of J.D. Edwards (see Note 8 to Condensed Financial Statements). The Denver Campus was constructed on land originally owned by J.D.

⁽¹⁾ Forward-Looking Statement

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Edwards and is leased under operating leases, which commenced in 1997 and 1998. The Company has six-year master lease agreements with a lessor, a wholly owned subsidiary of a bank, which together with a syndicate of other banks provided financing of $121.2 million for the purchase and construction costs of the buildings through a combination of debt and equity. The lease payment obligations are based on a return on the lessor’s costs. The Company also has an option to refinance or purchase the leased properties at its sole discretion during the term of the lease for approximately $121.2 million, the amount expended by the lessor and syndicate of banks for purchase and construction costs. In the event that the Company does not exercise its option to refinance or purchase the leased properties, it must guarantee the residual value of each building up to approximately 85% of its original cost. The Company does not believe that it will be called upon to perform under the residual guarantee to satisfy any financial obligations under the leases. The Company has evaluated the fair value of the Denver Campus and determined that at this point it is not probable that the value of the property at the end of the lease term will be less than the residual value guaranteed by the Company. The leases terminate between April and November of 2004. The Company is currently considering alternatives that include a refinancing of the existing arrangement or a cash purchase.⁽¹⁾

Recently Issued Accounting Standards

     In June 2001, FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations”, which addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and associated retirement costs. SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The adoption of SFAS No. 143 did not have a material effect on the Company’s results of operations or financial condition.

     In November 2002, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107, and rescission of FASB Interpretation No. 34” (FIN 45). The Interpretation requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken by issuing the guarantee. The Interpretation also requires additional disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees it has issued. The accounting requirements for the initial recognition of guarantees are applicable on a prospective basis for guarantees issued or modified after December 31, 2002. The disclosure requirements are effective during the first quarter of fiscal 2003 for all guarantees outstanding, regardless of when they were issued or modified. The adoption of FIN 45 did not have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

     In December 2002, the FASB issued Statement of Financial Accounting Standards, “Accounting for Stock Based Compensation Transition and Disclosure–an Amendment of SFAS No. 123,” or SFAS 148, which amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The transition and annual disclosure provisions of SFAS 148 are effective for fiscal years ending after December 15, 2002. In addition, SFAS No. 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The interim disclosure provisions are effective for the first interim period beginning after December 15, 2002 and have been included in these consolidated financial statements.

     In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities’’ (FIN 46) that addresses the consolidation of variable interest entities. The interpretation provides guidance for determining when a primary beneficiary should consolidate a variable interest entity, or equivalent structure, that functions to support the activities of the primary beneficiary. The interpretation is effective after January 31, 2003 for newly created variable interest entities. For variable interest entities created before February 1, 2003, the interpretation is effective for the period ending after December 15, 2003. On June 30, 2003, the Company exercised its option to purchase certain of its headquarters facilities located in Pleasanton, California for $105.0 million, prior to the maturity of the related synthetic lease. Had the Company not terminated this synthetic lease prior to July 1, 2003, it would have been required to consolidate its financial position and results of operations under the provisions of FIN 46. However, given the termination of the lease, the provisions of FIN 46 did not apply. The lessor of the Denver Campus does not meet the definition of a variable interest entity for our consolidated financial reporting. Accordingly, the Company has accounted for these leases as operating leases.

     In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (SFAS 150) that establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150 is effective for financial

⁽¹⁾ Forward-Looking Statement

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instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this statement had no effect on the Company’s consolidated financial position, results of operations or cash flows.

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ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Risk

     Our international business is subject to risks, including, but not limited to, unique economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Accordingly, our future results could be materially adversely impacted by changes in these or other factors.

     International sales are made mostly from our foreign subsidiaries in their respective countries and are typically denominated in the local currency of each country. Our foreign subsidiaries incur most of their expenses in local currency as well.

     Our exposure to foreign exchange rate fluctuations primarily arises from intercompany transactions. We are also exposed to foreign exchange rate fluctuations as the financial results of our foreign subsidiaries are translated into U.S. dollars during consolidation. As exchange rates vary, these results, when translated, may vary from expectations and may adversely impact overall expected profitability.

     We have a foreign exchange hedging program principally designed to mitigate the future potential impact due to changes in foreign currency exchange rates. Forward exchange contracts are primarily used to hedge foreign currency exposures of the Company as well as the U.S. dollar denominated exposures of our foreign subsidiaries. We operate in certain countries in Latin America and Asia Pacific where there are limited forward currency exchange markets, and thus we also have unhedged exposures in these countries. In general, our forward foreign exchange contracts have terms of two months or less, which approximate the expected settlement date of the underlying exposure. Gains and losses on the settled contracts are included in “Other income, net” and are recognized in the current period, consistent with the period in which the gain or loss of the underlying transaction is recognized.

     At September 30, 2003, the Company had the following outstanding forward foreign exchange contracts to exchange foreign currency for U.S. dollars (in millions):

			Notional Weighted
	Notional		Average Exchange
Foreign Currency	Amount		Rate per US $
British pound	$	13.6		1.62332
Singapore dollars		6.1		1.73027
New Zealand dollars		3.1		1.70608
Australian dollars		1.6		0.66469
Hong Kong dollars		1.0		7.78533
Taiwanese dollars		0.9		33.78800
Danish krone		0.8		6.46700
Swiss francs		0.5		1.35730
Swedish krona		0.4		8.05352
	$	28.0

     At September 30, 2003, the Company had the following outstanding forward foreign exchange contracts to exchange U.S. dollars for foreign currency (in millions):

			Notional Weighted
	Notional		Average Exchange
Foreign Currency	Amount		Rate per US $
Euros	$	20.0		0.88089
Mexican peso		10.1		10.60286
Canadian dollars		6.4		1.36726
Japanese yen		3.8		117.28634
South African rand		0.9		7.42697
	$	41.2

     At September 30, 2003, each of these contracts matured within 60 days and had a book value that approximated fair value. Neither the cost nor the fair value of these forward foreign exchange contracts was material at September 30, 2003. During the nine months ended September 30, 2003, we recorded net foreign currency transaction losses of $1.8 million.

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Interest Rate Risk

Investments In Debt Securities

     We invest in a variety of securities, consisting principally of investments in interest-bearing demand deposit accounts with financial institutions, tax-exempt money market funds and highly liquid debt securities of corporations and municipalities. Cash balances in foreign currencies overseas represent operating balances that are typically invested in short term time deposits in local operating banks.

     We classify debt securities based on maturity dates on the date of purchase and reevaluate the classification as of each balance sheet date. As of September 30, 2003 and December 31, 2002, all our investments were classified as available-for-sale, which are carried at fair value. Fair value is determined based on quoted market prices, with net unrealized gains and losses included in “Accumulated other comprehensive income” net of tax, in the accompanying condensed consolidated balance sheets.

     Investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities, which typically have a shorter duration, may produce less income than expected if interest rates fall. Due in part to these factors, our investment income may decrease in the future due to changes in interest rates.

     At September 30, 2003, the average maturity of our investment securities was less than three months and all investment securities had maturities of less than eighteen months. At September 30, 2003, we invested heavily in tax-exempt investments, which reduced our weighted average interest rate.

     Below is a schedule that shows the maturity profile of our investment securities held at September 30, 2003 and the related weighted average interest rates. The weighted average rates include both taxable and tax-exempt investments (in millions, except weighted average interest rates):

	Expected Maturity
							Total
	1 Year or			More than 1			Principal		Total
	less			year			Amount		Fair Value
Available-for-sale investments	$	969.4		$	44.9		$	1,014.3	$	1,016.5
Weighted average interest rate		1.07	%		1.23	%

Interest Rate Swap Transactions

     The Company used interest rate swap transactions to manage its exposure to interest rate changes on its synthetic lease obligations related to certain of its headquarters facilities located in Pleasanton, California. The swaps had an aggregate notional principal amount of $175.0 million and matured at various dates in 2003, consistent with the expiration of the synthetic leases. Under the swap agreements, the Company received a variable interest rate based on the three month LIBOR rate and paid a weighted average fixed interest rate of 6.8%. The swaps were designated under SFAS 133 as hedges against changes in the amount of future cash flows. In February 2003, the Company exercised its option under a synthetic lease agreement to purchase certain of its headquarters facilities located in Pleasanton, California for $70.0 million, and concurrently swaps with an aggregate notional principal amount of $70.0 million matured. On June 30, 2003 the Company exercised its option under a synthetic lease agreement to purchase certain of its headquarters facilities located in Pleasanton, California for $105.0 million. As a result of this transaction, the Company terminated its remaining interest rate swap agreements with an aggregate notional principal amount of $105.0 million resulting in a pretax charge of $1.4 million to “Other income, net.” Included in “Accumulated other comprehensive income” at March 31, 2003 was a $1.8 million unrealized loss (after-tax) related to these interest rate swaps. In the second quarter of 2003, $0.9 million (after-tax) was reclassified into earnings by making scheduled swap payments and $0.9 million (after-tax) was recognized as a realized loss that was reclassified into earnings upon the termination of the remaining interest rate swap agreements.

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ITEM 4 – CONTROLS AND PROCEDURES

     As of the end of the third quarter ended September 30, 2003, the Company carried out an evaluation, under the supervision and with the participation of members of our management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934. Based upon that evaluation, the Company’s Chief Executive Officer and the Company’s Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective in alerting them in a timely manner to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.

     During the most recent fiscal quarter, there has not occurred any change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

     The Company inherited J.D. Edwards’ internal controls over financial reporting upon the closing of the merger with J.D. Edwards. The Company evaluated the J.D. Edwards’ internal controls over financial reporting and concluded that PeopleSoft’s existing internal controls over financial reporting are sufficient and no material changes were required to be made to PeopleSoft’s internal controls as a result of the merger.

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FACTORS THAT MAY AFFECT OUR FUTURE RESULTS OR THE MARKET PRICE OF OUR STOCK

     We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. The following section describes some, but not all, of these risks and uncertainties that may adversely affect our business, financial condition or results of operations. This section should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the accompanying Notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and Notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2002 Annual Report on Form 10-K.

We may not successfully complete the integration of our and J.D. Edwards’ business operations into the Company. In addition, we may not achieve the anticipated benefits of the merger, which could adversely affect the price of our common stock.

     We entered into the merger agreement with J.D. Edwards, and completed the merger on August 29, 2003, with the expectation that the acquisition would result in benefits to the combined company. However, these expected benefits may not be fully realized. The integration of both companies is in progress. The remaining integration work related to PeopleSoft’s and J.D. Edwards’ operations may be difficult, time consuming and costly, particularly in light of the technical and complex nature of each company’s products. The combined company must successfully complete its integration of, among other things, certain product and service offerings, product development, sales and marketing, administrative and customer service functions, and management information systems. In addition, we must retain the key management, key employees, customers, distributors, vendors and other business partners of both companies in order to achieve certain desired synergies. It is possible that these integration efforts will not be completed as efficiently as planned or will distract management from the operations of the combined company’s business.

     The challenges remaining in this integration include the following:

• managing software development activities to define a combined product roadmap, ensure timely release of innovative products to market, successfully provide key integration applications between J.D. Edwards and the Company’s products, coordinating software development operations in an efficient manner to ensure timely development of product roadmaps, and release of future products to market;

• demonstrating to our existing and potential customers that the business combination will not result in adverse changes in customer service standards or business focus;

• obtaining any remaining required consents of suppliers, distributors, system integrators, customers, licensors, facility owners and other business partners in connection with the merger;

• retaining key alliances on attractive terms with partners and suppliers;

• coordinating and integrating sales and marketing efforts to effectively communicate the capabilities of the combined company, cross selling products to each other’s customers, and successfully managing the combined sales force;

• managing an increased number of employees over large geographic distances;

• creating and effectively implementing uniform standards, controls, procedures, policies and information systems; and

• retaining or recruiting key personnel.

     The execution of these post-merger activities will involve considerable risks and may not be successful. These risks include:

• the failure to realize the anticipated synergies from our combination with J.D. Edwards;

• the potential disruption of the combined company’s ongoing business and distraction of its management;

• potential delays related to integration of the operations, technology and other components of the two companies;

• the impairment of relationships with suppliers, customers and business partners as a result of any integration of new

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	management personnel;
•	the inability to successfully manage the substantially larger and geographically diverse organization;
•	greater than anticipated costs and expenses related to restructuring, including employee severance or relocation costs and costs related to vacating leased facilities; and
•	potential unknown liabilities associated with J.D. Edwards, the merger and the combined operations of the two companies.

     The combined company may not successfully complete the integration of the operations of PeopleSoft and J.D. Edwards in a timely manner, or at all, and the combined company may not realize the anticipated benefits of the merger to the extent, or in the timeframe, anticipated, which could significantly harm our business and have a material adverse effect on the combined company.

Charges to earnings resulting from the acquisition of J.D. Edwards including the application of the purchase method of accounting, and restructuring and integration costs may materially adversely affect the market value of our common stock.

     In accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the combined company has accounted for the acquisition using the purchase method of accounting. Accordingly, the combined company has allocated the total estimated purchase price to J.D. Edwards’ net tangible assets, amortizable intangible assets, and in-process research and development based on their fair values as of the date of completion of the merger, and recorded the excess of the purchase price over those fair values as goodwill. The combined company’s financial results, including earnings per share, could continue to be adversely affected by a number of purchase accounting adjustments required by U.S. GAAP including the following:

• The combined company will incur additional amortization expense over the remainder of the estimated useful lives of certain of the intangible assets acquired in connection with the merger.

• The value of goodwill may become impaired and the combined company may be required to incur material charges relating to the impairment of those assets.

• Deferred revenues on J.D. Edwards’ balance sheet at the closing of the merger, which predominately represents maintenance revenue, has been reduced to fair value in the post acquisition balance sheet. The impact of this fair value reduction will reduce the amount of deferred maintenance revenue available to be recognized into earnings as a result of the J.D. Edwards acquisition for the remaining term of the related maintenance contracts.

• The Company will incur charges to income to eliminate certain PeopleSoft pre-acquisition activities that are duplicative in nature to assumed J.D. Edwards activities or to reduce cost structure.

     Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur, which may adversely affect future financial results.

     We expect to continue to incur additional costs associated with combining the operations of the two companies, which may be substantial. Additional costs that may be incurred relate to employee redeployment or relocation, accelerated amortization of deferred equity compensation and severance payments upon terminating former J.D. Edwards management personnel, employee retention which could include salary increases or bonuses, reorganization or closure of facilities, relocation and disposition of excess equipment, termination of contracts with third parties that provide redundant or conflicting services and other integration costs. We expect to account for these costs either as purchase related adjustments or as expenses that will decrease our net income for the periods in which those adjustments are made.

     These costs may negatively impact earnings, which could have a material adverse effect on the price of our common stock.

     Our stock price may remain volatile.

     The trading price of our common stock has fluctuated significantly in the past. Changes in our business, operations or prospects, ongoing market assessments of the benefits of the merger, regulatory considerations, general market and economic conditions, or other factors may affect the price of our common stock. Many of these factors are beyond our control. The future trading price of our common stock is likely to be volatile and could be subject to wide price fluctuations in response to such factors, including:

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• the impact of the pending unsolicited Oracle Offer (see below) or any other proposed acquisition of us;

• actual or anticipated fluctuations in revenues or operating results, including revenue or results of operations in any quarter failing to meet the expectations, published or otherwise, of the investment community;

• announcements of technological innovations by us or our competitors;

• introduction and success of new products or significant customer wins or losses by us or our competitors;

• developments with respect to our intellectual property rights, including patents, or those of our competitors;

• changes in recommendations or financial estimates by securities analysts;

• fluctuations in demand for and sales of our products, which will depend on, among other things, the uncertainty regarding success of the merger and operations of the combined company, our customer assurance programCheck to see if this is a new disclosure. If so, we may need to delete it. If old, keep., the acceptance of our products in the marketplace and the general level of spending in the software industry;

• rumors or dissemination of false and/or misleading information, particularly through internet chat rooms, instant messaging and other means;

• changes in management;

• proposed and completed acquisitions or other significant transactions by us or our competitors;

• the mix of products and services sold by us;

• the timing of significant orders received by us;

• conditions and trends in the software industry, or consolidation within the technology industry that may impact our customers, partners, suppliers or competitors;

• adoption of new accounting standards, including those affecting the software industry;

• acts of war or terrorism; and

• general market conditions.

Oracle Corporation’s tender offer to purchase all of our outstanding common stock is disruptive to our business and threatens to adversely affect the Company’s operations and results.

     On June 6, 2003, Oracle announced that it intended to commence a cash tender offer, referred to as the Oracle Offer, to purchase all of our outstanding common stock. Oracle has extended the offering period several times. The Oracle Offer currently expires December 31, 2003. We believe that the Oracle Offer raises significant antitrust concerns that have resulted in a lengthy regulatory review process and could result in protracted litigation. On June 30, 2003, the Department of Justice requested additional information regarding antitrust matters relating to Oracle’s proposed acquisition of PeopleSoft. The delay and uncertainty associated with the continued regulatory review and the uncertainty regarding the outcome of the Oracle Offer could have a material adverse effect on our financial condition and operating results.

     Oracle’s initially stated intentions that were interpreted to reflect its intent to discontinue the development, sale and support of PeopleSoft products if the Oracle Offer is successful have adversely impacted and may continue to adversely impact our ability to attract new customers and have caused and could continue to cause potential or current customers to defer purchases or to cancel existing orders. Oracle’s later statements that it would continue to sell and support PeopleSoft products for some time have resulted in additional confusion for our customers. Moreover, as a result of the Oracle Offer, certain of our suppliers, distributors, and other business partners may seek to change or terminate their relationships with us. These actions may adversely affect our financial condition and results of operations.

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     Additionally, as a consequence of the uncertainty surrounding the Company’s future, our key employees may seek other employment opportunities. Moreover, the Company’s ability to attract and retain new key management, sales, marketing and technical personnel could be harmed. If key employees leave as a result of the Oracle Offer, or the Company is unable to attract or retain qualified personnel, there could be a material adverse effect on the business and the results of operations for PeopleSoft.

     Responding to the Oracle Offer has been, and may continue to be, a major distraction for management of PeopleSoft and require the Company to incur significant costs. Management distraction created by the Oracle Offer may also adversely impact our ability to successfully complete the integration of J.D. Edwards with PeopleSoft. This distraction could adversely affect our business and results of operations.

Litigation related to the J.D. Edwards merger and the Oracle Offer may result in significant monetary damages or may otherwise negatively impact the business and operation of PeopleSoft.

     At least fifteen stockholder lawsuits have been filed in Delaware and California state courts against PeopleSoft and certain of our directors and officers alleging breaches of fiduciary duties in connection with the Oracle Offer. The California stockholder lawsuits have been stayed and a motion for preliminary injunction has been filed in one of the Delaware stockholder suits. A purported class action stockholder lawsuit has also been filed against J.D. Edwards’ former directors and officers in Delaware state court alleging breaches of fiduciary duty. On June 18, 2003, Oracle filed a lawsuit against PeopleSoft, the members of our board and J.D. Edwards in the Delaware Chancery Court. The lawsuit alleges breaches of fiduciary duties against us and our board and seeks to enjoin us from continuing to use a recently announced customer assurance program. In addition, other potential lawsuits arising out of the Oracle Offer or the merger could seek rescission of the merger, as well as monetary damages. Fluctuation in the price of PeopleSoft common stock may also expose the Company to the risk of securities class-action lawsuits. Any conclusion of such litigation in a manner adverse to PeopleSoft could have a material adverse effect on the combined company’s businesses, financial condition and results of operations. In addition, the cost of defending this litigation, even if resolved favorably, will be substantial. Such litigation could also substantially divert the attention of management and resources in general. Furthermore, uncertainties resulting from the initiation and continuation of any litigation could harm the ability of the combined company to compete in the marketplace. For a more detailed description of the litigation related to the merger and the Oracle Offer, see the discussions under Item 1. Note 10 “Commitments and Contingencies” and Part II - Item 1. “Legal Proceedings”.

We have adopted anti-takeover defenses that could make it difficult for another company to acquire control of PeopleSoft or limit the price investors might be willing to pay for our stock.

     Certain provisions of our Certificate of Incorporation and Bylaws could delay the removal of incumbent directors and could make a merger, tender offer or proxy contest involving us more difficult. These provisions include adoption of a Preferred Shares Rights Agreement (“Rights Agreement”), commonly known as a “poison pill” and giving our board the ability to issue preferred stock and determine the rights and designations of the preferred stock at any time without stockholder approval. The rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding voting stock. In addition, the staggered terms of our board of directors could have the effect of delaying or deferring a change in control. One of the conditions of the Oracle Offer is the removal or amendment of our Rights Agreement. To date, our board of directors has not agreed to such removal or amendment. We are currently involved in litigation with Oracle and purported stockholders of the Company in which the plaintiffs seek to redeem the Rights issuable under the Rights Agreement or to render the Rights Agreement inapplicable to the proposed acquisition of PeopleSoft by Oracle. In addition, certain provisions of the Delaware General Corporation Law (DGCL), including Section 203 of the DGCL, may have the effect of delaying or preventing changes in the control or management of PeopleSoft. In its current litigation, Oracle also seeks to enjoin our board from taking any action to enforce Section 203 of the DGCL. We can give no assurances as to the ultimate outcome of such litigation.

     The above factors may have the effect of deterring hostile takeovers or otherwise delaying or preventing changes in the control or management of PeopleSoft, including transactions in which our stockholders might otherwise receive a premium over the fair market value of PeopleSoft’s common stock.

Our future revenue is dependent in part upon our installed customer base continuing to license additional products, renew maintenance agreements and purchase additional professional services.

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     Our installed customer base has traditionally generated additional new license, professional service and maintenance revenues. In future periods, customers may not necessarily license additional products or contract for additional services or maintenance. Maintenance is generally renewable annually at a customer’s option, and there are no mandatory payment obligations or obligations to license additional software. If our customers decide not to renew their maintenance agreements or license additional products or contract for additional services, or if they reduce the scope of the maintenance agreements, our revenues could decrease and our operating results could be adversely affected.

If we fail to introduce new or improved products and service offerings, our results of operations and the financial condition of the business could suffer.

     The market for our software products is intensely competitive and is characterized by rapid technological change, evolving industry standards, changes in customer requirements and frequent new product introductions and enhancements. The competitive environment demands that we constantly improve our existing products and create new products. Our future success may depend in part upon our ability to:

• improve our existing products and develop new ones to keep pace with technological developments, including developments related to the internet;

• successfully integrate third party products;

• enter new markets;

• satisfy customer requirements; and

• maintain market acceptance.

     If we are unable to meet these challenges, our results of operations and our financial condition may be adversely affected.

Market acceptance of new platforms and operating environments may require us to undergo the expense of developing and maintaining compatible product lines.

     Although our software products can be licensed for use with a variety of popular industry standard relational database management system platforms, there may be future or existing platforms that achieve popularity in the marketplace which may not be architecturally compatible with our software product design. Moreover, future or existing user interfaces that achieve popularity within the business application marketplace may or may not be architecturally compatible with our current software product design. Developing and maintaining consistent software product performance characteristics across all of these combinations could place a significant strain on our resources and software product release schedules which could adversely affect revenue and results of operations. To maintain software performance across accepted platforms and operating environments, or to achieve market acceptance of those that we support, or to adapt to popular new ones, our expenses may increase and our sales and revenues may be adversely affected.

Our margins may be reduced if we need to lower prices or offer other favorable terms to customers on our products and services to meet competitive pressures in our industry.

     We compete with a variety of software vendors in all of our major product lines, including vendors of enterprise application software, manufacturing software applications, CRM applications, human capital management software and financial management solutions software. Some of our competitors may have advantages over us due to their larger worldwide presence, longer operating and product development history, substantially greater technical and marketing resources, or exclusive intellectual property rights. At least one competitor has a larger installed base than we do.

     If competitors offer more favorable pricing, payment or other contractual terms, warranties, or functionality which we do not currently provide, we may need to lower prices or offer other favorable terms in order to successfully compete.

As our international business grows, we will become increasingly subject to currency risks and other costs and contingencies that could adversely affect our results.

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     We continue to invest in the expansion of our international operations. The global reach of our business could cause us to be subject to unexpected, uncontrollable and rapidly changing economic and political conditions that could adversely affect our results of operations. The following factors, among others, present risks that could have an adverse impact on our business:

• conducting business in currencies other than United States dollars subjects us to fluctuations in currency exchange rates and currency controls;

• increased cost and development time required to adapt our products to local markets;

• lack of experience in a particular geographic market;

• legal, regulatory, social, political, labor or economic uncertainties in a specific country or region, including loss or modification of exemptions for taxes and tariffs, increased withholding or other taxes on payments by subsidiaries, import and export license requirements, trade tariffs or restrictions, war, terrorism and civil unrest;

• higher operating costs due to local laws or regulation; and

• inability to hedge the currency risk in some transactions because of uncertainty or the inability to reasonably estimate our foreign exchange exposure.

Continued regional and/or global economic, political and market conditions may cause a decrease in demand for our software and related services which may negatively affect our revenue and operating results.

     Our revenue and profitability depend on the overall demand for our software, professional services and maintenance. Regional and global changes in the economy, governmental budget deficits and political instability in geographic areas have resulted in companies, government agencies and educational institutions reducing their spending for technology projects generally and delaying or reconsidering potential purchases of our products and related services. The uncertainty posed by the long-term effects of the war in the Middle East and other geopolitical issues may impact the purchasing decisions of current or potential customers. Future declines in demand for our products and/or services could adversely affect our revenues and operating results.

We may be required to undertake a costly redesign of our products if third party software development tools become an industry standard.

     Our software products include a suite of proprietary software development tools, known as PeopleTools®, which are fundamental to their effective use. While no industry standard exists for software development tools, several companies have focused on providing software development tools and each of them is attempting to establish its own as the accepted industry standard. If a software product were to emerge as a clearly established and widely accepted industry standard, we may not be able to adapt PeopleTools appropriately or rapidly enough to satisfy market demand. In addition, we could be forced to abandon or modify PeopleTools or to redesign our software products to accommodate the new industry standard. This would be expensive and time consuming and may adversely affect results of operations and the financial condition of the business. Our failure to drive or adapt to new and changing industry standards or third party interfaces could adversely affect sales of our products and services.

Increased complexity of our software may result in more difficult detection and correction of errors, delays in the introduction of new products and more costly performance and warranty claims.

     Our software programs, like all software programs generally, may contain a number of undetected errors despite internal and third party testing. Increased complexity of our software and more sophisticated expectations of customers may result in higher costs to correct such errors and delay the introduction of new products or enhancements in the marketplace.

     Product software errors could subject us to litigation and liability based on performance and/or warranty claims. Although our agreements contain provisions designed to limit our exposure to potential liability claims, these provisions could be invalidated by unfavorable judicial decisions or by federal, state, local or foreign laws or regulations. If a claim against us were to be successful, we might be required to incur significant expense and pay substantial damages. Even if we were to prevail, the accompanying publicity could adversely impact the demand for our products.

If we lose access to critical third party software or technology, our costs could increase and the introduction of new products

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and product enhancements could be delayed.

     We license software and technology from third parties, including some competitors, and incorporate it into our own software products, some of which is critical to the operation of our software. If any of the third party software vendors were to change product offerings, increase prices or terminate our licenses, we might need to seek alternative vendors and incur additional internal or external development costs to ensure continued performance of our products. Such alternatives may not be available on attractive terms, or may not be as widely accepted or as effective as the software provided by our existing vendors. If the cost of licensing or maintaining these third party software products or other technology significantly increases, our gross margin levels could significantly decrease. In addition, interruption in functionality of our products could adversely affect future sales of licenses and services.

Disruption of our relationships with third party systems integrators could adversely affect revenues and results of operations.

     We build and maintain strong working relationships with businesses that we believe play an important role in the successful marketing and deployment of our software application products. Our current and potential customers often rely on third party system integrators to develop, deploy and manage applications. We believe that our relationships with these companies enhance our marketing and sales efforts. However, if these system integrators are unable to recruit and adequately train a sufficient number of consulting personnel to support the successful implementation of our software products, we may lose customers. Moreover, our relationships with these companies are not exclusive, and they are free to start, or in some cases increase, the marketing of competitive business application software, or to otherwise discontinue their relationships with us. In addition, integrators who generate consulting fees from customers by providing implementation services may be less likely to recommend our software if our products are more difficult or costly to install than competitors’ similar product offerings. Disruption of our relationships with these companies could adversely affect revenues and results of operations.

We may be unable to achieve the benefits we anticipate from joint software development or marketing arrangements with our business partners.

     We enter into various development or joint business arrangements to develop new software products or extensions to our existing software products. We may distribute ourselves or jointly sell with our business partners an integrated software product and pay a royalty to the business partner based on end-user license fees under these joint business arrangements. While we intend to develop business applications that are integrated with our software products, these software products may in fact not be integrated or brought to market, or the market may reject the integrated enterprise solution. As a result, we may not achieve the revenues that we anticipated at the time we entered into the joint business arrangement.

Our future success depends on our ability to continue to retain and attract qualified employees.

     We believe that our future success depends upon our ability to continue to train, retain, effectively manage and attract highly skilled technical, managerial, sales and marketing personnel. If our efforts in these areas are not successful, our costs may increase, development and sales efforts may be hindered and our customer service may be degraded. Although we invest significant resources in recruiting and retaining employees, there is intense competition for personnel in the software industry. From time to time, we experience difficulties in locating enough highly qualified candidates in desired geographic locations, or with required industry-specific expertise.

The loss of key personnel could have an adverse effect on our operations and stock price.

     We believe that there are certain key employees within the organization, primarily in the senior management team, who are necessary for us to meet our objectives. Due to the competitive employment nature of the software industry, there is a risk that we will not be able to retain these key employees. The loss of one or more key employees could adversely affect our continued operations. In addition, uncertainty created by turnover of key employees could result in reduced confidence in our financial performance which could cause fluctuations in our stock price and result in further turnover of our employees.

If requirements relating to accounting treatment for employee stock options are changed, we may be forced to change our business practices or our earnings may be affected.

     We currently account for the issuance of stock options under APB Opinion No. 25, “Accounting for Stock Issued to Employees.” Certain proposals related to treating the grant of an employee stock option as an expense are currently under consideration by accounting standards organizations and governmental authorities. If such proposals are adopted, the Company’s earnings could be

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negatively impacted. As a result, we may decide to reduce the number of stock options granted to employees or to grant options to fewer employees. This could affect our ability to retain existing employees and attract qualified candidates, and increase the cash compensation we would have to pay to them.

Our quarterly revenues can be difficult to predict and may fluctuate substantially, which may adversely affect our net income.

     Our revenues and results of operations can be difficult to predict and may fluctuate substantially from quarter to quarter. Our operating expense decisions, capital commitments and hiring plans are based on projections of future revenues. If our actual revenues fall below expectations, our net income may be adversely affected. Factors that may affect the predictability of actual revenues include the following:

• the impact of the pending Oracle Offer or any other proposed acquisition of us;

• our sales cycle may vary as a result of the complexity of a customer’s overall business needs and may extend over one or more quarters;

• the complexity and size of license transactions can result in protracted negotiations;

• a significant number of our license agreements are typically completed within the last few weeks of the quarter and purchasing decisions may be delayed to future quarters;

• the effect of economic downturns and unstable political conditions may result in decreased product demand, price erosion, and other factors that may substantially reduce license and service revenue;

• customers may unexpectedly postpone or cancel anticipated system replacement or new system implementation due to changes in strategic priorities, project objectives, budgetary constraints, internal purchasing processes or company management;

• changes in our competitors’ and our own pricing policies and discount plans may affect customer purchasing patterns and decisions;

• the number, timing and significance of our competitors’ and our own software product enhancements and new software product announcements may affect purchasing decisions; and

• changes in customers’ seasonal purchasing patterns may result in imprecise quarterly revenue projections.

We may be required to defer recognition of license revenue for a significant period of time after entering into an agreement, which could negatively impact our results of operations.

     We may have to delay recognizing license related revenue for a significant period of time for a variety of types of transactions, including:

• transactions that include both currently deliverable software products and software products that are under development or contain other currently undeliverable elements;

• transactions where the customer demands services that include significant modifications, customizations or complex interfaces that could delay product delivery or acceptance;

• transactions that involve non-standard acceptance criteria or identified product-related performance issues; and

• transactions that include contingency-based payment terms or fees.

     These factors and other specific accounting requirements for software revenue recognition, require that we have very precise terms in our license agreements to allow us to recognize revenue when we initially deliver software or perform services. Although we have a standard form of license agreement that meets the criteria for current revenue recognition on delivered elements, we negotiate and revise these terms and conditions in some transactions. Sometimes we may license our software or provide service with terms and conditions that do not permit revenue recognition at the time of delivery or even as work on the project is completed.

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If accounting interpretations relating to revenue recognition change, our reported revenues could decline or we could be forced to make changes in our business practices.

     Over the past several years, the American Institute of Certified Public Accountants has issued Statement of Position (SOP) 97-2, “Software Revenue Recognition,’’ and SOP 98-9, “Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.” In addition, in December 1999, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 101 (SAB 101), “Revenue Recognition in Financial Statements,” which explains how the SEC staff believes existing revenue recognition rules should be applied to or interpreted for transactions not specifically addressed by existing rules. These standards address software revenue recognition matters primarily from a conceptual level and do not include specific implementation guidance. We believe that our revenue has been recognized in compliance with SOP 97-2, SOP 98-9 and SAB 101.

     The accounting profession and regulatory agencies continue to discuss various provisions of these pronouncements with the objective of providing additional guidance on their application. These discussions and the issuance of new interpretations, once finalized, could lead to unanticipated reductions in recognized revenue. They could also drive significant adjustments to our business practices which could result in increased administrative costs, lengthened sales cycles and other changes which could adversely affect our reported revenues and results of operations.

Increases in service revenue as a percentage of total revenues may decrease overall margins.

     We realize lower margins on services revenue than on license revenues. In addition, we may contract with certain third parties to supplement the services we provide to customers, which generally yields lower gross margins than our service business. As a result, if service revenue increases as a percentage of total revenue or if we increase our use of third parties to provide such services, our gross margins will be lower and our operating results may be impacted.

Our intellectual property and proprietary rights may offer only limited protection.

     We consider certain aspects of our internal operations and our software and documentation to be proprietary, and we primarily rely on a combination of patent, copyright, trademark and trade secret laws and other measures to protect our proprietary rights. Patent applications or issued patents, as well as trademark, copyright, and trade secret rights, may not provide significant protection or competitive advantage. We also rely on contractual restrictions in our agreements with customers, employees and others to protect our intellectual property rights. There can be no assurance that these agreements will not be breached, that we have adequate remedies for any breach, or that our patents, copyrights, trademarks or trade secrets will not otherwise become known. Moreover, the laws of some countries do not protect proprietary intellectual property rights as effectively as do the laws of the United States. Protecting and defending our intellectual property rights could be costly regardless of venue.

     Through an escrow arrangement, we have granted some of our customers a contingent future right to use our source code solely for internal maintenance services. If our source code is accessed through an escrow, the likelihood of misappropriation or other misuse of our intellectual property may increase.

Third parties may claim that our products infringe their intellectual property rights, which could result in material costs.

     Third parties may assert infringement claims against us more aggressively in the future, especially in light of recent developments in patent law expanding the scope of patents on software and business methods. These assertions, regardless of their validity, could result in costly and time-consuming litigation, including damage awards, or could require costly redesign of products or present the need to enter into royalty arrangements which would decrease margins and could adversely affect the results of operations. Any such litigation or redesign of products could also negatively impact customer confidence in our products and result in reduced licensing revenue.

Future acquisitions may present risks and we may be unable to achieve the product, financial or strategic goals intended at the time of any acquisition.

     As a component of our strategy, in addition to our acquisition of J.D. Edwards, we may acquire or invest in companies, products or technologies, and may enter into joint ventures and strategic alliances with other companies. The risks we commonly encounter in such transactions include:

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• difficulty assimilating the operations and personnel of the acquired company;

• difficulty effectively integrating the acquired technologies or products with our current products and technologies;

• difficulty in maintaining controls, procedures and policies during the transition and integration;

• ongoing business may be disrupted by transition and integration issues;

• key technical and managerial personnel from the acquired business may not be able to be retained;

• the financial and strategic goals for the acquired and combined businesses may not be achieved;

• relationships with partner companies or third party providers of technology or products could be adversely affected;

• relationships with employees and customers could be impaired;

• due diligence processes may fail to identify significant issues with product quality, product architecture, legal and financial contingencies, and product development, among other things; and

• significant exit charges may be sustained if products acquired in business combinations are unsuccessful.

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It may become increasingly expensive to obtain and maintain liability insurance at current levels.

     We contract for insurance to cover a variety of potential risks and liabilities. In the current market, insurance coverage is becoming more restrictive, and when insurance coverage is offered, the deductible for which we are responsible is larger. In light of these circumstances, it may become more difficult to maintain insurance coverage at historical levels, or if such coverage is available, the cost to obtain or maintain it may increase substantially. This may result in our being forced to bear the burden of an increased portion of risks for which we have traditionally been covered by insurance, which could negatively impact our results of operations.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

     PeopleSoft Stockholder Actions — Delaware Court of Chancery

     On June 6, 2003, Felix Ezeir (Case No. 20349-NC), Teresita Fay (Case No. 20350-NC), Robert Crescente (Case No. 20351-NC), Robert Corwin (Case No. 20352-NC) and Ernest Hack (Case No. 20353-NC), all of whom purport to be stockholders of the Company, each filed a putative stockholder class action suit in the Delaware Court of Chancery against the Company and several of its officers and directors. The suits allege that defendants breached their fiduciary duties in connection with the Company’s response to the tender offer purportedly announced by Oracle Corporation on June 6, 2003. Plaintiffs in each of the actions seek injunctive relief and an accounting. On June 10, 2003, an action was filed in the Delaware Court of Chancery against these same defendants by Steven Padness (Case No. 20358-NC), making similar allegations and seeking similar relief. On June 12, 2003, an action was filed in the Delaware Court of Chancery against these same defendants by Thomas Nemes (Case No. 20365-NC), making similar allegations and seeking similar relief (the “Nemes Action”). The Nemes Action was amended on June 18, 2003, to include allegations and seeking relief similar to those in the above-referenced actions.

     On June 25, 2003, on an application filed in the Nemes Action, the Court consolidated the actions listed above under a single caption and case number: In re PeopleSoft, Inc. Shareholder Litigation, Consol. C.A. No. 20365-NC. Defendants filed their Answer on June 25, 2003.

     Document discovery has commenced in these consolidated actions and is coordinated with the discovery in the action filed against the Company by Oracle, discussed below.

     On July 2, 2003, Richard Hutchings (Case No. 20403-NC) filed a putative stockholder class action suit in the Delaware Court of Chancery against the Company and several of its officers and directors. The suit alleges that defendants breached their fiduciary duties in connection with the Company’s response to Oracle’s tender offer purportedly announced on June 6, 2003. Plaintiff seeks injunctive relief, an accounting and damages. On July 22, 2003, the Court ordered that this action be consolidated with the other putative shareholder actions listed above.

     On June 27, 2003, Milton Pfeiffer (Case No. 20390-NC), who purports to be a stockholder of J.D. Edwards, filed a putative class action against J.D. Edwards and several of its officers and directors, alleging that defendants breached their fiduciary duties in connection with the amendment of the merger agreement between J.D. Edwards and the Company. Plaintiff seeks injunctive relief, an accounting and damages. Defendants moved to dismiss or stay the action on the grounds, inter alia, that Pfeiffer is not a proper plaintiff. In response, on July 24, 2003, Pfeiffer amended his complaint, adding as a plaintiff Ward Quarles, who also purports to be a stockholder of J.D. Edwards. On August 28, 2003, plaintiffs filed a Notice of Dismissal, dismissing Case No. 20390-NC.

     On November 6, 2003, plaintiffs in the Delaware Shareholder Litigation, filed a motion for preliminary injunction seeking to enjoin defendant PeopleSoft, and its directors, officers and employees from continuing the Company’s Customer Assurance Program. In their motion, plaintiffs assert that the terms of the revised Customer Assurance Program constitute a disproportionate and unreasonable response to any perceived threat from Oracle’s outstanding tender offer. Plaintiffs have moved for an order expediting consideration of their motion for a preliminary injunction.

     The Company believes that the claims and allegations asserted in each of the foregoing putative class action suits are without merit, and intends to vigorously defend against these lawsuits.

     Oracle v. PeopleSoft — Delaware Court of Chancery

     On June 18, 2003, Oracle filed a suit in the Delaware Court of Chancery (Case No. 20377-NC) against the Company, several of the Company’s directors (the “Director Defendants”), and J.D. Edwards, alleging that the Director Defendants breached their fiduciary duties in connection with the Company’s response to Oracle’s tender offer commenced on June 9 and amended June 18, 2003, and that J.D. Edwards aided and abetted such directors’ purported breach of fiduciary duty. Oracle seeks injunctive, declaratory and rescissory relief. On June 25, 2003, defendants filed their Answer. A hearing on a motion for preliminary injunction was scheduled for July 16, 2003, but was postponed upon the request of Oracle. On July 25, 2003, Oracle advised the Court that, in light of the second request for further information it received from the antitrust division of the United States Department of Justice regarding its tender offer, it did not believe it appropriate to set a hearing date at this time. Document discovery has commenced in this litigation.

     The Company believes that the claims and allegations asserted in this action are without merit, and intends vigorously to

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defend against this lawsuit.

On November 10, 2003, Oracle filed a motion for preliminary injunction, which is consolidated with the Delaware Shareholder Litigation in the Court of Chancery. In its motion for preliminary injunction, Oracle similarly seeks to enjoin the PeopleSoft defendants from continuing to offer to customers the terms contained in the revised Customer Assurance Program. On the same date, Oracle also filed motions seeking leave of Court to amend its Complaint and to expedite its motion for a preliminary injunction. The Court of Chancery has scheduled a hearing for November 19, 2003 to consider plaintiffs’ and Oracle’s motions to expedite consideration of their preliminary injunction applications.

PeopleSoft Stockholder Actions — California Superior Court for the County of Alameda

     On June 6, 2003, separate actions were filed in the California Superior Court for the County of Alameda by Doris Staehr (Case No. RG03100291), the West Virginia Laborers Pension Trust Fund (Case No. RG03100306), Lorrie McBride (Case No. RG03100300), and Ray Baldi (Case No. RG03100696) (collectively the “Initial Alameda Stockholder Actions”), all of whom purport to be stockholders of the Company, against several of the Company’s executive officers and directors. The suits allege that defendants breached their fiduciary duties in connection with (i) the Company’s response to Oracle’s tender offer announced on June 6, 2003, (ii) the Company’s agreement to acquire J.D. Edwards, and (iii) the implementation of the 2003 Directors Stock Plan, which was approved by Company stockholders at the 2003 Annual Meeting. Plaintiffs seek injunctive, rescissory and declaratory relief. On June 16, 2003, the Initial Alameda Stockholder Actions were consolidated. On June 11, 2003, two additional actions were filed by Moshe Panzer (Case No. RG03100876) and Arace Brothers (Case No. RG03100830) asserting similar claims. By Order dated July 10, 2003, the Panzer and Arace actions were consolidated with the Initial Alameda Stockholder Actions (collectively “the Alameda Stockholder Actions”).

     By Order dated June 18, 2003, the Alameda County Superior Court granted the Company’s Motion to Stay the Initial Alameda Stockholder Actions pending resolution of the claims involving the duties of the defendant directors by the Delaware Court of Chancery. By Order dated July 10, 2003, the Alameda County Superior Court also stayed the Panzer and Arace Brothers cases pursuant to the June 18, 2003 Order in the Initial Alameda Stockholder Actions. Accordingly, all of the Alameda Stockholder Actions are stayed by order of the Court.

     The Company believes that the claims and allegations asserted in each of the foregoing putative class action suits are without merit, and intends to vigorously defend against these lawsuits.

      J.D. Edwards v. Oracle — California Superior Court in the County of San Mateo

     On June 12, 2003, J.D. Edwards filed a suit in California Superior Court in the County of San Mateo against Oracle and two of its executives (Case No. CIV 431969) alleging violations of California’s Business and Professions Code Section 17200 et seq., intentional interference with prospective economic advantage and negligent interference with prospective economic advantage. The suit seeks compensatory damages and a preliminary and permanent injunction enjoining defendants from proceeding with Oracle’s proposed tender offer, taking or attempting to take any other steps to acquire control of the Company or J.D. Edwards, and otherwise interfering with the completion of the proposed merger acquisition of J.D. Edwards by the Company. Pursuant to the agreement of the parties and stipulated scheduling orders, discovery is being coordinated with discovery in the Delaware actions described above. On August 12, 2003, PeopleSoft announced that it intended to consolidate the J.D. Edwards actions with PeopleSoft’s suit against Oracle filed in Alameda County and that it intended to dismiss Case No. CIV 431969. On August 15, 2003, Case No. CIV 431969 was dismissed.

      J.D. Edwards v. Oracle — Colorado State Court

     On June 12, 2003, J.D. Edwards filed a suit in Colorado State Court against Oracle and its wholly-owned subsidiary, Pepper Acquisition Corp. (Case No. 03CV4270), alleging claims for tortious interference with contract and prospective business relations. The suit seeks, among other things, compensatory damages of $1.8 billion and an unspecified amount of punitive damages. Oracle has moved to dismiss this complaint, and a response from J.D. Edwards was due on August 18, 2003. Pursuant to the agreement of the parties and stipulated scheduling orders, discovery is being coordinated with discovery in the Delaware actions described above. On August 12, 2003, PeopleSoft announced that it intended to consolidate the J.D. Edwards’ actions with PeopleSoft’s suit against Oracle filed in Alameda County and that it intended to dismiss Case No. 03CV4270. On August 18, 2003, Case No. 03CV4270 was dismissed.

      PeopleSoft v. Oracle — California Superior Court for the County of Alameda

     On June 13, 2003, the Company filed a suit in the California Superior Court for the County of Alameda against Oracle and Pepper Acquisition Corp. (Case No. RG03101434). The Company alleges that, in connection with Oracle’s proposed tender offer, the defendants have engaged in: (i) false advertising and unfair trade practices in violation of California’s Business and Professions Code; (ii) acts of unlawful interference with the Company’s contracts with its customers; (iii) acts of unlawful interference with the Company’s relationships with its prospective customers; and (iv) acts of unlawful

45

disparagement of the Company’s products and services. The Company seeks an injunction precluding defendants’ unfair trade practices and other unlawful actions, and prohibiting the defendants from proceeding further with the tender offer. The Company also requests restitution and damages. On August 12, 2003, the Company filed an amended complaint, alleging extensive new facts about Oracle management’s ongoing acts of unfair trade practices, including its efforts to disrupt PeopleSoft’s customer relationships. The complaint contains new information concerning Oracle’s alleged deliberate campaign to mislead PeopleSoft customers about Oracle’s plans to support PeopleSoft products. The amended complaint consolidated the Company’s claims and those of J.D. Edwards against Oracle and Pepper Acquisition Corp. into a single lawsuit. The amended complaint continues to seek injunctive relief, restitution and damages. On September 11, 2003, Oracle demurred to the amended complaint, seeking to dismiss it, but was unsuccessful. Pursuant to a court order dated November 5, 2003, a second amended complaint is due to be filed on November 21, 2003. Discovery in this action is proceeding.

      Other Matters

     We are party to various legal disputes and proceedings arising during the ordinary course of business. In the opinion of management, resolution of these matters is not expected to have a material adverse effect on our financial position, results of operations and cash flows. An unfavorable resolution of some or all of these matters could materially affect our future results of operations or cash flows.

Item 2. Changes in Securities and Use of Proceeds

          (a)     On November 5, 2003, the Company’s bylaws were amended to change the period of notice required to be given by all stockholders who wish to nominate persons for election to the board of directors to not less than 120 days nor more than 180 days prior to the one year anniversary of the preceding annual meeting of stockholders.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8 - K

      (a) Exhibits

2.1	Amended and Restated Agreement and Plan of Merger and Reorganization, dated as of June 16, 2003, by and among PeopleSoft, Inc., J.D. Edwards & Company and Jersey Acquisition Corporation (incorporated by reference to Exhibit 2.1 filed with PeopleSoft, Inc.’s Registration Statement on Form S-4 (No. 333-106269) filed with the Securities and Exchange Commission on June 19, 2003).
3.1	Amendment No. 1 to the Bylaws of PeopleSoft, Inc., dated November 5, 2003 (incorporated by reference to Exhibit (e)(7) to PeopleSoft’s Schedule 14D-9/A filed on November 14, 2003)
3.2	Amended and Restated Bylaws of PeopleSoft, Inc. dated November 5, 2003.
10.1	Assignment and Assumption Agreement and Acknowledgement and Consent dated as of September 30, 2003, by and among J.D. Edwards & Company, LLC (“JDE LLC”), PeopleSoft, Inc. (“PeopleSoft”) and Selco Service Corporation (“Selco”).
10.2	Assignment and Assumption of Security Documents and Amendment to Memorandum of Lease (including Lease Supplement No. 1) (Phase I) dated as of September 30, 2003, by and among JDE LLC, PeopleSoft and Selco.

46

10.3	Assignment and Assumption of Security Documents, Amendment to Memorandum of Lease and Amendment to Memorandum of Ground Lease (Phases II/III) dated as of September 30, 2003, by and among JDE LLC, PeopleSoft and Selco.
10.4	Assignment and Assumption of Security Documents, Amendment to Memorandum of Lease (including Lease Supplement No. 1) and Amendment to Memorandum of Ground Lease (Phase IV) dated as of September 30, 2003, by and among JDE LLC, PeopleSoft and Selco.
10.5	Second Amendment to Definitions Appendix (Phase I) dated as of September 30, 2003, by and among Selco, PeopleSoft and KeyBank National Association (“KeyBank”).
10.6	Second Amendment to Definitions Appendix (Phase II/III) dated as of September 30, 2003, by and among Selco, PeopleSoft and KeyBank.
10.7	Second Amendment to Definitions Appendix (Phase IV) dated as of September 30, 2003, by and among Selco, PeopleSoft and KeyBank.
31.1	Certification by the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

47

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 13, 2003

PEOPLESOFT, INC.
By:	/s/ KEVIN T. PARKER
Kevin T. Parker Executive Vice President, Finance and Administration, Chief Financial Officer (Principal Financial and Accounting Officer)

48

INDEX TO EXHIBITS

Exhibit Number	Description
2.1	Amended and Restated Agreement and Plan of Merger and Reorganization, dated as of June 16, 2003, by and among PeopleSoft, Inc., J.D. Edwards & Company and Jersey Acquisition Corporation (incorporated by reference to Exhibit 2.1 filed with PeopleSoft, Inc.’s Registration Statement on Form S-4 (No. 333-106269) filed with the Securities and Exchange Commission on June 19, 2003)
3.1	Amendment No. 1 to the Bylaws of PeopleSoft, Inc., dated November 5, 2003 (incorporated by reference to Exhibit (e)(7) to PeopleSoft’s Schedule 14D-9/A filed on November 14, 2003)
3.2	Amended and Restated Bylaws of PeopleSoft, Inc. dated November 5, 2003.
10.1	Assignment and Assumption Agreement and Acknowledgement and Consent dated as of September 30, 2003, by and among J.D. Edwards & Company, LLC (“JDE LLC”), PeopleSoft, Inc. (“PeopleSoft”) and Selco Service Corporation (“Selco”)
10.2	Assignment and Assumption of Security Documents and Amendment to Memorandum of Lease (including Lease Supplement No. 1) (Phase I) dated as of September 30, 2003, by and among JDE LLC, PeopleSoft and Selco.
10.3	Assignment and Assumption of Security Documents, Amendment to Memorandum of Lease and Amendment to Memorandum of Ground Lease (Phases II/III) dated as of September 30, 2003, by and among JDE LLC, PeopleSoft and Selco.
10.4	Assignment and Assumption of Security Documents, Amendment to Memorandum of Lease (including Lease Supplement No. 1) and Amendment to Memorandum of Ground Lease (Phase IV) dated as of September 30, 2003, by and among JDE LLC, PeopleSoft and Selco.
10.5	Second Amendment to Definitions Appendix (Phase I) dated as of September 30, 2003, by and among Selco, PeopleSoft and KeyBank National Association (“KeyBank”)
10.6	Second Amendment to Definitions Appendix (Phase II/III) dated as of September 30, 2003, by and among Selco, PeopleSoft and KeyBank.
10.7	Second Amendment to Definitions Appendix (Phase IV) dated as of September 30, 2003, by and among Selco, PeopleSoft and KeyBank
31.1	Certification by the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

49 EX-3.2 3 f94551exv3w2.txt EXHIBIT 3.2 EXHIBIT 3.2 BYLAWS OF PEOPLESOFT, INC. ---------------- (As Amended and Restated as of November 5, 2003) -i- TABLE OF CONTENTS ARTICLE I.......................................................................... 1 CORPORATE OFFICES............................................................... 1 1.1 REGISTERED OFFICE................................................... 1 1.2 OTHER OFFICES....................................................... 1 ARTICLE II......................................................................... 1 MEETINGS OF STOCKHOLDERS........................................................ 1 2.1 PLACE OF MEETINGS................................................... 1 2.2 ANNUAL MEETING...................................................... 2 2.3 SPECIAL MEETING..................................................... 2 2.4 NOTICE OF STOCKHOLDERS' MEETINGS.................................... 2 2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE........................ 2 2.6 QUORUM.............................................................. 3 2.7 ADJOURNED MEETING; NOTICE........................................... 3 2.8 CONDUCT OF BUSINESS................................................. 3 2.9 VOTING.............................................................. 4 2.10 WAIVER OF NOTICE.................................................... 4 2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING............. 4 2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS......... 5 2.13 PROXIES............................................................. 5 2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE............................... 6 2.15 ADVANCE NOTICE OF STOCKHOLDER NOMINEES.............................. 6 2.16 ADVANCE NOTICE OF STOCKHOLDER BUSINESS.............................. 7 ARTICLE III........................................................................ 8 DIRECTORS....................................................................... 8 3.1 POWERS.............................................................. 8 3.2 NUMBER OF DIRECTORS................................................. 8 3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS............. 9 3.4 RESIGNATION AND VACANCIES........................................... 9 3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE............................ 10 3.6 REGULAR MEETINGS.................................................... 10 3.7 SPECIAL MEETINGS; NOTICE............................................ 10 3.8 QUORUM.............................................................. 11 3.9 WAIVER OF NOTICE.................................................... 11 3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING................... 11 3.11 FEES AND COMPENSATION OF DIRECTORS.................................. 12 3.12 REMOVAL OF DIRECTORS................................................ 12 ARTICLE IV......................................................................... 12 COMMITTEES...................................................................... 12 4.1 COMMITTEES OF DIRECTORS............................................. 12 4.2 COMMITTEE MINUTES................................................... 13 -ii- 4.3 MEETINGS AND ACTION OF COMMITTEES................................... 13 ARTICLE V.......................................................................... 14 OFFICERS........................................................................ 14 5.1 OFFICERS............................................................ 14 5.2 APPOINTMENT OF OFFICERS............................................. 14 5.3 SUBORDINATE OFFICERS................................................ 15 5.4 REMOVAL AND RESIGNATION OF OFFICERS................................. 15 5.5 VACANCIES IN OFFICES................................................ 15 5.6 CHAIRMAN OF THE BOARD............................................... 15 5.7 PRESIDENT........................................................... 16 5.8 VICE PRESIDENTS..................................................... 16 5.9 SECRETARY........................................................... 16 5.10 CHIEF FINANCIAL OFFICER............................................. 17 5.11 ASSISTANT SECRETARY................................................. 17 5.12 ASSISTANT TREASURER................................................. 17 5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS...................... 18 5.14 AUTHORITY AND DUTIES OF OFFICERS.................................... 18 ARTICLE VI......................................................................... 18 INDEMNITY....................................................................... 18 6.1 THIRD PARTY ACTIONS................................................. 18 6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION....................... 19 6.3 SUCCESSFUL DEFENSE.................................................. 19 6.4 DETERMINATION OF CONDUCT............................................ 19 6.5 PAYMENT OF EXPENSES IN ADVANCE...................................... 20 6.6 INDEMNITY NOT EXCLUSIVE............................................. 20 6.7 INSURANCE INDEMNIFICATION........................................... 20 6.8 THE CORPORATION..................................................... 20 6.9 EMPLOYEE BENEFIT PLANS.............................................. 21 6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES......... 21 ARTICLE VII........................................................................ 21 RECORDS AND REPORTS............................................................. 21 7.1 MAINTENANCE AND INSPECTION OF RECORDS............................... 21 7.2 INSPECTION BY DIRECTORS............................................. 22 7.3 ANNUAL STATEMENT TO STOCKHOLDERS.................................... 22 ARTICLE VIII....................................................................... 23 GENERAL MATTERS................................................................. 23 8.1 CHECKS.............................................................. 23 8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.................... 23 8.3 STOCK CERTIFICATES; PARTLY PAID SHARES.............................. 23 8.4 SPECIAL DESIGNATION ON CERTIFICATES................................. 24 8.5 LOST CERTIFICATES................................................... 24 -iii- 8.6 CONSTRUCTION; DEFINITIONS........................................... 24 8.7 DIVIDENDS........................................................... 25 8.8 FISCAL YEAR......................................................... 25 8.9 SEAL................................................................ 25 8.10 TRANSFER OF STOCK................................................... 25 8.11 STOCK TRANSFER AGREEMENTS........................................... 25 8.12 REGISTERED STOCKHOLDERS............................................. 26 ARTICLE IX......................................................................... 26 AMENDMENTS...................................................................... 26 -iv- BYLAWS OF PEOPLESOFT, INC. (As Amended and Restated as of November 5, 2003) ARTICLE I CORPORATE OFFICES 1.1 REGISTERED OFFICE The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent of the corporation at such location is The Corporation Trust Company. 1.2 OTHER OFFICES The board of directors may at any time establish other offices at any place or places where the corporation is qualified to do business. ARTICLE II MEETINGS OF STOCKHOLDERS 2.1 PLACE OF MEETINGS Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the board of directors. In the absence of any such designation, stockholders' meetings shall be held at the registered office of the corporation. The board of directors may, in its sole discretion, determine that any such meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a)(2) of the General Corporation Law of Delaware. If authorized by the board of directors in its sole discretion, and subject to such guidelines and procedures as the board of directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication (a) participate in a meeting of stockholders, -1- and (b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation. 2.2 ANNUAL MEETING The annual meeting of stockholders shall be held each year on a date and at a time designated by the board of directors. At the meeting, directors shall be elected and any other proper business may be transacted. 2.3 SPECIAL MEETING A special meeting of the stockholders may be called at any time by the board of directors, or by the chairman of the board, or by the president. No other person or persons are permitted to call a special meeting. No business may be conducted at a special meeting other than the business brought before the meeting by the board of directors or the chairman of the board or the president. 2.4 NOTICE OF STOCKHOLDERS' MEETINGS All notices of meetings with stockholders shall be in writing and shall be sent or otherwise given in accordance with these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, the date and hour of the meeting, the means of remote communication, if any, by which the stockholders or proxyholders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. 2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE Written notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder's post office or street address as it appears on the records of the corporation, and if transmitted by electronic means, is given when such electronic transmission is transmitted to the stockholder at such stockholder's electronic mail address as it appears on the records of the corporation. An affidavit of the secretary -2- or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Notice shall be deemed to have been given to all stockholders of record who share a post office or street or electronic mail address if notice is given in accordance with the "householding" rules set forth in Rule 14a-3(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act"). 2.6 QUORUM The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chairman of the meeting or (ii) the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. 2.7 ADJOURNED MEETING; NOTICE When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting in the manner set forth in Section 2.5. 2.8 CONDUCT OF BUSINESS The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business. The board of directors of the corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the board of directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures for the proper conduct of the meeting, including, without limitation: establishing an agenda or order of business for -3- the meeting; rules and procedures for maintaining order at the meeting and the safety of those present; limitations on participation in such meeting to stockholders of record and others as the chairman shall permit; restrictions on entry to the meeting after the time fixed for the commencement thereof; limitations on the time allotted to questions or comments by participants; and regulation of the opening and closing of the polls for balloting and matters which are to be voted on by ballot. Unless and to the extent determined by the board of directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. 2.9 VOTING The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.12 of these bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements). Except as may be otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder. 2.10 WAIVER OF NOTICE Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws. 2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING Unless otherwise provided in the certificate of incorporation, any action required by this chapter to be taken at any annual or special meeting of stockholders of a corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. -4- Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. If the action which is consented to is such as would have required the filing of a certificate under any section of the General Corporation Law of Delaware if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware. 2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If the board of directors does not so fix a record date: (i) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. (ii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. 2.13 PROXIES Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by a written proxy, signed by the stockholder and filed with the secretary of the corporation, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy shall be deemed signed if the stockholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder's attorney-in-fact. The revocability of a proxy that -5- states on its face that it is irrevocable shall be governed by the provisions of Section 212(c) of the General Corporation Law of Delaware. 2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE The officer who has charge of the stock ledger of a corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the post office or street address, or electronic mail address if applicable, of each stockholder and the number of shares registered in the name of each stockholder. Nothing contained in this Section shall require the corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, the list shall be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. 2.15 ADVANCE NOTICE OF STOCKHOLDER NOMINEES Nominations of persons for election to the board of directors of the corporation may be made at a meeting of stockholders by or at the discretion of the board of directors or by any stockholder of the corporation entitled to vote in the election of directors at the meeting who complies with the notice procedures set forth in this Section. Such nominations, other than those made by or at the direction of the board of directors, shall be made pursuant to timely notice in writing to the secretary of the corporation. To be timely, a stockholder's notice with respect to an annual meeting of stockholders shall be delivered to or mailed and received at the principal executive offices of the corporation: - not less than one hundred twenty (120) days nor more than one hundred eighty (180) days prior to the anniversary of the preceding annual meeting of stockholders; -6- - in the event the date of the meeting is more than thirty (30) days prior to or after such anniversary, notice by the stockholder shall be timely if so received not later than the close of business on the twentieth (20th) day following the day on which the date of the meeting is first publicly disclosed, if such twentieth day is less than one hundred twenty (120) days prior to the date of the meeting. - With respect to the election of directors at any special meeting of stockholders, to be timely a stockholder's notice shall be so received not less than one hundred twenty (120) days nor more than one hundred eighty (180) days prior to the date of the meeting; provided that in the event the date of the meeting is first publicly disclosed less than one hundred forty (140) days prior to the date of the meeting, notice by the stockholder shall be timely if so received not less than the close of business on the twentieth (20th) day following the day on which the date of the meeting is first publicly disclosed. Such stockholder's notice shall set forth (a) as to each person, if any, whom the stockholder proposes to nominate for election or re-election as a director: (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the corporation which are beneficially owned by such person, (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder, (v) any other information relating to such person that is required by law to be disclosed in solicitations of proxies for elections of directors, and (vi) such person's written consent to being named a nominee and to serving as a director if elected; and (b) as to the stockholder giving the notice: (i) the name and address, as they appear on the corporation's books, of such stockholder, and (ii) the class and number of shares of the corporation which are beneficially owned by such stockholder. At the request of the board of directors any person nominated by the board for election as a director shall confirm in writing to the secretary of the corporation the information set forth in the stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this Section. The chairman of the meeting shall, if the facts warrant, determine and declare at the meeting that a nomination was not made in accordance with the procedures prescribed by these bylaws, and if he should so determine, he shall so declare at the meeting and the defective nomination shall be disregarded. 2.16 ADVANCE NOTICE OF STOCKHOLDER BUSINESS At the annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be: (a) as specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (b) otherwise properly brought before the meeting by or at the direction of the board of directors, or (c) otherwise properly brought before the meeting by a stockholder. Business to be brought before the meeting by a stockholder shall not be considered -7- properly brought if the stockholder has not given timely notice thereof in writing to the secretary of the corporation. To be timely, a stockholder's notice must be delivered to the principal executive offices of the corporation not less than forty-five (45) days prior to the date on which the corporation first mailed proxy materials for the prior year's annual meeting; provided, however, that if the corporation's annual meeting of stockholders occurs on a date more than thirty (30) days earlier or later than the corporation's prior year's annual meeting, then the corporation's board of directors shall determine a date a reasonable period prior to the corporation's annual meeting of stockholders by which date the stockholder's notice must be delivered and publicize such date in a filing pursuant to the Securities Exchange Act of 1934, as amended, or via press release. Such publication shall occur at least ten (10) days prior to the date set by the board of directors. A stockholder's notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address of the stockholder proposing such business, (iii) the class and number of shares of the corporation, which are beneficially owned by the stockholder, (iv) any material interest of the stockholder in such business, and (v) any other information that is required by law to be provided by the stockholder in his capacity as proponent of a stockholder proposal. Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section. The chairman of the annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section, and, if he should so determine, he shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted. ARTICLE III DIRECTORS 3.1 POWERS Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. 3.2 NUMBER OF DIRECTORS The Board of Directors shall consist of eight (8) persons until changed by a proper amendment of this Section 3.2. -8- No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires. 3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS Except as provided in Section 3.4 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting unless specified otherwise in the certificate of incorporation. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Elections of directors need not be by written ballot. 3.4 RESIGNATION AND VACANCIES Any director may resign at any time upon notice given in writing or by electronic transmission to the secretary of the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies. Unless otherwise provided in the certificate of incorporation or these bylaws: (i) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. (ii) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree -9- summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware. If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten (10) percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable. 3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE The board of directors of the corporation may hold meetings, both regular and special, either within or outside the State of Delaware. Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. 3.6 REGULAR MEETINGS Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board. 3.7 SPECIAL MEETINGS; NOTICE Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board, the president, any vice president, the secretary or any two (2) directors. Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, or by electronic transmission, addressed to each director at that director's post office or street address, or electronic mail address if applicable, as it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. If the notice is delivered personally or by telephone, by telegram, or by electronic transmission, it shall be delivered personally or by telephone or to the telegraph company or by -10- electronic transmission at least forty-eight (48) hours before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose or the place of the meeting, if the meeting is to be held at the principal executive office of the corporation. 3.8 QUORUM At all meetings of the board of directors, a majority of the authorized number of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting. 3.9 WAIVER OF NOTICE Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws. 3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the board or committee. Such filing shall be in paper form if the minutes are maintained in paper form or shall be in electronic form if the -11- minutes are maintained in electronic form. 3.11 FEES AND COMPENSATION OF DIRECTORS Unless otherwise restricted by the certificate of incorporation or these bylaws, the board of directors shall have the authority to fix the compensation of directors. 3.12 REMOVAL OF DIRECTORS Unless otherwise restricted by statute, by the certificate of incorporation or by these bylaws, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors; provided, however, that, so long as stockholders of the corporation are entitled to cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect such director if then cumulatively voted at an election of the entire board of directors. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. ARTICLE IV COMMITTEES 4.1 COMMITTEES OF DIRECTORS The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, with each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors or in the bylaws of the corporation, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) amend the certificate of incorporation (except that a committee may, to the extent authorized in the resolution or -12- resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) of the General Corporation Law of Delaware, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), (ii) adopt an agreement of merger or consolidation under Sections 251 or 252 of the General Corporation Law of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, (iv) recommend to the stockholders a dissolution of the corporation or a revocation of a dissolution, or (v) amend the bylaws of the corporation; and, unless the board resolution establishing the committee, the bylaws or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of Delaware. 4.2 COMMITTEE MINUTES Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. 4.3 MEETINGS AND ACTION OF COMMITTEES Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Section 3.5 (Place of Meetings; Meetings by Telephone), Section 3.6 (Regular Meetings), Section 3.7 (Special Meetings; Notice), Section 3.8 (Quorum), Section 3.9 (Waiver of Notice), and Section 3.10 (Board Action by Written Consent Without a Meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members; provided, however, that the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committee, that special meetings of committees may also be called by resolution of the board of directors and that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The board of directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws. -13- ARTICLE V OFFICERS 5.1 OFFICERS The officers of the corporation shall be a president, a secretary and a chief financial officer. The corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more vice presidents, one or more assistant vice presidents, one or more assistant secretaries, one or more assistant treasurers and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws. Any number of offices may be held by the same person. 5.2 APPOINTMENT OF OFFICERS The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 or 5.5 of these bylaws, shall be appointed by the board of directors, subject to the rights, if any, of an officer under any contract of employment. -14- 5.3 SUBORDINATE OFFICERS The board of directors may appoint, or empower the president to appoint, such other officers and agents as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the board of directors may from time to time determine. 5.4 REMOVAL AND RESIGNATION OF OFFICERS Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the board of directors at any regular or special meeting of the board or, except in the case of an officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors. Any officer may resign at any time by giving written notice or by electronic transmission to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. 5.5 VACANCIES IN OFFICES Any vacancy occurring in any office of the corporation shall be filled by the board of directors. 5.6 CHAIRMAN OF THE BOARD The chairman of the board, if such an officer be elected, shall, if present, preside at meetings of the board of directors and exercise and perform such other powers and duties as may from time to time be assigned to him by the board of directors or as may be prescribed by these bylaws. If there is no president, then the chairman of the board shall also be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 5.7 of these bylaws. -15- 5.7 PRESIDENT Subject to such supervisory powers, if any, as may be given by the board of directors to the chairman of the board, if there be such an officer, the president shall be the chief executive officer of the corporation and shall, subject to the control of the board of directors, have general supervision, direction, and control of the business and the officers of the corporation. The president shall preside at all meetings of the stockholders and, in the absence or nonexistence of a chairman of the board, at all meetings of the board of directors. The president shall have the general powers and duties of management usually vested in the office of president of a corporation and shall have such other powers and duties as may be prescribed by the board of directors or these bylaws. 5.8 VICE PRESIDENTS In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors, these bylaws, the president or the chairman of the board. 5.9 SECRETARY The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the board of directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show the time and place of each meeting, whether regular or special (and, if special, how authorized and the notice given), the names of those present at directors' meetings or committee meetings, the number of shares present or represented at stockholders' meetings, and the proceedings thereof. The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation's transfer agent or registrar, as determined by resolution of the board of directors, a share register, or a duplicate share register, showing the names of all stockholders and their post office or street addresses or electronic addresses, if applicable, the number and classes of shares held by each, the number and date of certificates evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation. The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the board of directors required to be given by law or by these bylaws. The secretary shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the board of directors or by these bylaws. -16- 5.10 CHIEF FINANCIAL OFFICER The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director. The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the board of directors. The chief financial officer shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all his or her transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the board of directors or these bylaws. The chief financial officer shall be the treasurer of the corporation. 5.11 ASSISTANT SECRETARY The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the stockholders or board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as may be prescribed by the board of directors or these bylaws. 5.12 ASSISTANT TREASURER The assistant treasurer, or, if there is more than one, the assistant treasurers, in the order determined by the stockholders or board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the chief financial officer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the chief financial officer and shall perform such other duties and have such other powers as may be prescribed by the board of directors or these bylaws. -17- 5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS The chairman of the board, the president, any vice president, the chief financial officer, the secretary or assistant secretary of this corporation, or any other person authorized by the board of directors or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority. 5.14 AUTHORITY AND DUTIES OF OFFICERS In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the board of directors or the stockholders. ARTICLE VI INDEMNITY 6.1 THIRD PARTY ACTIONS The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the corporation, which approval shall not be unreasonably withheld) actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. -18- 6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) and amounts paid in settlement (if such settlement is approved in advance by the corporation, which approval shall not be unreasonably withheld) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if the person acted in good faith and in manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. Notwithstanding any other provision of this Article VI, no person shall be indemnified hereunder for any expenses or amounts paid in settlement with respect to any action to recover short-swing profits under Section 16(b) of the Exchange Act, as amended. 6.3 SUCCESSFUL DEFENSE To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection therewith. 6.4 DETERMINATION OF CONDUCT Any indemnification under Sections 6.1 and 6.2 (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that the indemnification of the director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in Sections 6.1 and 6.2. Such determination shall be made (1) by the board of directors or the executive committee, if any, by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding or (2) or if such quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. Notwithstanding the foregoing, a director, officer, employee or agent of the corporation shall be entitled to contest any -19- determination that the director, officer, employee or agent has not met the applicable standard of conduct set forth in Sections 6.1 and 6.2 by petitioning a court of competent jurisdiction. 6.5 PAYMENT OF EXPENSES IN ADVANCE Expenses incurred in defending a civil or criminal action, suit or proceeding, by an individual who may be entitled to indemnification pursuant to Section 6.1 or 6.2, shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that the individual is not entitled to be indemnified by the corporation as authorized in this Article VI. 6.6 INDEMNITY NOT EXCLUSIVE The indemnification and advancement of expenses provided by or granted pursuant to the other sections of this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in their official capacity and as to action in another capacity while holding such office. 6.7 INSURANCE INDEMNIFICATION The corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in any such capacity or arising out of the person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Article VI. 6.8 THE CORPORATION For purposes of this Article VI, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under and subject to the provisions of this Article VI (including, without limitation the -20- provisions of Section 6.4) with respect to the resulting or surviving corporation as the person would have with respect to such constituent corporation if its separate existence had continued. 6.9 EMPLOYEE BENEFIT PLANS For purposes of this Article VI, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Article VI. 6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VI shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE VII RECORDS AND REPORTS 7.1 MAINTENANCE AND INSPECTION OF RECORDS The corporation shall, either at its principal executive officer or at such place or places as designated by the board of directors, keep a record of its stockholders listing their names and post office or street addresses, or electronic mail addresses if applicable, and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books, and other records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business of the corporation to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person's interest as a stockholder. In every -21- instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal place of business. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the post office or street address, or electronic mail address if applicable, of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 7.2 INSPECTION BY DIRECTORS Any director shall have the right to examine the corporation's stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper. 7.3 ANNUAL STATEMENT TO STOCKHOLDERS The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation. -22- ARTICLE VIII GENERAL MATTERS 8.1 CHECKS From time to time, the board of directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments. 8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS The board of directors, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the board of directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount. 8.3 STOCK CERTIFICATES; PARTLY PAID SHARES The shares of the corporation shall be represented by certificates, provided that the board of directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the board of directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice-chairman of the board of directors, or the president or vice-president, and by the chief financial officer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if the person were such officer, transfer agent or registrar at the date of issue. The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock -23- certificate issued to represent any such partly paid shares, upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon. 8.4 SPECIAL DESIGNATION ON CERTIFICATES If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. 8.5 LOST CERTIFICATES Except as provided in this Section 8.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and canceled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or the owner's legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares. 8.6 CONSTRUCTION; DEFINITIONS Unless the context requires otherwise, the general provisions, rules of construction and definitions in the General Corporation Law of Delaware shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person. -24- 8.7 DIVIDENDS The directors of the corporation, subject to any restrictions contained in (i) the General Corporation Law of Delaware or (ii) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property or in shares of the corporation's capital stock. The directors of the corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies. 8.8 FISCAL YEAR The fiscal year of the corporation shall be fixed by resolution of the board of directors and may be changed by the board of directors. 8.9 SEAL The corporation may adopt a corporate seal, which shall be adopted and which may be altered by the board of directors, and may use the same by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. 8.10 TRANSFER OF STOCK Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books. 8.11 STOCK TRANSFER AGREEMENTS The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Delaware. -25- 8.12 REGISTERED STOCKHOLDERS The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE IX AMENDMENTS The bylaws of the corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws. -26- EX-10.1 4 f94551exv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 ASSIGNMENT AND ASSUMPTION AGREEMENT AND ACKNOWLEDGEMENT AND CONSENT This Assignment and Assumption Agreement and Acknowledgement and Consent (the "Agreement") is entered into as of the 30th day of September, 2003, by and among J.D. Edwards & Company, LLC, a Delaware limited liability company ("JDE LLC"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft") and Selco Service Corporation, an Ohio corporation ("Selco"). W I T N E S S E T H WHEREAS, on August 29, 2003, Jersey Acquisition Corporation, a Delaware corporation, merged with and into J.D. Edwards & Company, a Delaware corporation ("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter, J.D. Edwards merged with and into JDE LLC, which is wholly-owned by PeopleSoft, with JDE LLC being the surviving entity (collectively, the "Mergers"); and WHEREAS, Selco and JDE LLC, as successor-in-interest to J.D. Edwards, are parties to the following off-balance sheet lease financing transactions: a. Off-Balance Sheet Lease Financing for J.D. Edwards & Company for the Acquisition of a First Headquarters Building in Denver, Colorado (original closing date of August 26, 1998) ("Phase I Financing"); b. Off-Balance Sheet Lease Financing for J.D. Edwards & Company for the Construction of a Second and Third Headquarters Buildings in Denver, Colorado (original closing dates of November 15, 1997 and March 15, 1998) ("Phases II/III Financing"); and c. Off-Balance Sheet Lease Financing for J.D. Edwards & Company for the Acquisition and Construction of the Fourth Headquarters Building in Denver, Colorado (original closing date of November 10, 1998) ("Phase IV Financing"); and WHEREAS, the Phase I Financing, the Phases II/III Financing and the Phase IV Financing shall sometimes be collectively referred to herein as the "Financings"; and WHEREAS, in connection with the Mergers, JDE LLC assumed all of the obligations of J.D. Edwards under the Financings and Selco acknowledged such assumption; and WHEREAS, JDE LLC desires to assign to PeopleSoft and PeopleSoft desires to assume from JDE LLC all of the rights and interests of JDE LLC in, to and under the Financing Documents (as defined below); and -1- WHEREAS, PeopleSoft desires to assume from JDE LLC all liabilities and obligations of JDE LLC under the Financing Documents (while having JDE LLC also remain primarily liable thereunder as a principal and not as a surety); and WHEREAS, all of the Financings prohibit the assignment by JDE LLC of any of its rights under the Financings, unless certain conditions are met in full (the "Assignment Conditions"); and WHEREAS, Selco, JDE LLC and PeopleSoft desire to enter into this Agreement for the purpose of satisfying the Assignment Conditions. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft hereby agree as follows: 1. Definitions. (a) "Phase I Financing Documents" shall mean all documents, instruments or agreements evidencing, securing or otherwise related to the Phase I Financing, or creating or securing obligations of JDE LLC under the Phase I Financing, including any amendments, modifications, renewals, increases, replacements and extensions thereof; including without limitation the following documents, instruments and agreements: (i) Master Lease Agreement dated as of August 26, 1998 by and between Selco, as owner-lessor, and JDE LLC, as lessee, together with Lease Supplement No. 1 dated as of August 26, 1998; as amended by Amendment to Master Lease Agreement, Memorandum of Lease (including Lease Supplement No. 1), and Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 5, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187417; as further amended by Amendment to Master Lease Agreement dated July 9, 1999; as further amended by Amendment No. 3 to Master Lease Agreement dated November 12, 1999; and as further amended by Amendment to Definitions Appendix dated as of August 31, 2000 (collectively, the "Phase I Master Lease"); (ii) Memorandum of Lease (including Lease Supplement No. 1) dated as of August 26, 1998 and recorded in the land records of Denver, Colorado on August 27, 1998 under Reception No. 9800142715; as amended by Amendment to Master Lease Agreement, Memorandum of Lease (including Lease Supplement No. 1), and Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 5, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187417; (iii) Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of August 26, 1998 from JDE -2- LLC, to Selco and recorded in the land records of Denver, Colorado on August 27, 1988 under Reception No. 9800142719; as amended by Amendment to Master Lease Agreement, Memorandum of Lease (including Lease Supplement No. 1), and Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 5, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187417; (iv) The following Uniform Commercial Code financing statements naming JDE LLC as debtor: (1) naming Selco, as secured party, assigned to KeyBank National Association, as agent, filed with the Denver County Clerk and Recorder on August 27, 1998 under Reception No. 9800142724, as amended by UCC-3 filed with the Denver County Clerk and Recorder on November 10, 1998 under Reception No. 9800188462, as affected by UCC-3 filed with the Denver County Clerk and Recorder on March 29, 1999 under Reception No. 9900055508, as continued with the Denver County Clerk and Recorder on August 21, 2003 under Reception No. 2003175830 and as amended on August 28, 2003 under Reception No. 2003182799; (2) naming Selco, as secured party, and KeyBank National Association, as additional secured party, filed with the Colorado Secretary of State on August 31, 1998 under Reception No. 19982055672, as amended by UCC-3 filed with the Colorado Secretary of State on November 12, 1998 under Reception No. 19982070040, as filed "in lieu" with the Delaware Secretary of State on August 19, 2003 as Filing No. 32158908 and as amended on August 25, 2003 as Filing No. 32213422; (3) naming Selco, as secured party, assigned to KeyBank National Association, as agent, filed with the Colorado Secretary of State on August 31, 1998 under Reception No. 19982055673, as amended by UCC-3 filed with the Colorado Secretary of State on November 12, 1998 under Reception No. 19982070039, as filed "in lieu" with the Delaware Secretary of State on August 19, 2003 as Filing No. 32158916 and as amended on August 25, 2003 as Filing No. 32213240; (4) naming Selco, as secured party, assigned to KeyBank National Association, as agent, filed with the Denver County Clerk and Recorder on August 27, 1998 under Reception No. 9800142723, as amended by UCC-3 filed with the Denver County Clerk and Recorder on November 10, 1998 under Reception No. 9800188461, as continued with the Denver County Clerk and -3- Recorder on August 19, 2003 under Reception No. 2003174372 and as amended on August 28, 2003 under Reception No. 2003182800; and (5) naming KeyBank National Association, as agent, as secured party, filed with the Colorado Secretary of State on June 16, 1999 under Reception No. 19992034067, as filed "in lieu" with the Delaware Secretary of State on August 19, 2003 as Filing No. 32158940, as amended on August 25, 2003 as Filing No. 32213133, and as amended on September 17, 2003 as Filing No. 32422320. (v) Subordination, Recognition, Nondisturbance and Attornment Agreement dated as of August 26, 1998 by and between JDE LLC and KeyBank National Association, a national banking association, as Agent for itself and other Lenders and recorded in the land records of Denver, Colorado on August 27, 1998 under Reception No. 9800142720; as amended by Amendment to Subordination, Recognition, Nondisturbance and Attornment Agreement dated October 27, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187419; (vi) Pledge and Security Agreement dated as of August 26, 1998 from JDE LLC in favor of Selco and KeyBank National Association, a national banking association, as agent for various lenders; as amended by Side Letter Agreement dated May 13, 1999; as further amended by Amendment to Pledge and Security Agreement dated November 30, 2001 and as further amended by Side Letter Agreement dated August 29, 2003 (collectively, the "Phase I Pledge Agreement"); (vii) Environmental Indemnity Agreement dated as of August 26, 1998 from JDE LLC, J.D. Edwards World Solutions Company, a Colorado corporation, and J.D. Edwards World Service Company, a Colorado corporation; (viii) Construction Agency Agreement dated as of August 26, 1998 by and between JDE LLC and Selco; and (ix) Assignment Agreement dated as of August 26, 1998 by and between JDE LLC and Selco in connection with a certain Purchase and Sale Agreement dated as of August 6, 1998. (b) "Phases II/III Financing Documents" shall mean all documents, instruments or agreements evidencing, securing or otherwise related to the Phases II/III Financing, or creating or securing obligations of JDE LLC under the Phases II/III Financing, including any amendments, modifications, renewals, increases, replacements and extension thereof; including without limitation to following documents, instruments and agreements: -4- (i) Ground Lease dated November 15, 1997 between JDE LLC and Selco; as amended by Amendment No. 1 to Ground Lease dated as of March 15, 1998 ("Phases II/III Ground Lease"); (ii) Memorandum of Ground Lease dated as of November 21, 1997 by and between JDE LLC and Selco and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159090; (iii) Master Lease Agreement dated as of November 15, 1997 by and between Selco, as owner-lessor, and JDE LLC, as lessee, together with First Lease Supplement dated as of November 15, 1997, as amended and restated by Amended and Restated First Lease Supplement dated as of March 15, 1998, and together with Second Lease Supplement dated as of March 15, 1998; as amended by Amendment No. 1 to Master Lease dated as of March 15, 1998; as further amended by Amendment to Master Lease Agreement dated July 9, 1999; as further amended by Amendment No. 3 to Master Lease Agreement dated November 12, 1999; and as further amended by Amendment to Definitions Appendix dated as of August 31, 2000 (collectively, the "Phases II/III Master Lease"); (iv) Memorandum of Lease dated as of November 21, 1997 and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159091; as amended and restated by Amended and Restated Memorandum of Lease dated as of April 2, 1998 and recorded in the land records of Denver, Colorado on April 2, 1998 under Reception No. 9800050216; (v) Construction Agency Agreement dated as of November 15, 1997 by and between JDE LLC and Selco, as amended by Amendment No. 1 to Phase II Construction Agency Agreement dated as of March 15, 1998, together with Phase III Construction Agency Agreement dated as of March 15, 1998 by and between JDE LLC and Selco; (vi) Pledge and Security Agreement dated as of November 15, 1997 from JDE LLC in favor of Selco and KeyBank National Association, a national banking association; as amended by Amendment No. 1 to Pledge and Security Agreement dated as of March 15, 1998; as further amended by Side Letter Agreement dated May 13, 1999; as further amended by Amendment to Pledge and Security Agreement dated November 30, 2001; and as further amended by Side Letter Agreement dated August 29, 2003 (collectively, the "Phase II/III Pledge Agreement"); (vii) The following Uniform Commercial Code Financing Statements naming JDE LLC, as debtor: (1) naming Selco, as secured party, assigned to KeyBank National Association, filed with the Delaware Secretary of State on August -5- 20, 2003 as Filing No. 32171877 and as amended on August 25, 2003 as Filing No. 32213091; (2) naming Selco, as secured party, assigned to KeyBank National Association, filed with the Delaware Secretary of State on August 20, 2003 as Filing No. 32171885 and as amended on August 25, 2003 as Filing No. 32213380; (3) naming Selco, as secured party, assigned to KeyBank National Association, filed with the Denver County Clerk and Recorder on August 21, 2003 under Reception No. 2003175827 and as amended on August 28, 2003 under Reception No. 2003182802; and (4) naming KeyBank National Association, as agent, as secured party, filed with the Colorado Secretary of State on June 16, 1999 under Reception No. 19992034066, as filed "in lieu" with the Delaware Secretary of State on August 19, 2003 as Filing No. 32158932 and as amended on August 25, 2003 as Filing No. 32213059, and as amended on September 17, 2003 as Filing No. 32422338. (viii) Deed of Trust, Security Agreement and Fixture Financing Statement dated as of November 15, 1997 from JDE LLC to the Public Trustee in and for the City and County of Denver, Colorado, for the benefit of Selco, and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception no. 9700159088; as assigned to KeyBank National Association, a national banking association, by Assignment dated as of November 15, 1997 and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159089, as amended and restated by that certain Amended and Restated Deed of Trust, Security Agreement and Fixture Financing Statement dated as of March 15, 1998 and recorded in the land records of Denver, Colorado on April 2, 1998 under Reception No. 9800050214; (ix) Estoppel Certificate from JDE LLC in connection with the Phases II/III Master Lease dated as of November 24, 1997; (x) Collateral Assignment and Security Agreement with Respect of Contracts, Licenses and Permits dated as of April 1, 1998 from JDE LLC to Selco; (xi) Environmental Indemnity dated as of November 15, 1997 from JDE LLC, J.D. Edwards World Solutions Company, a Colorado corporation, and J.D. Edwards World Source Company, a Colorado corporation; as amended and restated by Amended and Restated Environmental Indemnity Agreement dated as of April 1, 1998; -6- (xii) Recognition, Non-Disturbance and Attornment Agreement dated as of November 15, 1997 by and between JDE LLC and KeyBank National Association, a national banking association and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159095; as amended and restated by Amended and Restated Recognition, Non-Disturbance and Attornment Agreement dated as of March 15, 1998 and recorded in the land records of Denver, Colorado on April 2, 1998 under Reception No. 9800050220; and (xiii) Subordination and Agreement Relative to Deed of Trust dated as of November 15, 1997 from JDE LLC in favor of KeyBank National Association, a national banking association, and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159092; as amended and restated by Amended and Restated Subordination and Agreement Relative to Deed of Trust dated as of March 15, 1998. (c) "Phase IV Financing Documents" shall mean all documents, instruments or agreements evidencing, securing or otherwise related to the Phase IV Financing, or creating or securing obligations of JDE LLC under the Phase IV Financing, including any amendments, modifications, renewals, increases, replacements and extensions thereof; including without limitation the following documents, instruments and agreements: (i) Ground Lease dated November 10, 1998 between JDE LLC and Selco; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101 ("Phase IV Ground Lease"); (ii) Master Lease Agreement dated as of November 10, 1998 by and between Selco, as owner-lessor, and JDE LLC, as lessee, together with Lease Supplement No. 1 dated as of November 10, 1998; as amended by First Amendment to Master Lease Agreement and other Transaction Documents dated February 22, 1999; as further amended by Amendment to Master Lease dated July 9, 1999; as further amended by Amendment No. 2 to Master Lease Agreement dated November 12, 1999; as further amended by Amendment to Definitions Appendix dated as of August 31, 2000; and as further amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101 (collectively, the Phase IV Master Lease"); (iii) Memorandum of Ground Lease dated as of November 10, 1998 by and between JDE LLC and Selco and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188464; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; -7- (iv) Memorandum of Lease (including Lease Supplement No. 1) dated as of November 10, 1998 by and between JDE LLC and Selco and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188465; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; (v) Deed of Trust, Security Agreement and Fixture Financing Statement dated as of November 10, 1998 from JDE LLC to the Public Trustee in and for the City and County of Denver, Colorado, for the benefit of Selco, and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188463; as affected by Request to Release of Deed of Trust and Release recorded in the land records of Denver, Colorado on July 31, 2001 under Reception No. 2001125369; (vi) Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 10, 1998 from JDE LLC to Selco and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188470; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; (vii) The following Uniform Commercial Code financing statements naming JDE LLC as debtor: (1) naming Selco, as secured party, assigned to KeyBank National Association, as agent, filed with the Denver County Clerk and Recorder on November 10, 1998 under Reception No. 9800188472, as amended by UCC-3 filed with the Denver County Clerk and Recorder on March 29, 1999 under Reception No. 9900055510, as amended by UCC-3 filed with the Denver County Clerk and Recorder on July 11, 2001 under Reception No. 2001113103, as continued with the Denver County Clerk and Recorder on August 21, 2003 under Reception No. 2003175831 and as amended on August 28, 2003 under Reception No. 2003182798; (2) naming Selco, as secured party, assigned to KeyBank National Association, as agent, filed with the Colorado Secretary of State on November 12, 1998 under Reception No. 19982070038, as filed "in lieu" with the Delaware Secretary of State on August 19, 2003 as Filing No. 32158924 and as amended on August 25, 2003 as Filing No. 32213208; (3) naming Selco, as secured party, assigned to KeyBank National Association, as agent, filed with the Denver County Clerk and -8- Recorder on November 10, 1998 under Reception No. 9800188473, as affected by UCC-3 filed with the Denver County Clerk and Recorder on March 29, 1999 under Reception No. 9900055507, as continued with the Denver County Clerk and Recorder on August 19, 2003 under Reception No. 2003174374 and as amended on August 28, 2003 under Reception No. 2003182801; and (4) naming KeyBank National Association, as agent, as secured party, filed with the Colorado Secretary of State on June 16, 1999 under Reception No. 19992034068, as filed "in lieu" with the Delaware Secretary of State on August 19, 2003 as Filing No. 32158957, as amended on August 25, 2003 as Filing No. 32213406 and as amended on September 17, 2003 as Filing No. 32422346. (viii) Recognition, Non-Disturbance and Attornment Agreement dated as of November 10, 1998 by and between JDE LLC and KeyBank National Association, a national banking association, as Agent for itself and other Lenders, and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188471; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; (ix) Subordination and Agreement Relative to Owner Deed of Trust dated as of November 10, 1998 from JDE LLC in favor of Selco and KeyBank National Association, a national banking association, as Agent for the Lenders and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188466; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; (x) Pledge and Security Agreement dated as of November 10, 1998 from JDE LLC to Selco and KeyBank National Association, a national banking association, as agent for various lenders; as amended by First Amendment to Master Lease Agreement and other Transaction Documents dated February 22, 1999; as further amended by Side Letter Agreement dated May 13, 1999; as further amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; as further amended by Amendment to Pledge and Security Agreement dated November 19, 2001; and as further amended by Side Letter Agreement dated August 27, 2003 (collectively, the "Phase IV Pledge Agreement"); (xi) Environmental Indemnity Agreement dated as of November 10, 1998 from JDE LLC, J.D. Edwards World Solutions Company, a Colorado -9- corporation, and J.D. Edwards World Source Company, a Colorado corporation; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; and (xii) Construction Agency Agreement dated as of November 10, 1998 by and between JDE LLC and Selco; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101. Each of the Uniform Commercial Code Financing Statements described in the foregoing Sections 1(a)(iv), 1(b)(vii) and 1(c)(vii) shall sometimes be collectively referred to herein as the "UCC Financing Statements". 2. Assignment. JDE LLC hereby transfers, assigns and conveys to PeopleSoft all of JDE LLC's rights and interests in and to the Phase I Financing Documents, the Phases II/III Financing Documents and the Phase IV Financing Documents (which shall sometimes be collectively referred to herein as the "Financing Documents"). Notwithstanding anything to the contrary herein, JDE LLC shall remain primarily liable under the Financing Documents (as a principal and not as a surety). 3. Assumption. PeopleSoft hereby accepts and assumes all such right and interests assigned to it above and also hereby accepts and assumes all past, current and future liabilities and obligations, and joins in all representations, warranties, and indemnities, of JDE LLC under the Financing Documents. Such assumption is absolute and irrevocable. PeopleSoft shall perform, comply with and be bound by all the terms, covenants, agreements, provisions and conditions of the Financing Documents on the part of JDE LLC to be performed hereunder before and/or after the date hereof. Notwithstanding anything to the contrary herein, the parties hereto agree and acknowledge that nothing set forth in this Agreement or in any of the other documents executed in connection herewith shall constitute a release of JDE LLC from any of its liabilities or obligations under the Financing Documents, and that JDE LLC and PeopleSoft each shall be primarily liable thereunder as principals and not as sureties. 4. Representations. JDE LLC and PeopleSoft hereby represent and warrant as follows: (a) PeopleSoft is a corporation controlling JDE LLC by reason of stock ownership of JDE LLC of greater than fifty percent (50%); (b) JDE LLC and PeopleSoft will promptly and duly execute and deliver to Selco such other documents and assurances, and will take such further actions as Selco may from time to time reasonably request, in order to carry out more effectively the intent and purposes of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of Selco hereunder or under the Financing Documents; -10- (c) To the knowledge of JDE LLC and PeopleSoft, as applicable, neither Selco nor KeyBank National Association (in its individual capacity or as an agent for various lenders) is in default under any of the terms of the Financing Documents, nor has any event occurred, which with the giving of notice or the passage of time, or both, could constitute such a default; (d) To the knowledge of JDE LLC and PeopleSoft, as applicable, neither JDE LLC nor PeopleSoft has any claims, counterclaims, defenses or set-offs against any other party to the Financing Documents; (e) The assignment and assumption set forth herein and the execution and delivery of this Agreement or any other document executed in connection herewith will not constitute a violation of any law, order or regulation applicable to JDE LLC or PeopleSoft or any contract or agreement to which either is a party or by which any of its properties may be bound; and (f) This Agreement and each and every document to be executed by JDE LLC and/or PeopleSoft in connection herewith are duly authorized, executed and delivered, and assuming the due authorization, execution and delivery thereof by the other parties thereto (other than J.D. Edwards World Source Company and J.D. Edwards World Solution Company) constitute the legal, valid and binding obligations of JDE LLC and PeopleSoft in accordance with the respective terms hereof and thereof, except as enforceability may be subject to the exercise of judicial discretion in accordance with general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws for the relief of debtors. 5. Covenants, Representations and Warranties. JDE LLC hereby reaffirms, and PeopleSoft hereby affirms, that from and after the date hereof, PeopleSoft shall be responsible for performing all covenants, representations and warranties of JDE LLC in the Financing Documents. The foregoing shall not be deemed in any way to release JDE LLC from liability under the Financing Documents 6. Acknowledgement. In reliance on this Agreement, and provided that the conditions precedent set forth in Section 8 of this Agreement have been satisfied, Selco hereby acknowledges that except for the matters set forth in Section 7, the assignment of the Financing Documents and the related collateral, rights and interests to PeopleSoft does not require the consent of Selco under the Financing Documents. JDE LLC and PeopleSoft agree and acknowledge that such acknowledgement is a one time acknowledgement relating solely to the assignment of the Financing Documents to PeopleSoft and shall not extend to any other assignment of the Financing Documents. Selco, JDE LLC and PeopleSoft further agree and acknowledge that all references in the Financing Documents to J.D. Edwards or JDE LLC, or other terms used therein which refer to J.D. Edwards or JDE LLC, shall be deemed to mean and to refer to PeopleSoft. Without limiting the generality of the foregoing, Selco further acknowledges and agrees that upon such assignment and assumption, PeopleSoft will be the lessee under the Phase I Master Lease, the Phases II/III Master Lease and the Phase IV Master Lease. -11- 7. Consent. Selco hereby consents to the assignment by JDE LLC to PeopleSoft of (a) JDE LLC's interest in the Phases II/III Ground Lease and the Phase IV Ground Lease and (b) of JDE LLC's interest in the Phase I Pledge Agreement, the Phase II/III Pledge Agreement, the Phase IV Pledge Agreement and the related collateral. Selco hereby further consents to the conveyance to PeopleSoft of the fee interest in the land described in the Phases II/III Ground Lease and the Phase IV Ground Lease. JDE LLC and PeopleSoft agree and acknowledge that such consent is a one time consent relating solely to the assignments and conveyance to PeopleSoft and shall not extend to any other assignment of the ground lessor's interest in the Phases II/III Ground Lease or the Phase IV Ground Lease or to any other assignment of the Phase I Pledge Agreement, the Phases II/III Pledge Agreement or the Phase IV Pledge Agreement, or the related collateral, or to any other conveyance of the fee interest in the land described therein. 8. Conditions Precedent to Acknowledgement and Consent. The acknowledgement set forth in Section 6 of this Agreement and the consent set forth in Section 7 of this Agreement shall become effective upon the execution of this Agreement by Selco; provided, however, that the following conditions shall be satisfied prior thereto (or in the case of the conditions set forth in Section 8(c), Section 8(e) and Section 8(f), within the time periods set forth therein): (a) Selco shall have received two (2) executed originals of this Agreement signed by JDE LLC and PeopleSoft; (b) PeopleSoft shall have filed amendments to all UCC Financing Statements (filed in respect of the Financings, and which name JDE LLC as the debtor) in form and substance reasonably satisfactory to Selco for all UCC Financing Statements which shall substitute PeopleSoft as the debtor; (c) Within seven (7) days after the date of this Agreement, Selco shall have received, at the sole expense of JDE LLC and PeopleSoft, endorsements to all title insurance policies issued in favor of Selco or KeyBank National Association in connection with the Financings, in form and substance reasonably satisfactory to Selco, reflecting the assignment of all rights and interests in the Financings from JDE LLC to PeopleSoft and the assumption of liabilities and obligations under the Financings by PeopleSoft; (d) Selco shall have received letters, in form and substance acceptable to Selco, from McDonald Investments, Inc. (with respect to Account Nos. 61467363, 61467396 and 61467382) acknowledging that PeopleSoft is the owner of each account and that McDonald Investments, Inc. shall indicate on its books and records that each account shall remain pledged by PeopleSoft, as debtor, to Selco and KeyBank National Association, as agent; (e) Within sixty (60) days after the date of this Agreement, Selco shall have received an opinion of counsel for JDE LLC and PeopleSoft, in the form delivered to Selco on the date hereof, with respect to the due organization, legal existence and corporate power and authority of JDE LLC and PeopleSoft to enter into and perform this -12- Agreement and the enforceability of this Agreement and all other documents executed in connection herewith against JDE LLC and PeopleSoft; (f) Within three (3) days after the date of this Agreement, Selco shall have received payment in full of all of Selco's costs and expenses related to this Agreement; (g) The representations and warranties set forth in Section 4 of this Agreement shall be true and correct; and (h) Selco shall have received the deeds, amendments, assignments and assumption agreements attached hereto and incorporated herein by reference as Exhibit 1. 9. Evidence of Filing of Amendments to UCC Financing Statements. PeopleSoft shall provide Selco with evidence that the amendments to the UCC Financing Statements required to be filed under Section 8(b) above have been filed within three (3) weeks of the date of this Agreement. JDE LLC and PeopleSoft hereby acknowledge and agree that if evidence of all required amendments to the UCC Financing Statements is not provided to Selco according to the terms of Section 8(b) above, the acknowledgement granted pursuant to this Agreement shall be null and void and JDE LLC shall be deemed in default of its obligations under the Financing Documents. 10. Notices. From and after the date of this Agreement, all notices and other correspondence to be delivered to PeopleSoft or any Guarantor (as defined in the Financing Documents) pursuant to any Financing Document shall be sent to the following addresses: PeopleSoft, Inc. 4460 Hacienda Drive Pleasanton, California 94588 Attention: Anne S. Jordan, Vice President & Secretary and to: PeopleSoft, Inc. 4500 PeopleSoft Parkway Pleasanton, California 94588 Attention: John Schoonbrood, Vice President & Corporate Treasurer 11. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Colorado and may not be modified or amended in any manner other than by written agreement signed by the party to charged therewith. (b) This Agreement may be executing in counterparts, which collectively shall constitute one instrument. -13- (c) This Agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns. (d) Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be valid under applicable law, but, if any provision of this Agreement shall be invalid or prohibited thereunder, such invalidity or prohibition shall be construed as if such invalid or prohibited provision had not been inserted herein and shall not affect the remainder of such provision or the remaining provisions of this Agreement. (e) The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto for any reason, including without limitation, by virtue of the fact that it may have been drafted or prepared by counsel for one of the parties, it being recognized that all parties have contributed materially and substantially to the preparation of this Agreement. Section and Paragraph headings of this Agreement are solely for convenience of reference and shall not govern the interpretation of any of the provisions of this Agreement. (f) This Agreement is the complete agreement among the parties hereto with respect to the subject matter hereof. -14- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. J.D. EDWARDS & COMPANY, LLC, a Delaware limited liability company By: /s/ Anne S. Jordan ------------------------------ Name: Anne S. Jordan duly authorized PEOPLESOFT, INC, a Delaware corporation By: /s/ Anne S. Jordan ------------------------------ Name: Anne S. Jordan duly authorized SELCO SERVICE CORPORATION, an Ohio corporation By: /s/ Donald C. Davis ------------------------------ Name: Donald C. Davis duly authorized -15- The following parties hereby consent to the foregoing Agreement and the terms thereof: J.D. EDWARDS WORLD SOURCE COMPANY, a Colorado corporation By: /s/ Richard G. Snow ------------------------------ Name: Richard G. Snow Title: VP/Gen. Counsel J.D. EDWARDS WORLD SOLUTION COMPANY, a Colorado corporation By: /s/ Richard G. Snow ------------------------------ Name: Richard G. Snow Title: VP/Gen. Counsel The following party hereby acknowledges the foregoing Agreement and the terms thereof: KEYBANK NATIONAL ASSOCIATION, individually and as agent By: /s/ Thomas A. Crandell ------------------------------ Name: Thomas A. Crandell Title: Senior Vice President -16- EX-10.2 5 f94551exv10w2.txt EXHIBIT 10.2 EXHIBIT 10.2 PHASE I ASSIGNMENT AND ASSUMPTION OF SECURITY DOCUMENTS AND AMENDMENT TO MEMORANDUM OF LEASE (INCLUDING LEASE SUPPLEMENT NO. 1) This Assignment and Assumption of Security Documents and Amendment to Memorandum of Lease (including Lease Supplement No. 1) ("Agreement") is made as of the 30th day of September, 2003 by and among J.D. Edwards & Company, LLC, a Delaware limited liability company ("JDE LLC"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft") and Selco Service Corporation, an Ohio Corporation ("Selco"). I Background 1. On August 29, 2003, Jersey Acquisition Corporation, a Delaware corporation, merged with and into J.D. Edwards & Company, a Delaware corporation ("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter, J.D. Edwards merged with and into JDE LLC, which is wholly owned by PeopleSoft, with JDE LLC being the surviving entity. 2. Selco and JDE LLC, as successor-in-interest to J.D. Edwards, are parties to that certain Off-Balance Sheet Lease Financing for J.D. Edwards & Company for the acquisition of a First Headquarters Building in Denver, Colorado (original closing date of August 26, 1998) ("Phase I Financing"). 3. For purposes of this Agreement the term "Phase I Financing Documents" shall mean all documents, instruments or agreements evidencing, securing or otherwise related to the Phase I Financing, or creating or securing obligations of JDE LLC under the Phase I Financing, including any amendments, modifications, renewals, increases, replacements or extensions thereof; including without limitation, all of the following documents, instruments or agreements that were recorded in the land records of Denver County, Colorado: (i) Master Lease Agreement dated as of August 26, 1998 by and between Selco, as owner-lessor, and JDE LLC, as lessee, together with Lease Supplement No. 1 dated as of August 26, 1998; as amended by Amendment to Master Lease Agreement, Memorandum of Lease (including Lease Supplement No. 1), and Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 5, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187417; as further amended by Amendment to Master Lease Agreement dated July 9, 1 1999; as further amended by Amendment No. 3 to Master Lease Agreement dated November 12, 1999; and as further amended by Amendment to Definitions Appendix dated as of August 31, 2000 (collectively, the "Phase I Master Lease"); (ii) Memorandum of Lease (including Lease Supplement No. 1) dated as of August 26, 1998 and recorded in the land records of Denver, Colorado on August 27, 1998 under Reception No. 9800142715; as amended by Amendment to Master Lease Agreement, Memorandum of Lease (including Lease Supplement No. 1), and Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 5, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187417 (collectively, the "Phase I Memorandum of Lease"); (iii) Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of August 26, 1998 from JDE LLC, to Selco and recorded in the land records of Denver, Colorado on August 27, 1988 under Reception No. 9800142719; as amended by Amendment to Master Lease Agreement, Memorandum of Lease (including Lease Supplement No. 1), and Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 5, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187417; and (iv) Subordination, Recognition, Nondisturbance and Attornment Agreement dated as of August 26, 1998 by and between JDE LLC and KeyBank National Association, a national banking association, as Agent for itself and other Lenders and recorded in the land records of Denver, Colorado on August 27, 1998 under Reception No. 9800142720; as amended by Amendment to Subordination, Recognition, Nondisturbance and Attornment Agreement dated October 27, 1998 and recorded in the land records of Denver, Colorado on November 9, 1998 under Reception No. 9800187419. 4. On this date, JDE LLC has assigned to PeopleSoft and PeopleSoft has assumed from JDE LLC all of JDE LLC's rights and interest under the Phase I Master Lease, and the other Phase I Financing Documents. 5. On this date, PeopleSoft has assumed all of JDE LLC's obligations and liabilities under the Phase I Master Lease and the other Phase I Financing Documents, while JDE LLC also remains primarily liable thereunder as a principal and not as a surety. 6. Selco, JDE LLC, PeopleSoft desire to enter into this Agreement for purposes of confirming, evidencing and effectuating such assignment and assumption. 2 Now, therefore, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft hereby agree as follows: (i) Assignment. JDE LLC hereby transfers, assigns and conveys to PeopleSoft all of JDE LLC's rights and interest in and to the Phase I Financing Documents, including without limitation, all of JDE LLC's rights and interests under the Phase I Master Lease. Notwithstanding anything to the contrary herein, JDE LLC shall remain primarily liable under the Phase I Financing Documents (as a principal and not as a surety). (ii) Assumption. PeopleSoft hereby accepts and assumes all such rights and interests assigned to it above and also hereby accepts and assumes all past, current liabilities and obligations, and joins in all representations, warranties and indemnities of JDE LLC, under the Phase I Financing Documents. Notwithstanding anything to the contrary herein, the parties hereto agree and acknowledge that nothing set forth in this Agreement or in any of the other documents executed in connection herewith shall constitute a release of JDE LLC from any of its liabilities or obligations under the Phase I Financing Documents, and that JDE LLC and PeopleSoft each shall be primarily liable thereunder as principals and not as sureties. (iii) As of the date of this Agreement, all references in the Phase I Financing Documents to J.D. Edwards or JDE LLC, or other terms used therein which refer to J.D. Edwards or JDE LLC, shall be deemed to mean and refer to PeopleSoft. (iv) The term "Lessee," as set forth in the Phase I Memorandum of Lease, shall mean PeopleSoft. (v) Except as herein affected, the Phase I Financing Documents and all covenants, agreements, terms and conditions thereof shall remain and continue in full force and effect and are hereby in all respects ratified and confirmed. (vi) The covenants, agreements, terms and conditions of this Agreement shall bind and inure to the benefit to the parties hereto and their respective permitted successors and assigns. (vii) This Agreement shall not be changed orally, but only by writing signed by the parties against whom enforcement thereof is sought. 3 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. J.D. EDWARDS & COMPANY, LLC, a Delaware limited liability company By: /s/ Anne S. Jordan ------------------------------ Name: Anne S. Jordan Duly Authorized PEOPLESOFT, INC., a Delaware corporation By: /s/ Anne S. Jordan ------------------------------ Name: Anne S. Jordan Duly Authorized SELCO SERVICE CORPORATION, an Ohio corporation By: /s/ Donald C. Davis ------------------------------ Name: Donald C. Davis Duly Authorized 4 The following party hereby acknowledges the foregoing Agreement and the terms thereof: KEYBANK NATIONAL ASSOCIATION, individually and as agent By: /s/ Thomas A. Crandell ----------------------- Name: Thomas A. Crandell Title: Senior Vice President [notary acknowledgements omitted] 5 EX-10.3 6 f94551exv10w3.txt EXHIBIT 10.3 EXHIBIT 10.3 PHASES II/III ASSIGNMENT AND ASSUMPTION OF SECURITY DOCUMENTS, AMENDMENT TO MEMORANDUM OF LEASE AND AMENDMENT TO MEMORANDUM OF GROUND LEASE This Assignment and Assumption of Security Documents, Amendment to Memorandum of Lease and Amendment to Memorandum of Ground Lease ("Agreement") is made as of the 30th day of September, 2003 by and among J.D. Edwards & Company, LLC, a Delaware limited liability company ("JDE LLC"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft") and Selco Service Corporation, an Ohio Corporation ("Selco"). I Background 1. On August 29, 2003, Jersey Acquisition Corporation, a Delaware corporation, merged with and into J.D. Edwards & Company, a Delaware corporation ("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter, J.D. Edwards merged with and into JDE LLC, which is wholly owned by PeopleSoft, with JDE LLC being the surviving entity. 2. Selco and JDE LLC, as successor-in-interest to J.D. Edwards, are parties to that certain Off-Balance Sheet Lease Financing for J.D. Edwards & Company for the Construction of a Second and Third Headquarters Buildings in Denver, Colorado (original closing dates of November 15, 1997 and March 15, 1998) ("Phases II/III Financing"). 3. For purposes of this Agreement the term "Phases II/III Financing Documents" shall mean all documents, instruments or agreements evidencing, securing or otherwise related to the Phases II/III Financing, or creating or securing obligations of JDE LLC under the Phases II/III Financing, including any amendments, modifications, renewals, increases, replacements or extensions thereof; including without limitation, all of the following documents, instruments or agreements that were recorded in the land records of Denver County, Colorado: (i) Ground Lease dated November 15, 1997 between JDE LLC and Selco; as amended by Amendment No. 1 to Ground Lease dated as of March 15, 1998 ("Phases II/III Ground Lease"); (ii) Memorandum of Ground Lease dated as of November 21, 1997 by and between JDE LLC and Selco and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159090 (Phases II/III Memorandum of Ground Lease"); 1 (iii) Master Lease Agreement dated as of November 15, 1997 by and between Selco, as owner-lessor, and JDE LLC, as lessee, together with First Lease Supplement dated as of November 15, 1997, as amended and restated by Amended and Restated First Lease Supplement dated as of March 15, 1998, and together with Second Lease Supplement dated as of March 15, 1998; as amended by Amendment No. 1 to Master Lease dated as of March 15, 1998; as further amended by Amendment to Master Lease Agreement dated July 9, 1999; as further amended by Amendment No. 3 to Master Lease Agreement dated November 12, 1999; and as further amended by Amendment to Definitions Appendix dated as of August 31, 2000 (collectively, the "Phases II/III Master Lease"); (iv) Memorandum of Lease dated as of November 21, 1997 and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159091; as amended and restated by Amended and Restated Memorandum of Lease dated as of April 2, 1998 and recorded in the land records of Denver, Colorado on April 2, 1998 under Reception No. 9800050216 (collectively, the "Phases II/III Memorandum of Lease"); (v) Deed of Trust, Security Agreement and Fixture Financing Statement dated as of November 15, 1997 from JDE LLC to the Public Trustee in and for the City and County of Denver, Colorado, for the benefit of Selco, and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception no. 9700159088; as assigned to KeyBank National Association, a national banking association, by Assignment dated as of November 15, 1997 and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159089, as amended and restated by that certain Amended and Restated Deed of Trust, Security Agreement and Fixture Financing Statement dated as of March 15, 1998 and recorded in the land records of Denver, Colorado on April 2, 1998 under Reception No. 9800050214 (collectively, the "Phases II/III Deed of Trust"); (vi) Recognition, Non-Disturbance and Attornment Agreement dated as of November 15, 1997 by and between JDE LLC and KeyBank National Association, a national banking association and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159095; as amended and restated by Amended and Restated Recognition, Non-Disturbance and Attornment Agreement dated as of March 15, 1998 and recorded in the land records of Denver, Colorado on April 2, 1998 under Reception No. 9800050220; and (vii) Subordination and Agreement Relative to Deed of Trust dated as of November 15, 1997 from JDE LLC in favor of KeyBank National Association, a national banking association, and recorded in the land records of Denver, Colorado on November 24, 1997 under Reception No. 9700159092; as amended and restated by Amended and Restated 2 Subordination and Agreement Relative to Deed of Trust dated as of March 15, 1998. 4. On this date, JDE LLC has assigned to PeopleSoft and PeopleSoft has assumed from JDE LLC all of JDE LLC's rights and interest under the Phases II/III Ground Lease, the Phases II/III Master Lease, and the other Phases II/III Financing Documents. 5. On this date, PeopleSoft has assumed all of JDE LLC's obligations and liabilities under the Phases II/III Ground Lease, the Phases II/III Master Lease, and the other Phases II/III Financing Documents, while JDE LLC also remains primarily liable thereunder as a principal and not as a surety. 6. Selco, JDE LLC, PeopleSoft desire to enter into this Agreement for purposes of confirming, evidencing and effectuating such assignment and assumption. Now, therefore, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft hereby agree as follows: (i) Assignment. JDE LLC hereby transfers, assigns and conveys to PeopleSoft all of JDE LLC's rights and interest in and to the Phases II/III Financing Documents, including without limitation, all of JDE LLC's rights and interests under the Phases II/III Ground Lease and the Phases II/III Master Lease. Notwithstanding anything to the contrary herein, JDE LLC shall remain primarily liable under the Phases II/III Financing Documents (as a principal and not as a surety). (ii) Assumption. PeopleSoft hereby accepts and assumes all such rights and interests assigned to it above and also hereby accepts and assumes all past, current liabilities and obligations, and joins in all representations, warranties and indemnities of JDE LLC, under the Phases II/III Financing Documents, including without limitation, all liabilities and obligations under the Phases II/III Deed of Trust. Notwithstanding anything to the contrary herein, the parties hereto agree and acknowledge that nothing set forth in this Agreement or in any of the other documents executed in connection herewith shall constitute a release of JDE LLC from any of its liabilities or obligations under the Phase II/III Financing Documents, and that JDE LLC and PeopleSoft each shall be primarily liable thereunder as principals and not as sureties. (iii) JDE LLC has granted, conveyed, transferred, delivered, assigned and set over unto the Public Trustee in and for the City and County of Denver, Colorado as Trustee for the benefit of Selco, the property described in the Phases II/III Deed of Trust. PeopleSoft hereby ratifies and confirms such grant, conveyance, transfer, delivery, assignment and setting over. 3 (iv) As of the date of this Agreement, all references in the Phases II/III Financing Documents to J.D. Edwards or JDE LLC, or other terms used therein which refer to J.D. Edwards or JDE LLC, shall be deemed to mean and refer to PeopleSoft. (v) The term "Tenant," as set forth in the Phases II/III Memorandum of Lease, shall mean PeopleSoft. (vi) The term "Ground Landlord," as set forth in the Phases II/III Memorandum of Ground Lease, shall mean PeopleSoft. (vii) Except as herein affected, the Phases II/III Financing Documents and all covenants, agreements, terms and conditions thereof shall remain and continue in full force and effect and are hereby in all respects ratified and confirmed. (viii) The covenants, agreements, terms and conditions of this Agreement shall bind and inure to the benefit to the parties hereto and their respective permitted successors and assigns. (ix) This Agreement shall not be changed orally, but only by writing signed by the parties against whom enforcement thereof is sought. 4 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. J.D. EDWARDS & COMPANY, LLC, a Delaware limited liability company By: /s/ Anne S. Jordan ------------------------------ Name: Anne S. Jordan Duly Authorized PEOPLESOFT, INC., a Delaware corporation By: /s/ Anne S. Jordan ------------------------------ Name: Anne S. Jordan Duly Authorized SELCO SERVICE CORPORATION, an Ohio corporation By: /s/ Donald C. Davis ------------------------------ Name: Donald C. Davis Duly Authorized 5 The following party hereby acknowledges the foregoing Agreement and the terms thereof: KEYBANK NATIONAL ASSOCIATION, individually and as agent By: /s/ Thomas A. Crandell ----------------------------- Name: Thomas A. Crandell Title: Senior Vice President [notary acknowledgements omitted] 6 EX-10.4 7 f94551exv10w4.txt EXHIBIT 10.4 \ EXHIBIT 10.4 PHASE IV ASSIGNMENT AND ASSUMPTION OF SECURITY DOCUMENTS, AMENDMENT TO MEMORANDUM OF LEASE (INCLUDING LEASE SUPPLEMENT NO. 1) AND AMENDMENT TO MEMORANDUM OF GROUND LEASE This Assignment and Assumption of Security Documents, Amendment to Memorandum of Lease (including Lease Supplement No. 1) and Amendment to Memorandum of Ground Lease ("Agreement") is made as of the 30th day of September, 2003 by and among J.D. Edwards & Company, LLC, a Delaware limited liability company ("JDE LLC"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft") and Selco Service Corporation, an Ohio Corporation ("Selco"). I Background 1. On August 29, 2003, Jersey Acquisition Corporation, a Delaware corporation, merged with and into J.D. Edwards & Company, a Delaware corporation ("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter, J.D. Edwards merged with and into JDE LLC, which is wholly owned by PeopleSoft, with JDE LLC being the surviving entity. 2. Selco and JDE LLC, as successor-in-interest to J.D. Edwards, are parties to that certain Off-Balance Sheet Lease Financing for J.D. Edwards & Company for the Acquisition and Construction of a Fourth Headquarters Building in Denver, Colorado (original closing date of November 10, 1998) ("Phase IV Financing"). 3. For purposes of this Agreement the term "Phase IV Financing Documents" shall mean all documents, instruments or agreements evidencing, securing or otherwise related to the Phase IV Financing, or creating or securing obligations of JDE LLC under the Phase IV Financing, including any amendments, modifications, renewals, increases, replacements or extensions thereof; including without limitation, all of the following documents, instruments or agreements that were recorded in the land records of Denver County, Colorado: (i) Ground Lease dated November 10, 1998 between JDE LLC and Selco; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101 ("Phase IV Ground Lease"); (ii) Master Lease Agreement dated as of November 10, 1998 by and between Selco, as owner-lessor, and JDE LLC, as lessee, together with Lease Supplement No. 1 dated as of November 10, 1998; as amended by First Amendment to Master Lease Agreement and other Transaction 1 Documents dated February 22, 1999; as further amended by Amendment to Master Lease dated July 9, 1999; as further amended by Amendment No. 2 to Master Lease Agreement dated November 12, 1999; as further amended by Amendment to Definitions Appendix dated as of August 31, 2000; and as further amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101 (collectively, the Phase IV Master Lease"); (iii) Memorandum of Ground Lease dated as of November 10, 1998 by and between JDE LLC and Selco and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188464; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101 (collectively, the "Phase IV Memorandum of Ground Lease"); (iv) Memorandum of Lease (including Lease Supplement No. 1) dated as of November 10, 1998 by and between JDE LLC and Selco and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188465; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101 (collectively, the "Phase IV Memorandum of Lease"); (v) Deed of Trust, Security Agreement and Fixture Financing Statement dated as of November 10, 1998 from JDE LLC to the Public Trustee in and for the City and County of Denver, Colorado, for the benefit of Selco, and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188463; as affected by Request to Release of Deed of Trust and Release recorded in the land records of Denver, Colorado on July 31, 2001 under Reception No. 2001125369 (collectively, the "Phase IV Deed of Trust"); (vi) Lessee Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated as of November 10, 1998 from JDE LLC to Selco and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188470; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; (vii) Recognition, Non-Disturbance and Attornment Agreement dated as of November 10, 1998 by and between JDE LLC and KeyBank National Association, a national banking association, as Agent for itself and other Lenders, and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188471; as amended by 2 Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101; and (viii) Subordination and Agreement Relative to Owner Deed of Trust dated as of November 10, 1998 from JDE LLC in favor of Selco and KeyBank National Association, a national banking association, as Agent for the Lenders and recorded in the land records of Denver, Colorado on November 10, 1998 under Reception No. 9800188466; as amended by Amendment of Ground Lease, Master Lease and Other Documents recorded in the land records of Denver, Colorado on July 11, 2001 under Reception No. 2001113101. 4. On this date, JDE LLC has assigned to PeopleSoft and PeopleSoft has assumed from JDE LLC all of JDE LLC's rights and interest under the Phase IV Ground Lease, the Phase IV Master Lease, and the other Phase IV Financing Documents. 5. On this date, PeopleSoft has assumed, all of JDE LLC's obligations and liabilities under the Phase IV Ground Lease, the Phase IV Master Lease and the other Phase IV Financing Documents, while JDE LLC also remains primarily liable thereunder as a principal and not as a surety. 6. Selco, JDE LLC, PeopleSoft desire to enter into this Agreement for purposes of confirming, evidencing and effectuating such assignment and assumption. Now, therefore, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft hereby agree as follows: (i) Assignment. JDE LLC hereby transfers, assigns and conveys to PeopleSoft all of JDE LLC's rights and interest in and to the Phase IV Financing Documents, including without limitation, all of JDE LLC's rights and interests under the Phase IV Ground Lease and the Phase IV Master Lease. Notwithstanding anything to the contrary herein, JDE LLC shall remain primarily liable under the Phase IV Financing Documents (as a principal and not as a surety). (ii) Assumption. PeopleSoft hereby accepts and assumes all such rights and interests assigned to it above and also hereby accepts and assumes all past, current liabilities and obligations, and joins in all representations, warranties and indemnities of JDE LLC, under the Phase IV Financing Documents, including without limitation, all liabilities and obligations under the Phase IV Deed of Trust. Notwithstanding anything to the contrary herein, the parties hereto agree and acknowledge that nothing set forth in this Agreement or in any of the other documents executed in connection herewith shall constitute a release of JDE LLC from any of its liabilities or obligations under the Phase IV Financing Documents, and 3 that JDE LLC and PeopleSoft each shall be primarily liable thereunder as principals and not as sureties. (iii) JDE LLC has granted, conveyed, transferred, delivered, assigned and set over unto the Public Trustee in and for the City and County of Denver, Colorado as Trustee for the benefit of Selco, the property described in the Phase IV Deed of Trust. PeopleSoft hereby ratifies and confirms such grant, conveyance, transfer, delivery, assignment and setting over. (iv) As of the date of this Agreement, all references in the Phase IV Financing Documents to J.D. Edwards or JDE LLC, or other terms used therein which refer to J.D. Edwards or JDE LLC, shall be deemed to mean and refer to PeopleSoft. (v) The term "Lessee," as set forth in the Phase IV Memorandum of Lease, shall mean PeopleSoft. (vi) The term "Ground Landlord," as set forth in the Phase IV Memorandum of Ground Lease, shall mean PeopleSoft. (vii) Except as herein affected, the Phase IV Financing Documents and all covenants, agreements, terms and conditions thereof shall remain and continue in full force and effect and are hereby in all respects ratified and confirmed. (viii) The covenants, agreements, terms and conditions of this Agreement shall bind and inure to the benefit to the parties hereto and their respective permitted successors and assigns. (ix) This Agreement shall not be changed orally, but only by writing signed by the parties against whom enforcement thereof is sought. 4 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. J.D. EDWARDS & COMPANY, LLC, a Delaware limited liability company By: /s/ Anne S. Jordan ------------------------------ Name: Anne S. Jordan Duly Authorized PEOPLESOFT, INC., a Delaware corporation By: /s/ Anne S. Jordan ------------------------------- Name: Anne S. Jordan Duly Authorized SELCO SERVICE CORPORATION, an Ohio corporation By: /s/ Donald C. Davis ------------------------------ Name: Donald C. Davis Duly Authorized 5 The following party hereby acknowledges the foregoing Agreement and the terms thereof: KEYBANK NATIONAL ASSOCIATION, individually and as agent By: /s/ Thomas A. Crandell ------------------------------ Name: Thomas A. Crandell Title: Senior Vice President [notary acknowledgements omitted] 6 EX-10.5 8 f94551exv10w5.txt EXHIBIT 10.5 Phase I EXHIBIT 10.5 SECOND AMENDMENT TO DEFINITIONS APPENDIX This Second Amendment to Definitions Appendix ("Second Amendment") is made as of the 30th day of September, 2003 by and among SELCO Service Corporation, an Ohio corporation, ("SELCO"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft"), and KeyBank National Association, a national banking association, ("KeyBank"). Reference is made to that certain Definitions Appendix, as amended (collectively, the "Definitions Appendix") attached as Annex A to or referred to or incorporated by reference by (i) that certain Master Lease Agreement dated as of August 26, 1998, as amended (the "Master Lease") by and between SELCO, as Owner-Lessor, and PeopleSoft, as Lessee; (ii) that certain Loan Agreement dated as of August 26, 1998, as amended (the "Loan Agreement") by and among SELCO, as Borrower, various financial institutions (collectively, "Lenders"), and KeyBank, as Agent for the Lenders; and (iii) certain other Transaction Documents (as defined in the Definitions Appendix). WHEREAS, the parties wish to amend the Definitions Appendix as more particularly set forth below. NOW, THEREFORE, in consideration of the promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Definitions Appendix. 2.Effective as of September 23, 2003, the definition of "Fiscal Quarter" set forth in the Definitions Appendix shall be amended to read as follows: ""Fiscal Quarter" shall mean (a) until April 30, 2003, the three month period beginning as of each November 1, February 1, May 1 and August 1; (b) from May 1, 2003 to and including September 30, 2003, the period from May 1, 2003 to and including September 30, 2003; and (c) after September 30, 2003, the three month period beginning as of each October 1, January 1, April 1 and July 1." 3.Effective as of the date hereof, the Definitions Appendix is hereby amended by deleting the definition of "Marketable Securities" therein in its entirety and inserting the following in lieu thereof: ""Marketable Securities" shall have the meaning given to such term under GAAP." 4. Except as herein specifically amended, the Definitions Appendix and the other Transaction Documents shall remain and continue in full force and effect in accordance with their terms and are hereby in all respects ratified and confirmed. Second Amendment to Definitions Appendix (Phase I) 1 Phase I 5.The covenants, agreements, terms and conditions of this Second Amendment shall bind and inure to the benefit of the parties hereto and their respective successors. 6. This Second Amendment shall not be changed orally, but only by a writing signed by the party against whom enforcement thereof is sought. 7. This Second Amendment may be executed in one or more counterparts, which collectively will constitute only one instrument. Second Amendment to Definitions Appendix (Phase I) 2 Phase I WITNESS our hands and seal as of the date first above written KEYBANK NATIONAL ASSOCIATION SELCO SERVICE CORPORATION as Lender and as Agent By: /s/ Thomas A. Crandell By: /s/ Donald C. Davis ------------------------------------- ------------------------------ Name: Thomas A. Crandell Name: Donald C. Davis Title: Senior Vice President Title: Vice President PEOPLESOFT, INC. By: /s/ Anne S. Jordan ------------------------------------- Name: Anne S. Jordan Title: Senior Vice President, General Counsel and Secretary Second Amendment to Definitions Appendix (Phase I) 3 EX-10.6 9 f94551exv10w6.txt EXHIBIT 10.6 Phase II/III EXHIBIT 10.6 SECOND AMENDMENT TO DEFINITIONS APPENDIX This Second Amendment to Definitions Appendix ("Second Amendment") is made as of the 30th day of September, 2003 by and among SELCO Service Corporation, an Ohio corporation, ("SELCO"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft"), and KeyBank National Association, a national banking association, ("KeyBank"). Reference is made to that certain Definitions Appendix, as amended (collectively, the "Definitions Appendix") attached as Annex A to or referred to or incorporated by reference by (i) that certain Master Lease Agreement dated as of November 15, 1997, as amended (the "Master Lease") by and between SELCO, as Owner-Lessor, and PeopleSoft, as Lessee; (ii) that certain Construction and Term Loan Agreement dated as of November 15, 1997, as amended (the "Loan Agreement") by and among SELCO, as Borrower,, and KeyBank, as Lender; and (iii) certain other Transaction Documents (as defined in the Definitions Appendix). WHEREAS, the parties wish to amend the Definitions Appendix as more particularly set forth below. NOW, THEREFORE, in consideration of the promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Definitions Appendix. 2. Effective as of September 23, 2003, the definition of "Fiscal Quarter" set forth in the Definitions Appendix shall be amended to read as follows: ""Fiscal Quarter" shall mean (a) until April 30, 2003, the three month period beginning as of each November 1, February 1, May 1 and August 1; (b) from May 1, 2003 to and including September 30, 2003, the period from May 1, 2003 to and including September 30, 2003; and (c) after September 30, 2003, the three month period beginning as of each October 1, January 1, April 1 and July 1." 3. Effective as of the date hereof, the Definitions Appendix is hereby amended by deleting the definition of "Marketable Securities" therein in its entirety and inserting the following in lieu thereof: ""Marketable Securities" shall have the meaning given to such term under GAAP." 4. Except as herein specifically amended, the Definitions Appendix and the other Transaction Documents shall remain and continue in full force and effect in accordance with their terms and are hereby in all respects ratified and confirmed. Second Amendment to Definitions Appendix (Phase II/III) 1 Phase II/III 5. The covenants, agreements, terms and conditions of this Second Amendment shall bind and inure to the benefit of the parties hereto and their respective successors. 6. This Second Amendment shall not be changed orally, but only by a writing signed by the party against whom enforcement thereof is sought. 7. This Second Amendment may be executed in one or more counterparts, which collectively will constitute only one instrument. Second Amendment to Definitions Appendix (Phase II/III) 2 Phase II/III WITNESS our hands and seal as of the date first above written KEYBANK NATIONAL ASSOCIATION SELCO SERVICE CORPORATION as Lender and as Agent By: /s/ Thomas A. Crandell By: /s/ Donald C. Davis -------------------------------------- ------------------------------ Name: Thomas A. Crandell Name: Donald C. Davis Title: Senior Vice President Title: Vice President PEOPLESOFT, INC. By: /s/ Anne S. Jordan -------------------------------------- Name: Anne S. Jordan Title: Senior Vice President, General Counsel and Secretary Second Amendment to Definitions Appendix (Phase II/III) 3 EX-10.7 10 f94551exv10w7.txt EXHIBIT 10.7 Phase IV EXHIBIT 10.7 SECOND AMENDMENT TO DEFINITIONS APPENDIX This Second Amendment to Definitions Appendix ("Second Amendment") is made as of the 30th day of September, 2003 by and among SELCO Service Corporation, an Ohio corporation, ("SELCO"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft"), and KeyBank National Association, a national banking association, ("KeyBank"). Reference is made to that certain Definitions Appendix, as amended (collectively, the "Definitions Appendix") attached as Annex A to or referred to or incorporated by reference by (i) that certain Master Lease Agreement dated as of November 10, 1998, as amended (the "Master Lease") by and between SELCO, as Owner-Lessor, and PeopleSoft, as Lessee; (ii) that certain Loan Agreement dated as of November 10, 1998, as amended (the "Loan Agreement") by and among SELCO, as Borrower, various financial institutions (collectively, "Lenders"), and KeyBank, as Agent for the Lenders; and (iii) certain other Transaction Documents (as defined in the Definitions Appendix). WHEREAS, the parties wish to amend the Definitions Appendix as more particularly set forth below. NOW, THEREFORE, in consideration of the promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Definitions Appendix. 2. Effective as of September 23, 2003, the definition of "Fiscal Quarter" set forth in the Definitions Appendix shall be amended to read as follows: ""Fiscal Quarter" shall mean (a) until April 30, 2003, the three month period beginning as of each November 1, February 1, May 1 and August 1; (b) from May 1, 2003 to and including September 30, 2003, the period from May 1, 2003 to and including September 30, 2003; and (c) after September 30, 2003, the three month period beginning as of each October 1, January 1, April 1 and July 1." 3. Effective as of the date hereof, the Definitions Appendix is hereby amended by deleting the definition of "Marketable Securities" therein in its entirety and inserting the following in lieu thereof: ""Marketable Securities" shall have the meaning given to such term under GAAP." 4. Except as herein specifically amended, the Definitions Appendix and the other Transaction Documents shall remain and continue in full force and effect in accordance with their terms and are hereby in all respects ratified and confirmed. Second Amendment to Definitions Appendix (Phase IV) 1 Phase IV 5. The covenants, agreements, terms and conditions of this Second Amendment shall bind and inure to the benefit of the parties hereto and their respective successors. 6. This Second Amendment shall not be changed orally, but only by a writing signed by the party against whom enforcement thereof is sought. 7. This Second Amendment may be executed in one or more counterparts, which collectively will constitute only one instrument. Second Amendment to Definitions Appendix (Phase IV) 2 Phase IV WITNESS our hands and seal as of the date first above written KEYBANK NATIONAL ASSOCIATION SELCO SERVICE CORPORATION as Lender and as Agent By: /s/ Thomas A. Crandell By: /s/ Donald C. Davis ------------------------------- ------------------------------ Name: Thomas A. Crandell Name: Donald C. Davis Title: Senior Vice President Title: Vice President PEOPLESOFT, INC. By: /s/ Anne S. Jordan ------------------------------------ Name: Anne S. Jordan Title: Senior Vice President, General Counsel and Secretary Second Amendment to Definitions Appendix (Phase IV) 3 EX-31.1 11 f94551exv31w1.txt EXHIBIT 31.1 Exhibit 31.1 CERTIFICATION I, Craig A. Conway, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for PeopleSoft, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 13, 2003 /s/ Craig A. Conway --------------------------- Craig A. Conway President and Chief Executive Officer PeopleSoft, Inc. EX-31.2 12 f94551exv31w2.txt EXHIBIT 31.2 Exhibit 31.2 CERTIFICATION I, Kevin T. Parker, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for PeopleSoft, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 13, 2003 /s/ Kevin T. Parker ----------------------------- Kevin T. Parker Executive Vice President Finance and Administration, Chief Financial Officer PeopleSoft, Inc. EX-32.1 13 f94551exv32w1.txt EXHIBIT 32.1 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Each of the undersigned hereby certifies, in his capacity as an officer of PeopleSoft, Inc. (the "Company"), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge: - the Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2003 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and - the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company. Dated: November 13, 2003 /s/ CRAIG A. CONWAY - ------------------------- Craig A. Conway President and Chief Executive Officer PeopleSoft, Inc. /s/ KEVIN T. PARKER - ------------------------ Kevin T. Parker Executive Vice President, Finance and Administration, Chief Financial Officer PeopleSoft, Inc. -----END PRIVACY-ENHANCED MESSAGE-----

EX-3.2

                                                                     EXHIBIT 3.2

                                     BYLAWS

                                       OF

                                PEOPLESOFT, INC.
                                ----------------
                (As Amended and Restated as of November 5, 2003)

                                     -i-



TABLE OF CONTENTS

                                                                                   
ARTICLE I..........................................................................    1

   CORPORATE OFFICES...............................................................    1
      1.1      REGISTERED OFFICE...................................................    1
      1.2      OTHER OFFICES.......................................................    1

ARTICLE II.........................................................................    1

   MEETINGS OF STOCKHOLDERS........................................................    1
      2.1      PLACE OF MEETINGS...................................................    1
      2.2      ANNUAL MEETING......................................................    2
      2.3      SPECIAL MEETING.....................................................    2
      2.4      NOTICE OF STOCKHOLDERS' MEETINGS....................................    2
      2.5      MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE........................    2
      2.6      QUORUM..............................................................    3
      2.7      ADJOURNED MEETING; NOTICE...........................................    3
      2.8      CONDUCT OF BUSINESS.................................................    3
      2.9      VOTING..............................................................    4
      2.10     WAIVER OF NOTICE....................................................    4
      2.11     STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.............    4
      2.12     RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.........    5
      2.13     PROXIES.............................................................    5
      2.14     LIST OF STOCKHOLDERS ENTITLED TO VOTE...............................    6
      2.15     ADVANCE NOTICE OF STOCKHOLDER NOMINEES..............................    6
      2.16     ADVANCE NOTICE OF STOCKHOLDER BUSINESS..............................    7

ARTICLE III........................................................................    8

   DIRECTORS.......................................................................    8
      3.1      POWERS..............................................................    8
      3.2      NUMBER OF DIRECTORS.................................................    8
      3.3      ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.............    9
      3.4      RESIGNATION AND VACANCIES...........................................    9
      3.5      PLACE OF MEETINGS; MEETINGS BY TELEPHONE............................   10
      3.6      REGULAR MEETINGS....................................................   10
      3.7      SPECIAL MEETINGS; NOTICE............................................   10
      3.8      QUORUM..............................................................   11
      3.9      WAIVER OF NOTICE....................................................   11
      3.10     BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING...................   11
      3.11     FEES AND COMPENSATION OF DIRECTORS..................................   12
      3.12     REMOVAL OF DIRECTORS................................................   12

ARTICLE IV.........................................................................   12

   COMMITTEES......................................................................   12
      4.1      COMMITTEES OF DIRECTORS.............................................   12
      4.2      COMMITTEE MINUTES...................................................   13



                                      -ii-



                                                                                   
      4.3      MEETINGS AND ACTION OF COMMITTEES...................................   13

ARTICLE V..........................................................................   14

   OFFICERS........................................................................   14
      5.1      OFFICERS............................................................   14
      5.2      APPOINTMENT OF OFFICERS.............................................   14
      5.3      SUBORDINATE OFFICERS................................................   15
      5.4      REMOVAL AND RESIGNATION OF OFFICERS.................................   15
      5.5      VACANCIES IN OFFICES................................................   15
      5.6      CHAIRMAN OF THE BOARD...............................................   15
      5.7      PRESIDENT...........................................................   16
      5.8      VICE PRESIDENTS.....................................................   16
      5.9      SECRETARY...........................................................   16
      5.10     CHIEF FINANCIAL OFFICER.............................................   17
      5.11     ASSISTANT SECRETARY.................................................   17
      5.12     ASSISTANT TREASURER.................................................   17
      5.13     REPRESENTATION OF SHARES OF OTHER CORPORATIONS......................   18
      5.14     AUTHORITY AND DUTIES OF OFFICERS....................................   18

ARTICLE VI.........................................................................   18

   INDEMNITY.......................................................................   18
      6.1      THIRD PARTY ACTIONS.................................................   18
      6.2      ACTIONS BY OR IN THE RIGHT OF THE CORPORATION.......................   19
      6.3      SUCCESSFUL DEFENSE..................................................   19
      6.4      DETERMINATION OF CONDUCT............................................   19
      6.5      PAYMENT OF EXPENSES IN ADVANCE......................................   20
      6.6      INDEMNITY NOT EXCLUSIVE.............................................   20
      6.7      INSURANCE INDEMNIFICATION...........................................   20
      6.8      THE CORPORATION.....................................................   20
      6.9      EMPLOYEE BENEFIT PLANS..............................................   21
      6.10     CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.........   21

ARTICLE VII........................................................................   21

   RECORDS AND REPORTS.............................................................   21
      7.1      MAINTENANCE AND INSPECTION OF RECORDS...............................   21
      7.2      INSPECTION BY DIRECTORS.............................................   22
      7.3      ANNUAL STATEMENT TO STOCKHOLDERS....................................   22

ARTICLE VIII.......................................................................   23

   GENERAL MATTERS.................................................................   23
      8.1      CHECKS..............................................................   23
      8.2      EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS....................   23
      8.3      STOCK CERTIFICATES; PARTLY PAID SHARES..............................   23
      8.4      SPECIAL DESIGNATION ON CERTIFICATES.................................   24
      8.5      LOST CERTIFICATES...................................................   24



                                     -iii-



                                                                                   
      8.6      CONSTRUCTION; DEFINITIONS...........................................   24
      8.7      DIVIDENDS...........................................................   25
      8.8      FISCAL YEAR.........................................................   25
      8.9      SEAL................................................................   25
      8.10     TRANSFER OF STOCK...................................................   25
      8.11     STOCK TRANSFER AGREEMENTS...........................................   25
      8.12     REGISTERED STOCKHOLDERS.............................................   26

ARTICLE IX.........................................................................   26

   AMENDMENTS......................................................................   26



                                      -iv-



                                     BYLAWS

                                       OF

                                PEOPLESOFT, INC.
                (As Amended and Restated as of November 5, 2003)

                                    ARTICLE I

                                CORPORATE OFFICES

         1.1      REGISTERED OFFICE

         The registered office of the corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The name of the registered
agent of the corporation at such location is The Corporation Trust Company.

         1.2      OTHER OFFICES

         The board of directors may at any time establish other offices at any
place or places where the corporation is qualified to do business.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

         2.1      PLACE OF MEETINGS

         Meetings of stockholders shall be held at any place, within or outside
the State of Delaware, designated by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the registered
office of the corporation.

         The board of directors may, in its sole discretion, determine that any
such meeting shall not be held at any place, but may instead be held solely by
means of remote communication in accordance with Section 211(a)(2) of the
General Corporation Law of Delaware. If authorized by the board of directors in
its sole discretion, and subject to such guidelines and procedures as the board
of directors may adopt, stockholders and proxyholders not physically present at
a meeting of stockholders may, by means of remote communication (a) participate
in a meeting of stockholders,

                                      -1-



and (b) be deemed present in person and vote at a meeting of stockholders
whether such meeting is to be held at a designated place or solely by means of
remote communication, provided that (i) the corporation shall implement
reasonable measures to verify that each person deemed present and permitted to
vote at the meeting by means of remote communication is a stockholder or
proxyholder, (ii) the corporation shall implement reasonable measures to provide
such stockholders and proxyholders a reasonable opportunity to participate in
the meeting and to vote on matters submitted to the stockholders, including an
opportunity to read or hear the proceedings of the meeting substantially
concurrently with such proceedings, and (iii) if any stockholder or proxyholder
votes or takes other action at the meeting by means of remote communication, a
record of such vote or other action shall be maintained by the corporation.

         2.2      ANNUAL MEETING

         The annual meeting of stockholders shall be held each year on a date
and at a time designated by the board of directors. At the meeting, directors
shall be elected and any other proper business may be transacted.

         2.3      SPECIAL MEETING

         A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president. No
other person or persons are permitted to call a special meeting. No business may
be conducted at a special meeting other than the business brought before the
meeting by the board of directors or the chairman of the board or the president.

         2.4      NOTICE OF STOCKHOLDERS' MEETINGS

         All notices of meetings with stockholders shall be in writing and shall
be sent or otherwise given in accordance with these bylaws not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. The notice shall specify the
place, if any, the date and hour of the meeting, the means of remote
communication, if any, by which the stockholders or proxyholders may be deemed
to be present in person and vote at such meeting, and, in the case of a special
meeting, the purpose or purposes for which the meeting is called.

         2.5      MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE

         Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's post office or street address as it appears on
the records of the corporation, and if transmitted by electronic means, is given
when such electronic transmission is transmitted to the stockholder at such
stockholder's electronic mail address as it appears on the records of the
corporation. An affidavit of the secretary

                                      -2-



or an assistant secretary or of the transfer agent or other agent of the
corporation that the notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. Notice shall be deemed to have
been given to all stockholders of record who share a post office or street or
electronic mail address if notice is given in accordance with the "householding"
rules set forth in Rule 14a-3(e) under the Securities Exchange Act of 1934, as
amended ("Exchange Act").

         2.6      QUORUM

         The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum is not present or represented at any
meeting of the stockholders, then either (i) the chairman of the meeting or (ii)
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum is present or
represented. At such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed.

         2.7      ADJOURNED MEETING; NOTICE

         When a meeting is adjourned to another time or place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place, if any, thereof, and the means of remote communications, if
any, by which stockholders and proxyholders may be deemed to be present in
person and vote at such adjourned meeting, are announced at the meeting at which
the adjournment is taken. At the adjourned meeting the corporation may transact
any business that might have been transacted at the original meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting in the manner set forth in Section 2.5.

         2.8      CONDUCT OF BUSINESS

         The chairman of any meeting of stockholders shall determine the order
of business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of business.

         The board of directors of the corporation shall be entitled to make
such rules or regulations for the conduct of meetings of stockholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the board of directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
for the proper conduct of the meeting, including, without limitation:
establishing an agenda or order of business for

                                      -3-



the meeting; rules and procedures for maintaining order at the meeting and the
safety of those present; limitations on participation in such meeting to
stockholders of record and others as the chairman shall permit; restrictions on
entry to the meeting after the time fixed for the commencement thereof;
limitations on the time allotted to questions or comments by participants; and
regulation of the opening and closing of the polls for balloting and matters
which are to be voted on by ballot. Unless and to the extent determined by the
board of directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with the rules of parliamentary
procedure.

         2.9      VOTING

         The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.12 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners
of stock and to voting trusts and other voting agreements).

         Except as may be otherwise provided in the certificate of
incorporation, each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder.

         2.10     WAIVER OF NOTICE

         Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to notice
or a waiver by electronic transmission by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice or any waiver by
electronic transmission unless so required by the certificate of incorporation
or these bylaws.

         2.11     STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING

         Unless otherwise provided in the certificate of incorporation, any
action required by this chapter to be taken at any annual or special meeting of
stockholders of a corporation, or any action that may be taken at any annual or
special meeting of such stockholders, may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.

                                      -4-



         Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the General
Corporation Law of Delaware if such action had been voted on by stockholders at
a meeting thereof, then the certificate filed under such section shall state, in
lieu of any statement required by such section concerning any vote of
stockholders, that written notice and written consent have been given as
provided in Section 228 of the General Corporation Law of Delaware.

         2.12     RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS

         In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.

         If the board of directors does not so fix a record date:

         (i)      The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held.

         (ii)     The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.

         A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.

         2.13     PROXIES

         Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by a written
proxy, signed by the stockholder and filed with the secretary of the
corporation, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless the proxy provides for a longer period. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy (whether
by manual signature, typewriting, telegraphic transmission or otherwise) by the
stockholder or the stockholder's attorney-in-fact. The revocability of a proxy
that

                                      -5-



states on its face that it is irrevocable shall be governed by the provisions of
Section 212(c) of the General Corporation Law of Delaware.

         2.14     LIST OF STOCKHOLDERS ENTITLED TO VOTE

         The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the post office or street address, or electronic
mail address if applicable, of each stockholder and the number of shares
registered in the name of each stockholder. Nothing contained in this Section
shall require the corporation to include electronic mail addresses or other
electronic contact information on such list. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, for a
period of at least ten (10) days prior to the meeting: (i) on a reasonably
accessible electronic network, provided that the information required to gain
access to such list is provided with the notice of the meeting, or (ii) during
ordinary business hours, at the principal place of business of the corporation.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. Such list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them. In the event that the corporation determines to make the list
available on an electronic network, the corporation may take reasonable steps to
ensure that such information is available only to stockholders of the
corporation. If the meeting is to be held at a place, the list shall be produced
and kept at the time and place of the meeting during the whole time thereof and
may be inspected by any stockholder who is present. If the meeting is to be held
solely by means of remote communication, the list shall also be open to the
examination of any stockholder during the whole time of the meeting on a
reasonably accessible electronic network, and the information required to access
such list shall be provided with the notice of the meeting.

         2.15     ADVANCE NOTICE OF STOCKHOLDER NOMINEES

                  Nominations of persons for election to the board of directors
         of the corporation may be made at a meeting of stockholders by or at
         the discretion of the board of directors or by any stockholder of the
         corporation entitled to vote in the election of directors at the
         meeting who complies with the notice procedures set forth in this
         Section. Such nominations, other than those made by or at the direction
         of the board of directors, shall be made pursuant to timely notice in
         writing to the secretary of the corporation. To be timely, a
         stockholder's notice with respect to an annual meeting of stockholders
         shall be delivered to or mailed and received at the principal executive
         offices of the corporation:

                  -   not less than one hundred twenty (120) days nor more than
                      one hundred eighty (180) days prior to the anniversary of
                      the preceding annual meeting of stockholders;

                                      -6-



                  -   in the event the date of the meeting is more than thirty
                      (30) days prior to or after such anniversary, notice by
                      the stockholder shall be timely if so received not later
                      than the close of business on the twentieth (20th) day
                      following the day on which the date of the meeting is
                      first publicly disclosed, if such twentieth day is less
                      than one hundred twenty (120) days prior to the date of
                      the meeting.

                  -   With respect to the election of directors at any special
                      meeting of stockholders, to be timely a stockholder's
                      notice shall be so received not less than one hundred
                      twenty (120) days nor more than one hundred eighty (180)
                      days prior to the date of the meeting; provided that in
                      the event the date of the meeting is first publicly
                      disclosed less than one hundred forty (140) days prior to
                      the date of the meeting, notice by the stockholder shall
                      be timely if so received not less than the close of
                      business on the twentieth (20th) day following the day on
                      which the date of the meeting is first publicly disclosed.

         Such stockholder's notice shall set forth (a) as to each person, if
         any, whom the stockholder proposes to nominate for election or
         re-election as a director: (i) the name, age, business address and
         residence address of such person, (ii) the principal occupation or
         employment of such person, (iii) the class and number of shares of the
         corporation which are beneficially owned by such person, (iv) a
         description of all arrangements or understandings between the
         stockholder and each nominee and any other person or persons (naming
         such person or persons) pursuant to which the nominations are to be
         made by the stockholder, (v) any other information relating to such
         person that is required by law to be disclosed in solicitations of
         proxies for elections of directors, and (vi) such person's written
         consent to being named a nominee and to serving as a director if
         elected; and (b) as to the stockholder giving the notice: (i) the name
         and address, as they appear on the corporation's books, of such
         stockholder, and (ii) the class and number of shares of the corporation
         which are beneficially owned by such stockholder. At the request of the
         board of directors any person nominated by the board for election as a
         director shall confirm in writing to the secretary of the corporation
         the information set forth in the stockholder's notice of nomination
         which pertains to the nominee. No person shall be eligible for election
         as a director of the corporation unless nominated in accordance with
         the procedures set forth in this Section. The chairman of the meeting
         shall, if the facts warrant, determine and declare at the meeting that
         a nomination was not made in accordance with the procedures prescribed
         by these bylaws, and if he should so determine, he shall so declare at
         the meeting and the defective nomination shall be disregarded.

         2.16     ADVANCE NOTICE OF STOCKHOLDER BUSINESS

         At the annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be: (a) as specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the board of directors, (b) otherwise properly brought before the meeting by or
at the direction of the board of directors, or (c) otherwise properly brought
before the meeting by a stockholder. Business to be brought before the meeting
by a stockholder shall not be considered

                                      -7-



properly brought if the stockholder has not given timely notice thereof in
writing to the secretary of the corporation. To be timely, a stockholder's
notice must be delivered to the principal executive offices of the corporation
not less than forty-five (45) days prior to the date on which the corporation
first mailed proxy materials for the prior year's annual meeting; provided,
however, that if the corporation's annual meeting of stockholders occurs on a
date more than thirty (30) days earlier or later than the corporation's prior
year's annual meeting, then the corporation's board of directors shall determine
a date a reasonable period prior to the corporation's annual meeting of
stockholders by which date the stockholder's notice must be delivered and
publicize such date in a filing pursuant to the Securities Exchange Act of 1934,
as amended, or via press release. Such publication shall occur at least ten (10)
days prior to the date set by the board of directors. A stockholder's notice to
the secretary shall set forth as to each matter the stockholder proposes to
bring before the annual meeting: (i) a brief description of the business desired
to be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address of the stockholder
proposing such business, (iii) the class and number of shares of the
corporation, which are beneficially owned by the stockholder, (iv) any material
interest of the stockholder in such business, and (v) any other information that
is required by law to be provided by the stockholder in his capacity as
proponent of a stockholder proposal. Notwithstanding anything in these bylaws to
the contrary, no business shall be conducted at any annual meeting except in
accordance with the procedures set forth in this Section. The chairman of the
annual meeting shall, if the facts warrant, determine and declare at the meeting
that business was not properly brought before the meeting and in accordance with
the provisions of this Section, and, if he should so determine, he shall so
declare at the meeting that any such business not properly brought before the
meeting shall not be transacted.

                                   ARTICLE III

                                    DIRECTORS

         3.1      POWERS

         Subject to the provisions of the General Corporation Law of Delaware
and any limitations in the certificate of incorporation or these bylaws relating
to action required to be approved by the stockholders or by the outstanding
shares, the business and affairs of the corporation shall be managed and all
corporate powers shall be exercised by or under the direction of the board of
directors.

         3.2      NUMBER OF DIRECTORS

         The Board of Directors shall consist of eight (8) persons until changed
by a proper amendment of this Section 3.2.

                                      -8-



         No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.

         3.3      ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS

         Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting unless specified otherwise in the certificate of incorporation.
Directors need not be stockholders unless so required by the certificate of
incorporation or these bylaws, wherein other qualifications for directors may be
prescribed. Each director, including a director elected to fill a vacancy, shall
hold office until his or her successor is elected and qualified or until his or
her earlier resignation or removal.

         Elections of directors need not be by written ballot.

         3.4      RESIGNATION AND VACANCIES

         Any director may resign at any time upon notice given in writing or by
electronic transmission to the secretary of the corporation. When one or more
directors so resigns and the resignation is effective at a future date, a
majority of the directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective, and each
director so chosen shall hold office as provided in this section in the filling
of other vacancies.

         Unless otherwise provided in the certificate of incorporation or these
bylaws:

         (i) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.

         (ii) Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the provisions of the
certificate of incorporation, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of the directors elected
by such class or classes or series thereof then in office, or by a sole
remaining director so elected.

         If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree

                                      -9-



summarily ordering an election as provided in Section 211 of the General
Corporation Law of Delaware.

         If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten (10) percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as aforesaid,
which election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.

         3.5      PLACE OF MEETINGS; MEETINGS BY TELEPHONE

         The board of directors of the corporation may hold meetings, both
regular and special, either within or outside the State of Delaware.

         Unless otherwise restricted by the certificate of incorporation or
these bylaws, members of the board of directors, or any committee designated by
the board of directors, may participate in a meeting of the board of directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.

         3.6      REGULAR MEETINGS

         Regular meetings of the board of directors may be held without notice
at such time and at such place as shall from time to time be determined by the
board.

         3.7      SPECIAL MEETINGS; NOTICE

         Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two (2) directors.

         Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, or by electronic transmission, addressed to each
director at that director's post office or street address, or electronic mail
address if applicable, as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone, by telegram, or by electronic
transmission, it shall be delivered personally or by telephone or to the
telegraph company or by

                                      -10-



electronic transmission at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly communicate
it to the director. The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive office of the
corporation.

         3.8      QUORUM

         At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum is not present at any meeting of the board of
directors, then the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is present.

         A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.

         3.9      WAIVER OF NOTICE

         Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to notice,
or a waiver by electronic transmission by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
directors, or members of a committee of directors, need be specified in any
written waiver of notice or any waiver by electronic transmission unless so
required by the certificate of incorporation or these bylaws.

         3.10     BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING

         Unless otherwise restricted by the certificate of incorporation or
these bylaws, any action required or permitted to be taken at any meeting of the
board of directors, or of any committee thereof, may be taken without a meeting
if all members of the board or committee, as the case may be, consent thereto in
writing or by electronic transmission and the writing or writings or electronic
transmissions are filed with the minutes of proceedings of the board or
committee. Such filing shall be in paper form if the minutes are maintained in
paper form or shall be in electronic form if the

                                      -11-



minutes are maintained in electronic form.

         3.11     FEES AND COMPENSATION OF DIRECTORS

         Unless otherwise restricted by the certificate of incorporation or
these bylaws, the board of directors shall have the authority to fix the
compensation of directors.

         3.12     REMOVAL OF DIRECTORS

         Unless otherwise restricted by statute, by the certificate of
incorporation or by these bylaws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided, however,
that, so long as stockholders of the corporation are entitled to cumulative
voting, if less than the entire board is to be removed, no director may be
removed without cause if the votes cast against his or her removal would be
sufficient to elect such director if then cumulatively voted at an election of
the entire board of directors.

         No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.

                                   ARTICLE IV

                                   COMMITTEES

         4.1      COMMITTEES OF DIRECTORS

         The board of directors may, by resolution passed by a majority of the
whole board, designate one or more committees, with each committee to consist of
one or more of the directors of the corporation. The board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors or in the bylaws of the corporation, shall
have and may exercise all the powers and authority of the board of directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers that may require it; but
no such committee shall have the power or authority to (i) amend the certificate
of incorporation (except that a committee may, to the extent authorized in the
resolution or

                                      -12-



resolutions providing for the issuance of shares of stock adopted by the board
of directors as provided in Section 151(a) of the General Corporation Law of
Delaware, fix the designations and any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the corporation or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation or fix the number of shares
of any series of stock or authorize the increase or decrease of the shares of
any series), (ii) adopt an agreement of merger or consolidation under Sections
251 or 252 of the General Corporation Law of Delaware, (iii) recommend to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, (iv) recommend to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or (v) amend
the bylaws of the corporation; and, unless the board resolution establishing the
committee, the bylaws or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock, or to adopt a certificate of ownership and
merger pursuant to Section 253 of the General Corporation Law of Delaware.

         4.2      COMMITTEE MINUTES

         Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.

         4.3      MEETINGS AND ACTION OF COMMITTEES

         Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these bylaws, Section
3.5 (Place of Meetings; Meetings by Telephone), Section 3.6 (Regular Meetings),
Section 3.7 (Special Meetings; Notice), Section 3.8 (Quorum), Section 3.9
(Waiver of Notice), and Section 3.10 (Board Action by Written Consent Without a
Meeting), with such changes in the context of those bylaws as are necessary to
substitute the committee and its members for the board of directors and its
members; provided, however, that the time of regular meetings of committees may
be determined either by resolution of the board of directors or by resolution of
the committee, that special meetings of committees may also be called by
resolution of the board of directors and that notice of special meetings of
committees shall also be given to all alternate members, who shall have the
right to attend all meetings of the committee. The board of directors may adopt
rules for the government of any committee not inconsistent with the provisions
of these bylaws.

                                      -13-



                                    ARTICLE V

                                    OFFICERS

         5.1      OFFICERS

         The officers of the corporation shall be a president, a secretary and a
chief financial officer. The corporation may also have, at the discretion of the
board of directors, a chairman of the board, one or more vice presidents, one or
more assistant vice presidents, one or more assistant secretaries, one or more
assistant treasurers and any such other officers as may be appointed in
accordance with the provisions of Section 5.3 of these bylaws. Any number of
offices may be held by the same person.

         5.2      APPOINTMENT OF OFFICERS

         The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Sections 5.3 or 5.5 of these
bylaws, shall be appointed by the board of directors, subject to the rights, if
any, of an officer under any contract of employment.

                                      -14-



         5.3      SUBORDINATE OFFICERS

         The board of directors may appoint, or empower the president to
appoint, such other officers and agents as the business of the corporation may
require, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these bylaws or as the board of
directors may from time to time determine.

         5.4      REMOVAL AND RESIGNATION OF OFFICERS

         Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.

         Any officer may resign at any time by giving written notice or by
electronic transmission to the corporation. Any resignation shall take effect at
the date of the receipt of that notice or at any later time specified in that
notice; and, unless otherwise specified in that notice, the acceptance of the
resignation shall not be necessary to make it effective. Any resignation is
without prejudice to the rights, if any, of the corporation under any contract
to which the officer is a party.

         5.5      VACANCIES IN OFFICES

         Any vacancy occurring in any office of the corporation shall be filled
by the board of directors.

         5.6      CHAIRMAN OF THE BOARD

         The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these bylaws. If there is no
president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.7 of these bylaws.

                                      -15-



         5.7      PRESIDENT

         Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction, and control of the business and the officers of the corporation. The
president shall preside at all meetings of the stockholders and, in the absence
or nonexistence of a chairman of the board, at all meetings of the board of
directors. The president shall have the general powers and duties of management
usually vested in the office of president of a corporation and shall have such
other powers and duties as may be prescribed by the board of directors or these
bylaws.

         5.8      VICE PRESIDENTS

         In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or, if not
ranked, a vice president designated by the board of directors, shall perform all
the duties of the president and when so acting shall have all the powers of, and
be subject to all the restrictions upon, the president. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the board of directors, these bylaws,
the president or the chairman of the board.

         5.9      SECRETARY

         The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of
directors, committees of directors, and stockholders. The minutes shall show the
time and place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
stockholders' meetings, and the proceedings thereof.

         The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register, showing the names of
all stockholders and their post office or street addresses or electronic
addresses, if applicable, the number and classes of shares held by each, the
number and date of certificates evidencing such shares, and the number and date
of cancellation of every certificate surrendered for cancellation.

         The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law or
by these bylaws. The secretary shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such other
duties as may be prescribed by the board of directors or by these bylaws.

                                      -16-



         5.10     CHIEF FINANCIAL OFFICER

         The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any director.

         The chief financial officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositories as may be designated by the board of directors. The chief financial
officer shall disburse the funds of the corporation as may be ordered by the
board of directors, shall render to the president and directors, whenever they
request it, an account of all his or her transactions as chief financial officer
and of the financial condition of the corporation, and shall have other powers
and perform such other duties as may be prescribed by the board of directors or
these bylaws.

         The chief financial officer shall be the treasurer of the corporation.

         5.11     ASSISTANT SECRETARY

         The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as may be
prescribed by the board of directors or these bylaws.

         5.12     ASSISTANT TREASURER

         The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the chief financial officer or in the event of his or
her inability or refusal to act, perform the duties and exercise the powers of
the chief financial officer and shall perform such other duties and have such
other powers as may be prescribed by the board of directors or these bylaws.

                                      -17-



         5.13     REPRESENTATION OF SHARES OF OTHER CORPORATIONS

         The chairman of the board, the president, any vice president, the chief
financial officer, the secretary or assistant secretary of this corporation, or
any other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority granted
herein may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.

         5.14     AUTHORITY AND DUTIES OF OFFICERS

         In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from time
to time by the board of directors or the stockholders.

                                   ARTICLE VI

                                    INDEMNITY

         6.1      THIRD PARTY ACTIONS

         The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the corporation, which approval shall not be unreasonably
withheld) actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which such
person reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

                                      -18-



         6.2      ACTIONS BY OR IN THE RIGHT OF THE CORPORATION

         The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee or
agent of corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) and amounts paid in settlement (if such settlement is approved in advance
by the corporation, which approval shall not be unreasonably withheld) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper. Notwithstanding any other
provision of this Article VI, no person shall be indemnified hereunder for any
expenses or amounts paid in settlement with respect to any action to recover
short-swing profits under Section 16(b) of the Exchange Act, as amended.

         6.3      SUCCESSFUL DEFENSE

         To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by the
person in connection therewith.

         6.4      DETERMINATION OF CONDUCT

         Any indemnification under Sections 6.1 and 6.2 (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that the indemnification of the director, officer, employee
or agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in Sections 6.1 and 6.2. Such
determination shall be made (1) by the board of directors or the executive
committee, if any, by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding or (2) or if such quorum is
not obtainable or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders. Notwithstanding the foregoing, a director, officer, employee or
agent of the corporation shall be entitled to contest any

                                      -19-



determination that the director, officer, employee or agent has not met the
applicable standard of conduct set forth in Sections 6.1 and 6.2 by petitioning
a court of competent jurisdiction.

         6.5      PAYMENT OF EXPENSES IN ADVANCE

         Expenses incurred in defending a civil or criminal action, suit or
proceeding, by an individual who may be entitled to indemnification pursuant to
Section 6.1 or 6.2, shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such amount if
it shall ultimately be determined that the individual is not entitled to be
indemnified by the corporation as authorized in this Article VI.

         6.6      INDEMNITY NOT EXCLUSIVE

         The indemnification and advancement of expenses provided by or granted
pursuant to the other sections of this Article VI shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in their official
capacity and as to action in another capacity while holding such office.

         6.7      INSURANCE INDEMNIFICATION

         The corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against the
person and incurred by the person in any such capacity or arising out of the
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article VI.

         6.8      THE CORPORATION

         For purposes of this Article VI, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under and subject to the provisions of this Article VI (including,
without limitation the

                                      -20-



provisions of Section 6.4) with respect to the resulting or surviving
corporation as the person would have with respect to such constituent
corporation if its separate existence had continued.

         6.9      EMPLOYEE BENEFIT PLANS

         For purposes of this Article VI, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this Article
VI.

         6.10     CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

         The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VI shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.

                                   ARTICLE VII

                               RECORDS AND REPORTS

         7.1      MAINTENANCE AND INSPECTION OF RECORDS

         The corporation shall, either at its principal executive officer or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and post office or street addresses, or
electronic mail addresses if applicable, and the number and class of shares held
by each stockholder, a copy of these bylaws as amended to date, accounting
books, and other records.

         Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business of the corporation to inspect for any
proper purpose the corporation's stock ledger, a list of its stockholders, and
its other books and records and to make copies or extracts therefrom. A proper
purpose shall mean a purpose reasonably related to such person's interest as a
stockholder. In every

                                      -21-



instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent so to act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.

         The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, showing the post office or street address, or electronic
mail address if applicable, of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

         7.2      INSPECTION BY DIRECTORS

         Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.

         7.3      ANNUAL STATEMENT TO STOCKHOLDERS

         The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.

                                      -22-



                                  ARTICLE VIII

                                 GENERAL MATTERS

         8.1      CHECKS

         From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.

         8.2      EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS

         The board of directors, except as otherwise provided in these bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.

         8.3      STOCK CERTIFICATES; PARTLY PAID SHARES

         The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairman or vice-chairman of
the board of directors, or the president or vice-president, and by the chief
financial officer or an assistant treasurer, or the secretary or an assistant
secretary of such corporation representing the number of shares registered in
certificate form. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if the person were such
officer, transfer agent or registrar at the date of issue.

         The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock

                                      -23-



certificate issued to represent any such partly paid shares, upon the books and
records of the corporation in the case of uncertificated partly paid shares, the
total amount of the consideration to be paid therefor and the amount paid
thereon shall be stated. Upon the declaration of any dividend on fully paid
shares, the corporation shall declare a dividend upon partly paid shares of the
same class, but only upon the basis of the percentage of the consideration
actually paid thereon.

         8.4      SPECIAL DESIGNATION ON CERTIFICATES

         If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.

         8.5      LOST CERTIFICATES

         Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and canceled at the same time. The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or the owner's legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate or uncertificated shares.

         8.6      CONSTRUCTION; DEFINITIONS

         Unless the context requires otherwise, the general provisions, rules of
construction and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a corporation and a natural
person.

                                      -24-



         8.7      DIVIDENDS

         The directors of the corporation, subject to any restrictions contained
in (i) the General Corporation Law of Delaware or (ii) the certificate of
incorporation, may declare and pay dividends upon the shares of its capital
stock. Dividends may be paid in cash, in property or in shares of the
corporation's capital stock.

         The directors of the corporation may set apart out of any of the funds
of the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
corporation, and meeting contingencies.

         8.8      FISCAL YEAR

         The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.

         8.9      SEAL

         The corporation may adopt a corporate seal, which shall be adopted and
which may be altered by the board of directors, and may use the same by causing
it or a facsimile thereof to be impressed or affixed or in any other manner
reproduced.

         8.10     TRANSFER OF STOCK

         Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction in its books.

         8.11     STOCK TRANSFER AGREEMENTS

         The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the General Corporation Law of Delaware.

                                      -25-



         8.12     REGISTERED STOCKHOLDERS

         The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.

                                   ARTICLE IX

                                   AMENDMENTS

         The bylaws of the corporation may be adopted, amended or repealed by
the stockholders entitled to vote; provided, however, that the corporation may,
in its certificate of incorporation, confer the power to adopt, amend or repeal
bylaws upon the directors. The fact that such power has been so conferred upon
the directors shall not divest the stockholders of the power, nor limit their
power to adopt, amend or repeal bylaws.

                                      -26-

EX-10.1

                                                                    EXHIBIT 10.1

                       ASSIGNMENT AND ASSUMPTION AGREEMENT
                         AND ACKNOWLEDGEMENT AND CONSENT

         This Assignment and Assumption Agreement and Acknowledgement and
Consent (the "Agreement") is entered into as of the 30th day of September, 2003,
by and among J.D. Edwards & Company, LLC, a Delaware limited liability company
("JDE LLC"), PeopleSoft, Inc., a Delaware corporation ("PeopleSoft") and Selco
Service Corporation, an Ohio corporation ("Selco").

                               W I T N E S S E T H

         WHEREAS, on August 29, 2003, Jersey Acquisition Corporation, a Delaware
corporation, merged with and into J.D. Edwards & Company, a Delaware corporation
("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter,
J.D. Edwards merged with and into JDE LLC, which is wholly-owned by PeopleSoft,
with JDE LLC being the surviving entity (collectively, the "Mergers"); and

         WHEREAS, Selco and JDE LLC, as successor-in-interest to J.D. Edwards,
are parties to the following off-balance sheet lease financing transactions:

         a.       Off-Balance Sheet Lease Financing for J.D. Edwards & Company
for the Acquisition of a First Headquarters Building in Denver, Colorado
(original closing date of August 26, 1998) ("Phase I Financing");

         b.       Off-Balance Sheet Lease Financing for J.D. Edwards & Company
for the Construction of a Second and Third Headquarters Buildings in Denver,
Colorado (original closing dates of November 15, 1997 and March 15, 1998)
("Phases II/III Financing"); and

         c.       Off-Balance Sheet Lease Financing for J.D. Edwards & Company
for the Acquisition and Construction of the Fourth Headquarters Building in
Denver, Colorado (original closing date of November 10, 1998) ("Phase IV
Financing"); and

         WHEREAS, the Phase I Financing, the Phases II/III Financing and the
Phase IV Financing shall sometimes be collectively referred to herein as the
"Financings"; and

         WHEREAS, in connection with the Mergers, JDE LLC assumed all of the
obligations of J.D. Edwards under the Financings and Selco acknowledged such
assumption; and

         WHEREAS, JDE LLC desires to assign to PeopleSoft and PeopleSoft desires
to assume from JDE LLC all of the rights and interests of JDE LLC in, to and
under the Financing Documents (as defined below); and

                                      -1-


         WHEREAS, PeopleSoft desires to assume from JDE LLC all liabilities and
obligations of JDE LLC under the Financing Documents (while having JDE LLC also
remain primarily liable thereunder as a principal and not as a surety); and

         WHEREAS, all of the Financings prohibit the assignment by JDE LLC of
any of its rights under the Financings, unless certain conditions are met in
full (the "Assignment Conditions"); and

         WHEREAS, Selco, JDE LLC and PeopleSoft desire to enter into this
Agreement for the purpose of satisfying the Assignment Conditions.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft
hereby agree as follows:

         1.       Definitions.

         (a)      "Phase I Financing Documents" shall mean all documents,
instruments or agreements evidencing, securing or otherwise related to the Phase
I Financing, or creating or securing obligations of JDE LLC under the Phase I
Financing, including any amendments, modifications, renewals, increases,
replacements and extensions thereof; including without limitation the following
documents, instruments and agreements:

         (i)      Master Lease Agreement dated as of August 26, 1998 by and
                  between Selco, as owner-lessor, and JDE LLC, as lessee,
                  together with Lease Supplement No. 1 dated as of August 26,
                  1998; as amended by Amendment to Master Lease Agreement,
                  Memorandum of Lease (including Lease Supplement No. 1), and
                  Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of November 5,
                  1998 and recorded in the land records of Denver, Colorado on
                  November 9, 1998 under Reception No. 9800187417; as further
                  amended by Amendment to Master Lease Agreement dated July 9,
                  1999; as further amended by Amendment No. 3 to Master Lease
                  Agreement dated November 12, 1999; and as further amended by
                  Amendment to Definitions Appendix dated as of August 31, 2000
                  (collectively, the "Phase I Master Lease");

         (ii)     Memorandum of Lease (including Lease Supplement No. 1) dated
                  as of August 26, 1998 and recorded in the land records of
                  Denver, Colorado on August 27, 1998 under Reception No.
                  9800142715; as amended by Amendment to Master Lease Agreement,
                  Memorandum of Lease (including Lease Supplement No. 1), and
                  Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of November 5,
                  1998 and recorded in the land records of Denver, Colorado on
                  November 9, 1998 under Reception No. 9800187417;

         (iii)    Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of August 26, 1998
                  from JDE

                                      -2-


                  LLC, to Selco and recorded in the land records of Denver,
                  Colorado on August 27, 1988 under Reception No. 9800142719; as
                  amended by Amendment to Master Lease Agreement, Memorandum of
                  Lease (including Lease Supplement No. 1), and Lessee
                  Collateral Assignment and Security Agreement in Respect of
                  Contracts, Licenses and Permits dated as of November 5, 1998
                  and recorded in the land records of Denver, Colorado on
                  November 9, 1998 under Reception No. 9800187417;

         (iv)     The following Uniform Commercial Code financing statements
                  naming JDE LLC as debtor:

                  (1)      naming Selco, as secured party, assigned to KeyBank
                           National Association, as agent, filed with the Denver
                           County Clerk and Recorder on August 27, 1998 under
                           Reception No. 9800142724, as amended by UCC-3 filed
                           with the Denver County Clerk and Recorder on November
                           10, 1998 under Reception No. 9800188462, as affected
                           by UCC-3 filed with the Denver County Clerk and
                           Recorder on March 29, 1999 under Reception No.
                           9900055508, as continued with the Denver County Clerk
                           and Recorder on August 21, 2003 under Reception No.
                           2003175830 and as amended on August 28, 2003 under
                           Reception No. 2003182799;

                  (2)      naming Selco, as secured party, and KeyBank National
                           Association, as additional secured party, filed with
                           the Colorado Secretary of State on August 31, 1998
                           under Reception No. 19982055672, as amended by UCC-3
                           filed with the Colorado Secretary of State on
                           November 12, 1998 under Reception No. 19982070040, as
                           filed "in lieu" with the Delaware Secretary of State
                           on August 19, 2003 as Filing No. 32158908 and as
                           amended on August 25, 2003 as Filing No. 32213422;

                  (3)      naming Selco, as secured party, assigned to KeyBank
                           National Association, as agent, filed with the
                           Colorado Secretary of State on August 31, 1998 under
                           Reception No. 19982055673, as amended by UCC-3 filed
                           with the Colorado Secretary of State on November 12,
                           1998 under Reception No. 19982070039, as filed "in
                           lieu" with the Delaware Secretary of State on August
                           19, 2003 as Filing No. 32158916 and as amended on
                           August 25, 2003 as Filing No. 32213240;

                  (4)      naming Selco, as secured party, assigned to KeyBank
                           National Association, as agent, filed with the Denver
                           County Clerk and Recorder on August 27, 1998 under
                           Reception No. 9800142723, as amended by UCC-3 filed
                           with the Denver County Clerk and Recorder on November
                           10, 1998 under Reception No. 9800188461, as continued
                           with the Denver County Clerk and

                                      -3-


                           Recorder on August 19, 2003 under Reception No.
                           2003174372 and as amended on August 28, 2003 under
                           Reception No. 2003182800; and

                  (5)      naming KeyBank National Association, as agent, as
                           secured party, filed with the Colorado Secretary of
                           State on June 16, 1999 under Reception No.
                           19992034067, as filed "in lieu" with the Delaware
                           Secretary of State on August 19, 2003 as Filing No.
                           32158940, as amended on August 25, 2003 as Filing No.
                           32213133, and as amended on September 17, 2003 as
                           Filing No. 32422320.

         (v)      Subordination, Recognition, Nondisturbance and Attornment
                  Agreement dated as of August 26, 1998 by and between JDE LLC
                  and KeyBank National Association, a national banking
                  association, as Agent for itself and other Lenders and
                  recorded in the land records of Denver, Colorado on August 27,
                  1998 under Reception No. 9800142720; as amended by Amendment
                  to Subordination, Recognition, Nondisturbance and Attornment
                  Agreement dated October 27, 1998 and recorded in the land
                  records of Denver, Colorado on November 9, 1998 under
                  Reception No. 9800187419;

         (vi)     Pledge and Security Agreement dated as of August 26, 1998 from
                  JDE LLC in favor of Selco and KeyBank National Association, a
                  national banking association, as agent for various lenders; as
                  amended by Side Letter Agreement dated May 13, 1999; as
                  further amended by Amendment to Pledge and Security Agreement
                  dated November 30, 2001 and as further amended by Side Letter
                  Agreement dated August 29, 2003 (collectively, the "Phase I
                  Pledge Agreement");

         (vii)    Environmental Indemnity Agreement dated as of August 26, 1998
                  from JDE LLC, J.D. Edwards World Solutions Company, a Colorado
                  corporation, and J.D. Edwards World Service Company, a
                  Colorado corporation;

         (viii)   Construction Agency Agreement dated as of August 26, 1998 by
                  and between JDE LLC and Selco; and

         (ix)     Assignment Agreement dated as of August 26, 1998 by and
                  between JDE LLC and Selco in connection with a certain
                  Purchase and Sale Agreement dated as of August 6, 1998.

         (b)      "Phases II/III Financing Documents" shall mean all documents,
instruments or agreements evidencing, securing or otherwise related to the
Phases II/III Financing, or creating or securing obligations of JDE LLC under
the Phases II/III Financing, including any amendments, modifications, renewals,
increases, replacements and extension thereof; including without limitation to
following documents, instruments and agreements:

                                      -4-


         (i)      Ground Lease dated November 15, 1997 between JDE LLC and
                  Selco; as amended by Amendment No. 1 to Ground Lease dated as
                  of March 15, 1998 ("Phases II/III Ground Lease");

         (ii)     Memorandum of Ground Lease dated as of November 21, 1997 by
                  and between JDE LLC and Selco and recorded in the land records
                  of Denver, Colorado on November 24, 1997 under Reception No.
                  9700159090;

         (iii)    Master Lease Agreement dated as of November 15, 1997 by and
                  between Selco, as owner-lessor, and JDE LLC, as lessee,
                  together with First Lease Supplement dated as of November 15,
                  1997, as amended and restated by Amended and Restated First
                  Lease Supplement dated as of March 15, 1998, and together with
                  Second Lease Supplement dated as of March 15, 1998; as amended
                  by Amendment No. 1 to Master Lease dated as of March 15, 1998;
                  as further amended by Amendment to Master Lease Agreement
                  dated July 9, 1999; as further amended by Amendment No. 3 to
                  Master Lease Agreement dated November 12, 1999; and as further
                  amended by Amendment to Definitions Appendix dated as of
                  August 31, 2000 (collectively, the "Phases II/III Master
                  Lease");

         (iv)     Memorandum of Lease dated as of November 21, 1997 and recorded
                  in the land records of Denver, Colorado on November 24, 1997
                  under Reception No. 9700159091; as amended and restated by
                  Amended and Restated Memorandum of Lease dated as of April 2,
                  1998 and recorded in the land records of Denver, Colorado on
                  April 2, 1998 under Reception No. 9800050216;

         (v)      Construction Agency Agreement dated as of November 15, 1997 by
                  and between JDE LLC and Selco, as amended by Amendment No. 1
                  to Phase II Construction Agency Agreement dated as of March
                  15, 1998, together with Phase III Construction Agency
                  Agreement dated as of March 15, 1998 by and between JDE LLC
                  and Selco;

         (vi)     Pledge and Security Agreement dated as of November 15, 1997
                  from JDE LLC in favor of Selco and KeyBank National
                  Association, a national banking association; as amended by
                  Amendment No. 1 to Pledge and Security Agreement dated as of
                  March 15, 1998; as further amended by Side Letter Agreement
                  dated May 13, 1999; as further amended by Amendment to Pledge
                  and Security Agreement dated November 30, 2001; and as further
                  amended by Side Letter Agreement dated August 29, 2003
                  (collectively, the "Phase II/III Pledge Agreement");

         (vii)    The following Uniform Commercial Code Financing Statements
                  naming JDE LLC, as debtor:

                  (1)      naming Selco, as secured party, assigned to KeyBank
                           National Association, filed with the Delaware
                           Secretary of State on August

                                      -5-


                           20, 2003 as Filing No. 32171877 and as amended on
                           August 25, 2003 as Filing No. 32213091;

                  (2)      naming Selco, as secured party, assigned to KeyBank
                           National Association, filed with the Delaware
                           Secretary of State on August 20, 2003 as Filing No.
                           32171885 and as amended on August 25, 2003 as Filing
                           No. 32213380;

                  (3)      naming Selco, as secured party, assigned to KeyBank
                           National Association, filed with the Denver County
                           Clerk and Recorder on August 21, 2003 under Reception
                           No. 2003175827 and as amended on August 28, 2003
                           under Reception No. 2003182802; and

                  (4)      naming KeyBank National Association, as agent, as
                           secured party, filed with the Colorado Secretary of
                           State on June 16, 1999 under Reception No.
                           19992034066, as filed "in lieu" with the Delaware
                           Secretary of State on August 19, 2003 as Filing No.
                           32158932 and as amended on August 25, 2003 as Filing
                           No. 32213059, and as amended on September 17, 2003 as
                           Filing No. 32422338.

         (viii)   Deed of Trust, Security Agreement and Fixture Financing
                  Statement dated as of November 15, 1997 from JDE LLC to the
                  Public Trustee in and for the City and County of Denver,
                  Colorado, for the benefit of Selco, and recorded in the land
                  records of Denver, Colorado on November 24, 1997 under
                  Reception no. 9700159088; as assigned to KeyBank National
                  Association, a national banking association, by Assignment
                  dated as of November 15, 1997 and recorded in the land records
                  of Denver, Colorado on November 24, 1997 under Reception No.
                  9700159089, as amended and restated by that certain Amended
                  and Restated Deed of Trust, Security Agreement and Fixture
                  Financing Statement dated as of March 15, 1998 and recorded in
                  the land records of Denver, Colorado on April 2, 1998 under
                  Reception No. 9800050214;

         (ix)     Estoppel Certificate from JDE LLC in connection with the
                  Phases II/III Master Lease dated as of November 24, 1997;

         (x)      Collateral Assignment and Security Agreement with Respect of
                  Contracts, Licenses and Permits dated as of April 1, 1998 from
                  JDE LLC to Selco;

         (xi)     Environmental Indemnity dated as of November 15, 1997 from JDE
                  LLC, J.D. Edwards World Solutions Company, a Colorado
                  corporation, and J.D. Edwards World Source Company, a Colorado
                  corporation; as amended and restated by Amended and Restated
                  Environmental Indemnity Agreement dated as of April 1, 1998;

                                      -6-


         (xii)    Recognition, Non-Disturbance and Attornment Agreement dated as
                  of November 15, 1997 by and between JDE LLC and KeyBank
                  National Association, a national banking association and
                  recorded in the land records of Denver, Colorado on November
                  24, 1997 under Reception No. 9700159095; as amended and
                  restated by Amended and Restated Recognition, Non-Disturbance
                  and Attornment Agreement dated as of March 15, 1998 and
                  recorded in the land records of Denver, Colorado on April 2,
                  1998 under Reception No. 9800050220; and

         (xiii)   Subordination and Agreement Relative to Deed of Trust dated as
                  of November 15, 1997 from JDE LLC in favor of KeyBank National
                  Association, a national banking association, and recorded in
                  the land records of Denver, Colorado on November 24, 1997
                  under Reception No. 9700159092; as amended and restated by
                  Amended and Restated Subordination and Agreement Relative to
                  Deed of Trust dated as of March 15, 1998.

         (c)      "Phase IV Financing Documents" shall mean all documents,
instruments or agreements evidencing, securing or otherwise related to the Phase
IV Financing, or creating or securing obligations of JDE LLC under the Phase IV
Financing, including any amendments, modifications, renewals, increases,
replacements and extensions thereof; including without limitation the following
documents, instruments and agreements:

         (i)      Ground Lease dated November 10, 1998 between JDE LLC and
                  Selco; as amended by Amendment of Ground Lease, Master Lease
                  and Other Documents recorded in the land records of Denver,
                  Colorado on July 11, 2001 under Reception No. 2001113101
                  ("Phase IV Ground Lease");

         (ii)     Master Lease Agreement dated as of November 10, 1998 by and
                  between Selco, as owner-lessor, and JDE LLC, as lessee,
                  together with Lease Supplement No. 1 dated as of November 10,
                  1998; as amended by First Amendment to Master Lease Agreement
                  and other Transaction Documents dated February 22, 1999; as
                  further amended by Amendment to Master Lease dated July 9,
                  1999; as further amended by Amendment No. 2 to Master Lease
                  Agreement dated November 12, 1999; as further amended by
                  Amendment to Definitions Appendix dated as of August 31, 2000;
                  and as further amended by Amendment of Ground Lease, Master
                  Lease and Other Documents recorded in the land records of
                  Denver, Colorado on July 11, 2001 under Reception No.
                  2001113101 (collectively, the Phase IV Master Lease");

         (iii)    Memorandum of Ground Lease dated as of November 10, 1998 by
                  and between JDE LLC and Selco and recorded in the land records
                  of Denver, Colorado on November 10, 1998 under Reception No.
                  9800188464; as amended by Amendment of Ground Lease, Master
                  Lease and Other Documents recorded in the land records of
                  Denver, Colorado on July 11, 2001 under Reception No.
                  2001113101;

                                      -7-


         (iv)     Memorandum of Lease (including Lease Supplement No. 1) dated
                  as of November 10, 1998 by and between JDE LLC and Selco and
                  recorded in the land records of Denver, Colorado on November
                  10, 1998 under Reception No. 9800188465; as amended by
                  Amendment of Ground Lease, Master Lease and Other Documents
                  recorded in the land records of Denver, Colorado on July 11,
                  2001 under Reception No. 2001113101;

         (v)      Deed of Trust, Security Agreement and Fixture Financing
                  Statement dated as of November 10, 1998 from JDE LLC to the
                  Public Trustee in and for the City and County of Denver,
                  Colorado, for the benefit of Selco, and recorded in the land
                  records of Denver, Colorado on November 10, 1998 under
                  Reception No. 9800188463; as affected by Request to Release of
                  Deed of Trust and Release recorded in the land records of
                  Denver, Colorado on July 31, 2001 under Reception No.
                  2001125369;

         (vi)     Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of November 10,
                  1998 from JDE LLC to Selco and recorded in the land records of
                  Denver, Colorado on November 10, 1998 under Reception No.
                  9800188470; as amended by Amendment of Ground Lease, Master
                  Lease and Other Documents recorded in the land records of
                  Denver, Colorado on July 11, 2001 under Reception No.
                  2001113101;

         (vii)    The following Uniform Commercial Code financing statements
                  naming JDE LLC as debtor:

                  (1)      naming Selco, as secured party, assigned to KeyBank
                           National Association, as agent, filed with the Denver
                           County Clerk and Recorder on November 10, 1998 under
                           Reception No. 9800188472, as amended by UCC-3 filed
                           with the Denver County Clerk and Recorder on March
                           29, 1999 under Reception No. 9900055510, as amended
                           by UCC-3 filed with the Denver County Clerk and
                           Recorder on July 11, 2001 under Reception No.
                           2001113103, as continued with the Denver County Clerk
                           and Recorder on August 21, 2003 under Reception No.
                           2003175831 and as amended on August 28, 2003 under
                           Reception No. 2003182798;

                  (2)      naming Selco, as secured party, assigned to KeyBank
                           National Association, as agent, filed with the
                           Colorado Secretary of State on November 12, 1998
                           under Reception No. 19982070038, as filed "in lieu"
                           with the Delaware Secretary of State on August 19,
                           2003 as Filing No. 32158924 and as amended on August
                           25, 2003 as Filing No. 32213208;

                  (3)      naming Selco, as secured party, assigned to KeyBank
                           National Association, as agent, filed with the Denver
                           County Clerk and

                                      -8-


                           Recorder on November 10, 1998 under Reception No.
                           9800188473, as affected by UCC-3 filed with the
                           Denver County Clerk and Recorder on March 29, 1999
                           under Reception No. 9900055507, as continued with the
                           Denver County Clerk and Recorder on August 19, 2003
                           under Reception No. 2003174374 and as amended on
                           August 28, 2003 under Reception No. 2003182801; and

                  (4)      naming KeyBank National Association, as agent, as
                           secured party, filed with the Colorado Secretary of
                           State on June 16, 1999 under Reception No.
                           19992034068, as filed "in lieu" with the Delaware
                           Secretary of State on August 19, 2003 as Filing No.
                           32158957, as amended on August 25, 2003 as Filing No.
                           32213406 and as amended on September 17, 2003 as
                           Filing No. 32422346.

         (viii)   Recognition, Non-Disturbance and Attornment Agreement dated as
                  of November 10, 1998 by and between JDE LLC and KeyBank
                  National Association, a national banking association, as Agent
                  for itself and other Lenders, and recorded in the land records
                  of Denver, Colorado on November 10, 1998 under Reception No.
                  9800188471; as amended by Amendment of Ground Lease, Master
                  Lease and Other Documents recorded in the land records of
                  Denver, Colorado on July 11, 2001 under Reception No.
                  2001113101;

         (ix)     Subordination and Agreement Relative to Owner Deed of Trust
                  dated as of November 10, 1998 from JDE LLC in favor of Selco
                  and KeyBank National Association, a national banking
                  association, as Agent for the Lenders and recorded in the land
                  records of Denver, Colorado on November 10, 1998 under
                  Reception No. 9800188466; as amended by Amendment of Ground
                  Lease, Master Lease and Other Documents recorded in the land
                  records of Denver, Colorado on July 11, 2001 under Reception
                  No. 2001113101;

         (x)      Pledge and Security Agreement dated as of November 10, 1998
                  from JDE LLC to Selco and KeyBank National Association, a
                  national banking association, as agent for various lenders; as
                  amended by First Amendment to Master Lease Agreement and other
                  Transaction Documents dated February 22, 1999; as further
                  amended by Side Letter Agreement dated May 13, 1999; as
                  further amended by Amendment of Ground Lease, Master Lease and
                  Other Documents recorded in the land records of Denver,
                  Colorado on July 11, 2001 under Reception No. 2001113101; as
                  further amended by Amendment to Pledge and Security Agreement
                  dated November 19, 2001; and as further amended by Side Letter
                  Agreement dated August 27, 2003 (collectively, the "Phase IV
                  Pledge Agreement");

         (xi)     Environmental Indemnity Agreement dated as of November 10,
                  1998 from JDE LLC, J.D. Edwards World Solutions Company, a
                  Colorado

                                      -9-


                  corporation, and J.D. Edwards World Source Company, a Colorado
                  corporation; as amended by Amendment of Ground Lease, Master
                  Lease and Other Documents recorded in the land records of
                  Denver, Colorado on July 11, 2001 under Reception No.
                  2001113101; and

         (xii)    Construction Agency Agreement dated as of November 10, 1998 by
                  and between JDE LLC and Selco; as amended by Amendment of
                  Ground Lease, Master Lease and Other Documents recorded in the
                  land records of Denver, Colorado on July 11, 2001 under
                  Reception No. 2001113101.

         Each of the Uniform Commercial Code Financing Statements described in
         the foregoing Sections 1(a)(iv), 1(b)(vii) and 1(c)(vii) shall
         sometimes be collectively referred to herein as the "UCC Financing
         Statements".

         2.       Assignment. JDE LLC hereby transfers, assigns and conveys to
PeopleSoft all of JDE LLC's rights and interests in and to the Phase I Financing
Documents, the Phases II/III Financing Documents and the Phase IV Financing
Documents (which shall sometimes be collectively referred to herein as the
"Financing Documents"). Notwithstanding anything to the contrary herein, JDE LLC
shall remain primarily liable under the Financing Documents (as a principal and
not as a surety).

         3.       Assumption. PeopleSoft hereby accepts and assumes all such
right and interests assigned to it above and also hereby accepts and assumes all
past, current and future liabilities and obligations, and joins in all
representations, warranties, and indemnities, of JDE LLC under the Financing
Documents. Such assumption is absolute and irrevocable. PeopleSoft shall
perform, comply with and be bound by all the terms, covenants, agreements,
provisions and conditions of the Financing Documents on the part of JDE LLC to
be performed hereunder before and/or after the date hereof. Notwithstanding
anything to the contrary herein, the parties hereto agree and acknowledge that
nothing set forth in this Agreement or in any of the other documents executed in
connection herewith shall constitute a release of JDE LLC from any of its
liabilities or obligations under the Financing Documents, and that JDE LLC and
PeopleSoft each shall be primarily liable thereunder as principals and not as
sureties.

         4.       Representations. JDE LLC and PeopleSoft hereby represent and
warrant as follows:

         (a)      PeopleSoft is a corporation controlling JDE LLC by reason of
stock ownership of JDE LLC of greater than fifty percent (50%);

         (b)      JDE LLC and PeopleSoft will promptly and duly execute and
deliver to Selco such other documents and assurances, and will take such further
actions as Selco may from time to time reasonably request, in order to carry out
more effectively the intent and purposes of this Agreement and to establish and
protect the rights and remedies created or intended to be created in favor of
Selco hereunder or under the Financing Documents;

                                      -10-


         (c)      To the knowledge of JDE LLC and PeopleSoft, as applicable,
neither Selco nor KeyBank National Association (in its individual capacity or as
an agent for various lenders) is in default under any of the terms of the
Financing Documents, nor has any event occurred, which with the giving of notice
or the passage of time, or both, could constitute such a default;

         (d)      To the knowledge of JDE LLC and PeopleSoft, as applicable,
neither JDE LLC nor PeopleSoft has any claims, counterclaims, defenses or
set-offs against any other party to the Financing Documents;

         (e)      The assignment and assumption set forth herein and the
execution and delivery of this Agreement or any other document executed in
connection herewith will not constitute a violation of any law, order or
regulation applicable to JDE LLC or PeopleSoft or any contract or agreement to
which either is a party or by which any of its properties may be bound; and

         (f)      This Agreement and each and every document to be executed by
JDE LLC and/or PeopleSoft in connection herewith are duly authorized, executed
and delivered, and assuming the due authorization, execution and delivery
thereof by the other parties thereto (other than J.D. Edwards World Source
Company and J.D. Edwards World Solution Company) constitute the legal, valid and
binding obligations of JDE LLC and PeopleSoft in accordance with the respective
terms hereof and thereof, except as enforceability may be subject to the
exercise of judicial discretion in accordance with general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
for the relief of debtors.

         5.       Covenants, Representations and Warranties. JDE LLC hereby
reaffirms, and PeopleSoft hereby affirms, that from and after the date hereof,
PeopleSoft shall be responsible for performing all covenants, representations
and warranties of JDE LLC in the Financing Documents. The foregoing shall not be
deemed in any way to release JDE LLC from liability under the Financing
Documents

         6.       Acknowledgement. In reliance on this Agreement, and provided
that the conditions precedent set forth in Section 8 of this Agreement have been
satisfied, Selco hereby acknowledges that except for the matters set forth in
Section 7, the assignment of the Financing Documents and the related collateral,
rights and interests to PeopleSoft does not require the consent of Selco under
the Financing Documents. JDE LLC and PeopleSoft agree and acknowledge that such
acknowledgement is a one time acknowledgement relating solely to the assignment
of the Financing Documents to PeopleSoft and shall not extend to any other
assignment of the Financing Documents. Selco, JDE LLC and PeopleSoft further
agree and acknowledge that all references in the Financing Documents to J.D.
Edwards or JDE LLC, or other terms used therein which refer to J.D. Edwards or
JDE LLC, shall be deemed to mean and to refer to PeopleSoft. Without limiting
the generality of the foregoing, Selco further acknowledges and agrees that upon
such assignment and assumption, PeopleSoft will be the lessee under the Phase I
Master Lease, the Phases II/III Master Lease and the Phase IV Master Lease.

                                      -11-


         7.       Consent. Selco hereby consents to the assignment by JDE LLC to
PeopleSoft of (a) JDE LLC's interest in the Phases II/III Ground Lease and the
Phase IV Ground Lease and (b) of JDE LLC's interest in the Phase I Pledge
Agreement, the Phase II/III Pledge Agreement, the Phase IV Pledge Agreement and
the related collateral. Selco hereby further consents to the conveyance to
PeopleSoft of the fee interest in the land described in the Phases II/III Ground
Lease and the Phase IV Ground Lease. JDE LLC and PeopleSoft agree and
acknowledge that such consent is a one time consent relating solely to the
assignments and conveyance to PeopleSoft and shall not extend to any other
assignment of the ground lessor's interest in the Phases II/III Ground Lease or
the Phase IV Ground Lease or to any other assignment of the Phase I Pledge
Agreement, the Phases II/III Pledge Agreement or the Phase IV Pledge Agreement,
or the related collateral, or to any other conveyance of the fee interest in the
land described therein.

         8.       Conditions Precedent to Acknowledgement and Consent. The
acknowledgement set forth in Section 6 of this Agreement and the consent set
forth in Section 7 of this Agreement shall become effective upon the execution
of this Agreement by Selco; provided, however, that the following conditions
shall be satisfied prior thereto (or in the case of the conditions set forth in
Section 8(c), Section 8(e) and Section 8(f), within the time periods set forth
therein):

         (a)      Selco shall have received two (2) executed originals of this
Agreement signed by JDE LLC and PeopleSoft;

         (b)      PeopleSoft shall have filed amendments to all UCC Financing
Statements (filed in respect of the Financings, and which name JDE LLC as the
debtor) in form and substance reasonably satisfactory to Selco for all UCC
Financing Statements which shall substitute PeopleSoft as the debtor;

         (c)      Within seven (7) days after the date of this Agreement, Selco
shall have received, at the sole expense of JDE LLC and PeopleSoft, endorsements
to all title insurance policies issued in favor of Selco or KeyBank National
Association in connection with the Financings, in form and substance reasonably
satisfactory to Selco, reflecting the assignment of all rights and interests in
the Financings from JDE LLC to PeopleSoft and the assumption of liabilities and
obligations under the Financings by PeopleSoft;

         (d)      Selco shall have received letters, in form and substance
acceptable to Selco, from McDonald Investments, Inc. (with respect to Account
Nos. 61467363, 61467396 and 61467382) acknowledging that PeopleSoft is the owner
of each account and that McDonald Investments, Inc. shall indicate on its books
and records that each account shall remain pledged by PeopleSoft, as debtor, to
Selco and KeyBank National Association, as agent;

         (e)      Within sixty (60) days after the date of this Agreement, Selco
shall have received an opinion of counsel for JDE LLC and PeopleSoft, in the
form delivered to Selco on the date hereof, with respect to the due
organization, legal existence and corporate power and authority of JDE LLC and
PeopleSoft to enter into and perform this

                                      -12-


Agreement and the enforceability of this Agreement and all other documents
executed in connection herewith against JDE LLC and PeopleSoft;

         (f)      Within three (3) days after the date of this Agreement, Selco
shall have received payment in full of all of Selco's costs and expenses related
to this Agreement;

         (g)      The representations and warranties set forth in Section 4 of
this Agreement shall be true and correct; and

         (h)      Selco shall have received the deeds, amendments, assignments
and assumption agreements attached hereto and incorporated herein by reference
as Exhibit 1.

         9.       Evidence of Filing of Amendments to UCC Financing Statements.
PeopleSoft shall provide Selco with evidence that the amendments to the UCC
Financing Statements required to be filed under Section 8(b) above have been
filed within three (3) weeks of the date of this Agreement. JDE LLC and
PeopleSoft hereby acknowledge and agree that if evidence of all required
amendments to the UCC Financing Statements is not provided to Selco according to
the terms of Section 8(b) above, the acknowledgement granted pursuant to this
Agreement shall be null and void and JDE LLC shall be deemed in default of its
obligations under the Financing Documents.

         10.      Notices. From and after the date of this Agreement, all
notices and other correspondence to be delivered to PeopleSoft or any Guarantor
(as defined in the Financing Documents) pursuant to any Financing Document shall
be sent to the following addresses:

                  PeopleSoft, Inc.
                  4460 Hacienda Drive
                  Pleasanton, California 94588
                  Attention: Anne S. Jordan, Vice President & Secretary

         and to:

                  PeopleSoft, Inc.
                  4500 PeopleSoft Parkway
                  Pleasanton, California 94588
                  Attention: John Schoonbrood, Vice President & Corporate
                  Treasurer

         11.      Miscellaneous.

         (a)      This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Colorado and may not be
modified or amended in any manner other than by written agreement signed by the
party to charged therewith.

         (b)      This Agreement may be executing in counterparts, which
collectively shall constitute one instrument.

                                      -13-


         (c)      This Agreement shall be binding upon, and inure to the benefit
of the parties hereto and their respective successors and assigns.

         (d)      Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be valid under applicable law, but, if any
provision of this Agreement shall be invalid or prohibited thereunder, such
invalidity or prohibition shall be construed as if such invalid or prohibited
provision had not been inserted herein and shall not affect the remainder of
such provision or the remaining provisions of this Agreement.

         (e)      The language in all parts of this Agreement shall be in all
cases construed simply according to its fair meaning and not strictly for or
against any of the parties hereto for any reason, including without limitation,
by virtue of the fact that it may have been drafted or prepared by counsel for
one of the parties, it being recognized that all parties have contributed
materially and substantially to the preparation of this Agreement. Section and
Paragraph headings of this Agreement are solely for convenience of reference and
shall not govern the interpretation of any of the provisions of this Agreement.

         (f)      This Agreement is the complete agreement among the parties
hereto with respect to the subject matter hereof.

                                      -14-


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                              J.D. EDWARDS & COMPANY, LLC, a
                                              Delaware limited liability company

                                              By: /s/ Anne S. Jordan
                                                  ------------------------------
                                                  Name: Anne S. Jordan
                                                  duly authorized

                                              PEOPLESOFT, INC, a Delaware
                                              corporation

                                              By: /s/ Anne S. Jordan
                                                  ------------------------------
                                                  Name:  Anne S. Jordan
                                                  duly authorized

                                              SELCO SERVICE CORPORATION, an
                                              Ohio corporation

                                              By: /s/ Donald C. Davis
                                                  ------------------------------
                                                  Name:  Donald C. Davis
                                                  duly authorized

                                      -15-


         The following parties hereby consent to the foregoing Agreement and the
terms thereof:

                                              J.D. EDWARDS WORLD SOURCE
                                              COMPANY, a Colorado corporation

                                              By: /s/ Richard G. Snow
                                                  ------------------------------
                                                  Name: Richard G. Snow
                                                  Title: VP/Gen. Counsel

                                              J.D. EDWARDS WORLD SOLUTION
                                              COMPANY, a Colorado corporation

                                              By: /s/ Richard G. Snow
                                                  ------------------------------
                                                  Name: Richard G. Snow
                                                  Title: VP/Gen. Counsel

         The following party hereby acknowledges the foregoing Agreement and the
terms thereof:

                                              KEYBANK NATIONAL ASSOCIATION,
                                              individually and as agent

                                              By: /s/ Thomas A. Crandell
                                                  ------------------------------
                                                  Name: Thomas A. Crandell
                                                  Title: Senior Vice President

                                      -16-

EX-10.2

                                                                    EXHIBIT 10.2

                                                                         PHASE I

               ASSIGNMENT AND ASSUMPTION OF SECURITY DOCUMENTS AND
                   AMENDMENT TO MEMORANDUM OF LEASE (INCLUDING
                             LEASE SUPPLEMENT NO. 1)

         This Assignment and Assumption of Security Documents and Amendment to
Memorandum of Lease (including Lease Supplement No. 1) ("Agreement") is made as
of the 30th day of September, 2003 by and among J.D. Edwards & Company, LLC, a
Delaware limited liability company ("JDE LLC"), PeopleSoft, Inc., a Delaware
corporation ("PeopleSoft") and Selco Service Corporation, an Ohio Corporation
("Selco").

I        Background

         1.       On August 29, 2003, Jersey Acquisition Corporation, a Delaware
corporation, merged with and into J.D. Edwards & Company, a Delaware corporation
("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter,
J.D. Edwards merged with and into JDE LLC, which is wholly owned by PeopleSoft,
with JDE LLC being the surviving entity.

         2.       Selco and JDE LLC, as successor-in-interest to J.D. Edwards,
are parties to that certain Off-Balance Sheet Lease Financing for J.D. Edwards &
Company for the acquisition of a First Headquarters Building in Denver, Colorado
(original closing date of August 26, 1998) ("Phase I Financing").

         3.       For purposes of this Agreement the term "Phase I Financing
Documents" shall mean all documents, instruments or agreements evidencing,
securing or otherwise related to the Phase I Financing, or creating or securing
obligations of JDE LLC under the Phase I Financing, including any amendments,
modifications, renewals, increases, replacements or extensions thereof;
including without limitation, all of the following documents, instruments or
agreements that were recorded in the land records of Denver County, Colorado:

         (i)      Master Lease Agreement dated as of August 26, 1998 by and
                  between Selco, as owner-lessor, and JDE LLC, as lessee,
                  together with Lease Supplement No. 1 dated as of August 26,
                  1998; as amended by Amendment to Master Lease Agreement,
                  Memorandum of Lease (including Lease Supplement No. 1), and
                  Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of November 5,
                  1998 and recorded in the land records of Denver, Colorado on
                  November 9, 1998 under Reception No. 9800187417; as further
                  amended by Amendment to Master Lease Agreement dated July 9,

                                        1



                  1999; as further amended by Amendment No. 3 to Master Lease
                  Agreement dated November 12, 1999; and as further amended by
                  Amendment to Definitions Appendix dated as of August 31, 2000
                  (collectively, the "Phase I Master Lease");

         (ii)     Memorandum of Lease (including Lease Supplement No. 1) dated
                  as of August 26, 1998 and recorded in the land records of
                  Denver, Colorado on August 27, 1998 under Reception No.
                  9800142715; as amended by Amendment to Master Lease Agreement,
                  Memorandum of Lease (including Lease Supplement No. 1), and
                  Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of November 5,
                  1998 and recorded in the land records of Denver, Colorado on
                  November 9, 1998 under Reception No. 9800187417 (collectively,
                  the "Phase I Memorandum of Lease");

         (iii)    Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of August 26, 1998
                  from JDE LLC, to Selco and recorded in the land records of
                  Denver, Colorado on August 27, 1988 under Reception No.
                  9800142719; as amended by Amendment to Master Lease Agreement,
                  Memorandum of Lease (including Lease Supplement No. 1), and
                  Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of November 5,
                  1998 and recorded in the land records of Denver, Colorado on
                  November 9, 1998 under Reception No. 9800187417; and

         (iv)     Subordination, Recognition, Nondisturbance and Attornment
                  Agreement dated as of August 26, 1998 by and between JDE LLC
                  and KeyBank National Association, a national banking
                  association, as Agent for itself and other Lenders and
                  recorded in the land records of Denver, Colorado on August 27,
                  1998 under Reception No. 9800142720; as amended by Amendment
                  to Subordination, Recognition, Nondisturbance and Attornment
                  Agreement dated October 27, 1998 and recorded in the land
                  records of Denver, Colorado on November 9, 1998 under
                  Reception No. 9800187419.

         4.       On this date, JDE LLC has assigned to PeopleSoft and
PeopleSoft has assumed from JDE LLC all of JDE LLC's rights and interest under
the Phase I Master Lease, and the other Phase I Financing Documents.

         5.       On this date, PeopleSoft has assumed all of JDE LLC's
obligations and liabilities under the Phase I Master Lease and the other Phase I
Financing Documents, while JDE LLC also remains primarily liable thereunder as a
principal and not as a surety.

         6.       Selco, JDE LLC, PeopleSoft desire to enter into this Agreement
for purposes of confirming, evidencing and effectuating such assignment and
assumption.

                                       2


         Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft
hereby agree as follows:

         (i)      Assignment. JDE LLC hereby transfers, assigns and conveys to
                  PeopleSoft all of JDE LLC's rights and interest in and to the
                  Phase I Financing Documents, including without limitation, all
                  of JDE LLC's rights and interests under the Phase I Master
                  Lease. Notwithstanding anything to the contrary herein, JDE
                  LLC shall remain primarily liable under the Phase I Financing
                  Documents (as a principal and not as a surety).

         (ii)     Assumption. PeopleSoft hereby accepts and assumes all such
                  rights and interests assigned to it above and also hereby
                  accepts and assumes all past, current liabilities and
                  obligations, and joins in all representations, warranties and
                  indemnities of JDE LLC, under the Phase I Financing Documents.
                  Notwithstanding anything to the contrary herein, the parties
                  hereto agree and acknowledge that nothing set forth in this
                  Agreement or in any of the other documents executed in
                  connection herewith shall constitute a release of JDE LLC from
                  any of its liabilities or obligations under the Phase I
                  Financing Documents, and that JDE LLC and PeopleSoft each
                  shall be primarily liable thereunder as principals and not as
                  sureties.

         (iii)    As of the date of this Agreement, all references in the Phase
                  I Financing Documents to J.D. Edwards or JDE LLC, or other
                  terms used therein which refer to J.D. Edwards or JDE LLC,
                  shall be deemed to mean and refer to PeopleSoft.

         (iv)     The term "Lessee," as set forth in the Phase I Memorandum of
                  Lease, shall mean PeopleSoft.

         (v)      Except as herein affected, the Phase I Financing Documents and
                  all covenants, agreements, terms and conditions thereof shall
                  remain and continue in full force and effect and are hereby in
                  all respects ratified and confirmed.

         (vi)     The covenants, agreements, terms and conditions of this
                  Agreement shall bind and inure to the benefit to the parties
                  hereto and their respective permitted successors and assigns.

         (vii)    This Agreement shall not be changed orally, but only by
                  writing signed by the parties against whom enforcement thereof
                  is sought.

                                       3


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                              J.D. EDWARDS & COMPANY, LLC, a
                                              Delaware limited liability company

                                              By: /s/ Anne S. Jordan
                                                  ------------------------------
                                                  Name: Anne S. Jordan
                                                  Duly Authorized

                                              PEOPLESOFT, INC., a Delaware
                                              corporation

                                              By: /s/ Anne S. Jordan
                                                  ------------------------------
                                                  Name: Anne S. Jordan
                                                  Duly Authorized

                                              SELCO SERVICE CORPORATION, an
                                              Ohio corporation

                                              By: /s/ Donald C. Davis
                                                  ------------------------------
                                                  Name:  Donald C. Davis
                                                  Duly Authorized

                                       4


         The following party hereby acknowledges the foregoing Agreement and the
terms thereof:

                                              KEYBANK NATIONAL ASSOCIATION,
                                              individually and as agent

                                              By: /s/  Thomas A. Crandell
                                                  -----------------------
                                                  Name: Thomas A. Crandell
                                                  Title: Senior Vice President

[notary acknowledgements omitted]

                                       5

EX-10.3

                                                                    EXHIBIT 10.3

                                                                   PHASES II/III

                ASSIGNMENT AND ASSUMPTION OF SECURITY DOCUMENTS,
                AMENDMENT TO MEMORANDUM OF LEASE AND AMENDMENT TO
                           MEMORANDUM OF GROUND LEASE

         This Assignment and Assumption of Security Documents, Amendment to
Memorandum of Lease and Amendment to Memorandum of Ground Lease ("Agreement") is
made as of the 30th day of September, 2003 by and among J.D. Edwards & Company,
LLC, a Delaware limited liability company ("JDE LLC"), PeopleSoft, Inc., a
Delaware corporation ("PeopleSoft") and Selco Service Corporation, an Ohio
Corporation ("Selco").

I        Background

         1.       On August 29, 2003, Jersey Acquisition Corporation, a Delaware
corporation, merged with and into J.D. Edwards & Company, a Delaware corporation
("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter,
J.D. Edwards merged with and into JDE LLC, which is wholly owned by PeopleSoft,
with JDE LLC being the surviving entity.

         2.       Selco and JDE LLC, as successor-in-interest to J.D. Edwards,
are parties to that certain Off-Balance Sheet Lease Financing for J.D. Edwards &
Company for the Construction of a Second and Third Headquarters Buildings in
Denver, Colorado (original closing dates of November 15, 1997 and March 15,
1998) ("Phases II/III Financing").

         3.       For purposes of this Agreement the term "Phases II/III
Financing Documents" shall mean all documents, instruments or agreements
evidencing, securing or otherwise related to the Phases II/III Financing, or
creating or securing obligations of JDE LLC under the Phases II/III Financing,
including any amendments, modifications, renewals, increases, replacements or
extensions thereof; including without limitation, all of the following
documents, instruments or agreements that were recorded in the land records of
Denver County, Colorado:

         (i)      Ground Lease dated November 15, 1997 between JDE LLC and
                  Selco; as amended by Amendment No. 1 to Ground Lease dated as
                  of March 15, 1998 ("Phases II/III Ground Lease");

         (ii)     Memorandum of Ground Lease dated as of November 21, 1997 by
                  and between JDE LLC and Selco and recorded in the land records
                  of Denver, Colorado on November 24, 1997 under Reception No.
                  9700159090 (Phases II/III Memorandum of Ground Lease");

                                        1


         (iii)    Master Lease Agreement dated as of November 15, 1997 by and
                  between Selco, as owner-lessor, and JDE LLC, as lessee,
                  together with First Lease Supplement dated as of November 15,
                  1997, as amended and restated by Amended and Restated First
                  Lease Supplement dated as of March 15, 1998, and together with
                  Second Lease Supplement dated as of March 15, 1998; as amended
                  by Amendment No. 1 to Master Lease dated as of March 15, 1998;
                  as further amended by Amendment to Master Lease Agreement
                  dated July 9, 1999; as further amended by Amendment No. 3 to
                  Master Lease Agreement dated November 12, 1999; and as further
                  amended by Amendment to Definitions Appendix dated as of
                  August 31, 2000 (collectively, the "Phases II/III Master
                  Lease");

         (iv)     Memorandum of Lease dated as of November 21, 1997 and recorded
                  in the land records of Denver, Colorado on November 24, 1997
                  under Reception No. 9700159091; as amended and restated by
                  Amended and Restated Memorandum of Lease dated as of April 2,
                  1998 and recorded in the land records of Denver, Colorado on
                  April 2, 1998 under Reception No. 9800050216 (collectively,
                  the "Phases II/III Memorandum of Lease");

         (v)      Deed of Trust, Security Agreement and Fixture Financing
                  Statement dated as of November 15, 1997 from JDE LLC to the
                  Public Trustee in and for the City and County of Denver,
                  Colorado, for the benefit of Selco, and recorded in the land
                  records of Denver, Colorado on November 24, 1997 under
                  Reception no. 9700159088; as assigned to KeyBank National
                  Association, a national banking association, by Assignment
                  dated as of November 15, 1997 and recorded in the land records
                  of Denver, Colorado on November 24, 1997 under Reception No.
                  9700159089, as amended and restated by that certain Amended
                  and Restated Deed of Trust, Security Agreement and Fixture
                  Financing Statement dated as of March 15, 1998 and recorded in
                  the land records of Denver, Colorado on April 2, 1998 under
                  Reception No. 9800050214 (collectively, the "Phases II/III
                  Deed of Trust");

         (vi)     Recognition, Non-Disturbance and Attornment Agreement dated as
                  of November 15, 1997 by and between JDE LLC and KeyBank
                  National Association, a national banking association and
                  recorded in the land records of Denver, Colorado on November
                  24, 1997 under Reception No. 9700159095; as amended and
                  restated by Amended and Restated Recognition, Non-Disturbance
                  and Attornment Agreement dated as of March 15, 1998 and
                  recorded in the land records of Denver, Colorado on April 2,
                  1998 under Reception No. 9800050220; and

         (vii)    Subordination and Agreement Relative to Deed of Trust dated as
                  of November 15, 1997 from JDE LLC in favor of KeyBank National
                  Association, a national banking association, and recorded in
                  the land records of Denver, Colorado on November 24, 1997
                  under Reception No. 9700159092; as amended and restated by
                  Amended and Restated

                                       2


                  Subordination and Agreement Relative to Deed of Trust dated as
                  of March 15, 1998.

         4.       On this date, JDE LLC has assigned to PeopleSoft and
PeopleSoft has assumed from JDE LLC all of JDE LLC's rights and interest under
the Phases II/III Ground Lease, the Phases II/III Master Lease, and the other
Phases II/III Financing Documents.

         5.       On this date, PeopleSoft has assumed all of JDE LLC's
obligations and liabilities under the Phases II/III Ground Lease, the Phases
II/III Master Lease, and the other Phases II/III Financing Documents, while JDE
LLC also remains primarily liable thereunder as a principal and not as a surety.

         6.       Selco, JDE LLC, PeopleSoft desire to enter into this Agreement
for purposes of confirming, evidencing and effectuating such assignment and
assumption.

         Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft
hereby agree as follows:

         (i)      Assignment. JDE LLC hereby transfers, assigns and conveys to
                  PeopleSoft all of JDE LLC's rights and interest in and to the
                  Phases II/III Financing Documents, including without
                  limitation, all of JDE LLC's rights and interests under the
                  Phases II/III Ground Lease and the Phases II/III Master Lease.
                  Notwithstanding anything to the contrary herein, JDE LLC shall
                  remain primarily liable under the Phases II/III Financing
                  Documents (as a principal and not as a surety).

         (ii)     Assumption. PeopleSoft hereby accepts and assumes all such
                  rights and interests assigned to it above and also hereby
                  accepts and assumes all past, current liabilities and
                  obligations, and joins in all representations, warranties and
                  indemnities of JDE LLC, under the Phases II/III Financing
                  Documents, including without limitation, all liabilities and
                  obligations under the Phases II/III Deed of Trust.
                  Notwithstanding anything to the contrary herein, the parties
                  hereto agree and acknowledge that nothing set forth in this
                  Agreement or in any of the other documents executed in
                  connection herewith shall constitute a release of JDE LLC from
                  any of its liabilities or obligations under the Phase II/III
                  Financing Documents, and that JDE LLC and PeopleSoft each
                  shall be primarily liable thereunder as principals and not as
                  sureties.

         (iii)    JDE LLC has granted, conveyed, transferred, delivered,
                  assigned and set over unto the Public Trustee in and for the
                  City and County of Denver, Colorado as Trustee for the benefit
                  of Selco, the property described in the Phases II/III Deed of
                  Trust. PeopleSoft hereby ratifies and confirms such grant,
                  conveyance, transfer, delivery, assignment and setting over.

                                       3


         (iv)     As of the date of this Agreement, all references in the Phases
                  II/III Financing Documents to J.D. Edwards or JDE LLC, or
                  other terms used therein which refer to J.D. Edwards or JDE
                  LLC, shall be deemed to mean and refer to PeopleSoft.

         (v)      The term "Tenant," as set forth in the Phases II/III
                  Memorandum of Lease, shall mean PeopleSoft.

         (vi)     The term "Ground Landlord," as set forth in the Phases II/III
                  Memorandum of Ground Lease, shall mean PeopleSoft.

         (vii)    Except as herein affected, the Phases II/III Financing
                  Documents and all covenants, agreements, terms and conditions
                  thereof shall remain and continue in full force and effect and
                  are hereby in all respects ratified and confirmed.

         (viii)   The covenants, agreements, terms and conditions of this
                  Agreement shall bind and inure to the benefit to the parties
                  hereto and their respective permitted successors and assigns.

         (ix)     This Agreement shall not be changed orally, but only by
                  writing signed by the parties against whom enforcement thereof
                  is sought.

                                       4


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                              J.D. EDWARDS & COMPANY, LLC, a
                                              Delaware limited liability company

                                              By: /s/ Anne S. Jordan
                                                  ------------------------------
                                                  Name: Anne S. Jordan
                                                  Duly Authorized

                                              PEOPLESOFT, INC., a Delaware
                                              corporation

                                              By: /s/ Anne S. Jordan
                                                  ------------------------------
                                                  Name:  Anne S. Jordan
                                                  Duly Authorized

                                              SELCO SERVICE CORPORATION, an
                                              Ohio corporation

                                              By: /s/ Donald C. Davis
                                                  ------------------------------
                                                  Name: Donald C. Davis
                                                  Duly Authorized

                                       5


         The following party hereby acknowledges the foregoing Agreement and the
terms thereof:

                                              KEYBANK NATIONAL ASSOCIATION,
                                              individually and as agent

                                              By:  /s/  Thomas A. Crandell
                                                   -----------------------------
                                                   Name: Thomas A. Crandell
                                                   Title: Senior Vice President

[notary acknowledgements omitted]

                                       6

EX-10.4

\
                                                                    EXHIBIT 10.4

                                                                        PHASE IV

           ASSIGNMENT AND ASSUMPTION OF SECURITY DOCUMENTS, AMENDMENT
         TO MEMORANDUM OF LEASE (INCLUDING LEASE SUPPLEMENT NO. 1) AND
                     AMENDMENT TO MEMORANDUM OF GROUND LEASE

         This Assignment and Assumption of Security Documents, Amendment to
Memorandum of Lease (including Lease Supplement No. 1) and Amendment to
Memorandum of Ground Lease ("Agreement") is made as of the 30th day of
September, 2003 by and among J.D. Edwards & Company, LLC, a Delaware limited
liability company ("JDE LLC"), PeopleSoft, Inc., a Delaware corporation
("PeopleSoft") and Selco Service Corporation, an Ohio Corporation ("Selco").

I        Background

         1.       On August 29, 2003, Jersey Acquisition Corporation, a Delaware
corporation, merged with and into J.D. Edwards & Company, a Delaware corporation
("J.D. Edwards"), with J.D. Edwards being the surviving entity, and thereafter,
J.D. Edwards merged with and into JDE LLC, which is wholly owned by PeopleSoft,
with JDE LLC being the surviving entity.

         2.       Selco and JDE LLC, as successor-in-interest to J.D. Edwards,
are parties to that certain Off-Balance Sheet Lease Financing for J.D. Edwards &
Company for the Acquisition and Construction of a Fourth Headquarters Building
in Denver, Colorado (original closing date of November 10, 1998) ("Phase IV
Financing").

         3.       For purposes of this Agreement the term "Phase IV Financing
Documents" shall mean all documents, instruments or agreements evidencing,
securing or otherwise related to the Phase IV Financing, or creating or securing
obligations of JDE LLC under the Phase IV Financing, including any amendments,
modifications, renewals, increases, replacements or extensions thereof;
including without limitation, all of the following documents, instruments or
agreements that were recorded in the land records of Denver County, Colorado:

         (i)      Ground Lease dated November 10, 1998 between JDE LLC and
                  Selco; as amended by Amendment of Ground Lease, Master Lease
                  and Other Documents recorded in the land records of Denver,
                  Colorado on July 11, 2001 under Reception No. 2001113101
                  ("Phase IV Ground Lease");

         (ii)     Master Lease Agreement dated as of November 10, 1998 by and
                  between Selco, as owner-lessor, and JDE LLC, as lessee,
                  together with Lease Supplement No. 1 dated as of November 10,
                  1998; as amended by First Amendment to Master Lease Agreement
                  and other Transaction

                                       1


                  Documents dated February 22, 1999; as further amended by
                  Amendment to Master Lease dated July 9, 1999; as further
                  amended by Amendment No. 2 to Master Lease Agreement dated
                  November 12, 1999; as further amended by Amendment to
                  Definitions Appendix dated as of August 31, 2000; and as
                  further amended by Amendment of Ground Lease, Master Lease and
                  Other Documents recorded in the land records of Denver,
                  Colorado on July 11, 2001 under Reception No. 2001113101
                  (collectively, the Phase IV Master Lease");

         (iii)    Memorandum of Ground Lease dated as of November 10, 1998 by
                  and between JDE LLC and Selco and recorded in the land records
                  of Denver, Colorado on November 10, 1998 under Reception No.
                  9800188464; as amended by Amendment of Ground Lease, Master
                  Lease and Other Documents recorded in the land records of
                  Denver, Colorado on July 11, 2001 under Reception No.
                  2001113101 (collectively, the "Phase IV Memorandum of Ground
                  Lease");

         (iv)     Memorandum of Lease (including Lease Supplement No. 1) dated
                  as of November 10, 1998 by and between JDE LLC and Selco and
                  recorded in the land records of Denver, Colorado on November
                  10, 1998 under Reception No. 9800188465; as amended by
                  Amendment of Ground Lease, Master Lease and Other Documents
                  recorded in the land records of Denver, Colorado on July 11,
                  2001 under Reception No. 2001113101 (collectively, the "Phase
                  IV Memorandum of Lease");

         (v)      Deed of Trust, Security Agreement and Fixture Financing
                  Statement dated as of November 10, 1998 from JDE LLC to the
                  Public Trustee in and for the City and County of Denver,
                  Colorado, for the benefit of Selco, and recorded in the land
                  records of Denver, Colorado on November 10, 1998 under
                  Reception No. 9800188463; as affected by Request to Release of
                  Deed of Trust and Release recorded in the land records of
                  Denver, Colorado on July 31, 2001 under Reception No.
                  2001125369 (collectively, the "Phase IV Deed of Trust");

         (vi)     Lessee Collateral Assignment and Security Agreement in Respect
                  of Contracts, Licenses and Permits dated as of November 10,
                  1998 from JDE LLC to Selco and recorded in the land records of
                  Denver, Colorado on November 10, 1998 under Reception No.
                  9800188470; as amended by Amendment of Ground Lease, Master
                  Lease and Other Documents recorded in the land records of
                  Denver, Colorado on July 11, 2001 under Reception No.
                  2001113101;

         (vii)    Recognition, Non-Disturbance and Attornment Agreement dated as
                  of November 10, 1998 by and between JDE LLC and KeyBank
                  National Association, a national banking association, as Agent
                  for itself and other Lenders, and recorded in the land records
                  of Denver, Colorado on November 10, 1998 under Reception No.
                  9800188471; as amended by

                                       2


                  Amendment of Ground Lease, Master Lease and Other Documents
                  recorded in the land records of Denver, Colorado on July 11,
                  2001 under Reception No. 2001113101; and

         (viii)   Subordination and Agreement Relative to Owner Deed of Trust
                  dated as of November 10, 1998 from JDE LLC in favor of Selco
                  and KeyBank National Association, a national banking
                  association, as Agent for the Lenders and recorded in the land
                  records of Denver, Colorado on November 10, 1998 under
                  Reception No. 9800188466; as amended by Amendment of Ground
                  Lease, Master Lease and Other Documents recorded in the land
                  records of Denver, Colorado on July 11, 2001 under Reception
                  No. 2001113101.

         4.       On this date, JDE LLC has assigned to PeopleSoft and
PeopleSoft has assumed from JDE LLC all of JDE LLC's rights and interest under
the Phase IV Ground Lease, the Phase IV Master Lease, and the other Phase IV
Financing Documents.

         5.       On this date, PeopleSoft has assumed, all of JDE LLC's
obligations and liabilities under the Phase IV Ground Lease, the Phase IV Master
Lease and the other Phase IV Financing Documents, while JDE LLC also remains
primarily liable thereunder as a principal and not as a surety.

         6.       Selco, JDE LLC, PeopleSoft desire to enter into this Agreement
for purposes of confirming, evidencing and effectuating such assignment and
assumption.

         Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Selco, JDE LLC and PeopleSoft
hereby agree as follows:

         (i)      Assignment. JDE LLC hereby transfers, assigns and conveys to
                  PeopleSoft all of JDE LLC's rights and interest in and to the
                  Phase IV Financing Documents, including without limitation,
                  all of JDE LLC's rights and interests under the Phase IV
                  Ground Lease and the Phase IV Master Lease. Notwithstanding
                  anything to the contrary herein, JDE LLC shall remain
                  primarily liable under the Phase IV Financing Documents (as a
                  principal and not as a surety).

         (ii)     Assumption. PeopleSoft hereby accepts and assumes all such
                  rights and interests assigned to it above and also hereby
                  accepts and assumes all past, current liabilities and
                  obligations, and joins in all representations, warranties and
                  indemnities of JDE LLC, under the Phase IV Financing
                  Documents, including without limitation, all liabilities and
                  obligations under the Phase IV Deed of Trust. Notwithstanding
                  anything to the contrary herein, the parties hereto agree and
                  acknowledge that nothing set forth in this Agreement or in any
                  of the other documents executed in connection herewith shall
                  constitute a release of JDE LLC from any of its liabilities or
                  obligations under the Phase IV Financing Documents, and

                                       3


                  that JDE LLC and PeopleSoft each shall be primarily liable
                  thereunder as principals and not as sureties.

         (iii)    JDE LLC has granted, conveyed, transferred, delivered,
                  assigned and set over unto the Public Trustee in and for the
                  City and County of Denver, Colorado as Trustee for the benefit
                  of Selco, the property described in the Phase IV Deed of
                  Trust. PeopleSoft hereby ratifies and confirms such grant,
                  conveyance, transfer, delivery, assignment and setting over.

         (iv)     As of the date of this Agreement, all references in the Phase
                  IV Financing Documents to J.D. Edwards or JDE LLC, or other
                  terms used therein which refer to J.D. Edwards or JDE LLC,
                  shall be deemed to mean and refer to PeopleSoft.

         (v)      The term "Lessee," as set forth in the Phase IV Memorandum of
                  Lease, shall mean PeopleSoft.

         (vi)     The term "Ground Landlord," as set forth in the Phase IV
                  Memorandum of Ground Lease, shall mean PeopleSoft.

         (vii)    Except as herein affected, the Phase IV Financing Documents
                  and all covenants, agreements, terms and conditions thereof
                  shall remain and continue in full force and effect and are
                  hereby in all respects ratified and confirmed.

         (viii)   The covenants, agreements, terms and conditions of this
                  Agreement shall bind and inure to the benefit to the parties
                  hereto and their respective permitted successors and assigns.

         (ix)     This Agreement shall not be changed orally, but only by
                  writing signed by the parties against whom enforcement thereof
                  is sought.

                                       4


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                              J.D. EDWARDS & COMPANY, LLC, a
                                              Delaware limited liability company

                                              By: /s/ Anne S. Jordan
                                                  ------------------------------
                                                  Name: Anne S. Jordan
                                                  Duly Authorized

                                              PEOPLESOFT, INC., a Delaware
                                              corporation

                                              By: /s/ Anne S. Jordan
                                                 -------------------------------
                                                 Name: Anne S. Jordan
                                                 Duly Authorized

                                              SELCO SERVICE CORPORATION, an
                                              Ohio corporation

                                              By: /s/ Donald C. Davis
                                                  ------------------------------
                                                  Name: Donald C. Davis
                                                  Duly Authorized

                                       5


         The following party hereby acknowledges the foregoing Agreement and the
terms thereof:

                                              KEYBANK NATIONAL ASSOCIATION,
                                              individually and as agent

                                              By: /s/ Thomas A. Crandell
                                                  ------------------------------
                                                  Name: Thomas A. Crandell
                                                  Title: Senior Vice President

[notary acknowledgements omitted]

                                       6

EX-10.5

                                                                         Phase I

                                                                    EXHIBIT 10.5

                    SECOND AMENDMENT TO DEFINITIONS APPENDIX

         This Second Amendment to Definitions Appendix ("Second Amendment") is
made as of the 30th day of September, 2003 by and among SELCO Service
Corporation, an Ohio corporation, ("SELCO"), PeopleSoft, Inc., a Delaware
corporation ("PeopleSoft"), and KeyBank National Association, a national banking
association, ("KeyBank").

         Reference is made to that certain Definitions Appendix, as amended
(collectively, the "Definitions Appendix") attached as Annex A to or referred to
or incorporated by reference by (i) that certain Master Lease Agreement dated as
of August 26, 1998, as amended (the "Master Lease") by and between SELCO, as
Owner-Lessor, and PeopleSoft, as Lessee; (ii) that certain Loan Agreement dated
as of August 26, 1998, as amended (the "Loan Agreement") by and among SELCO, as
Borrower, various financial institutions (collectively, "Lenders"), and KeyBank,
as Agent for the Lenders; and (iii) certain other Transaction Documents (as
defined in the Definitions Appendix).

         WHEREAS, the parties wish to amend the Definitions Appendix as more
particularly set forth below.

         NOW, THEREFORE, in consideration of the promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

         1. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Definitions Appendix.

         2.Effective as of September 23, 2003, the definition of "Fiscal
Quarter" set forth in the Definitions Appendix shall be amended to read as
follows: ""Fiscal Quarter" shall mean (a) until April 30, 2003, the three month
period beginning as of each November 1, February 1, May 1 and August 1; (b) from
May 1, 2003 to and including September 30, 2003, the period from May 1, 2003 to
and including September 30, 2003; and (c) after September 30, 2003, the three
month period beginning as of each October 1, January 1, April 1 and July 1."

         3.Effective as of the date hereof, the Definitions Appendix is hereby
amended by deleting the definition of "Marketable Securities" therein in its
entirety and inserting the following in lieu thereof: ""Marketable Securities"
shall have the meaning given to such term under GAAP."

         4. Except as herein specifically amended, the Definitions Appendix and
the other Transaction Documents shall remain and continue in full force and
effect in accordance with their terms and are hereby in all respects ratified
and confirmed.

Second Amendment to Definitions Appendix (Phase I)

                                       1


                                                                         Phase I

         5.The covenants, agreements, terms and conditions of this Second
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors.

         6. This Second Amendment shall not be changed orally, but only by a
writing signed by the party against whom enforcement thereof is sought.

         7. This Second Amendment may be executed in one or more counterparts,
which collectively will constitute only one instrument.

Second Amendment to Definitions Appendix (Phase I)

                                       2


                                                                         Phase I

         WITNESS our hands and seal as of the date first above written

KEYBANK NATIONAL ASSOCIATION                  SELCO SERVICE CORPORATION
as Lender and as Agent

By: /s/  Thomas A. Crandell                   By: /s/  Donald C. Davis
    -------------------------------------         ------------------------------
     Name: Thomas A. Crandell                     Name: Donald C. Davis
     Title: Senior Vice President                 Title: Vice President

PEOPLESOFT, INC.

By: /s/  Anne S. Jordan
    -------------------------------------
    Name: Anne S. Jordan
    Title: Senior Vice President,
    General Counsel and Secretary

Second Amendment to Definitions Appendix (Phase I)

                                       3

EX-10.6

                                                                    Phase II/III

                                                                    EXHIBIT 10.6

                    SECOND AMENDMENT TO DEFINITIONS APPENDIX

         This Second Amendment to Definitions Appendix ("Second Amendment") is
made as of the 30th day of September, 2003 by and among SELCO Service
Corporation, an Ohio corporation, ("SELCO"), PeopleSoft, Inc., a Delaware
corporation ("PeopleSoft"), and KeyBank National Association, a national banking
association, ("KeyBank").

         Reference is made to that certain Definitions Appendix, as amended
(collectively, the "Definitions Appendix") attached as Annex A to or referred to
or incorporated by reference by (i) that certain Master Lease Agreement dated as
of November 15, 1997, as amended (the "Master Lease") by and between SELCO, as
Owner-Lessor, and PeopleSoft, as Lessee; (ii) that certain Construction and Term
Loan Agreement dated as of November 15, 1997, as amended (the "Loan Agreement")
by and among SELCO, as Borrower,, and KeyBank, as Lender; and (iii) certain
other Transaction Documents (as defined in the Definitions Appendix).

         WHEREAS, the parties wish to amend the Definitions Appendix as more
particularly set forth below.

         NOW, THEREFORE, in consideration of the promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

         1. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Definitions Appendix.

         2. Effective as of September 23, 2003, the definition of "Fiscal
Quarter" set forth in the Definitions Appendix shall be amended to read as
follows: ""Fiscal Quarter" shall mean (a) until April 30, 2003, the three month
period beginning as of each November 1, February 1, May 1 and August 1; (b) from
May 1, 2003 to and including September 30, 2003, the period from May 1, 2003 to
and including September 30, 2003; and (c) after September 30, 2003, the three
month period beginning as of each October 1, January 1, April 1 and July 1."

         3. Effective as of the date hereof, the Definitions Appendix is hereby
amended by deleting the definition of "Marketable Securities" therein in its
entirety and inserting the following in lieu thereof: ""Marketable Securities"
shall have the meaning given to such term under GAAP."

         4. Except as herein specifically amended, the Definitions Appendix and
the other Transaction Documents shall remain and continue in full force and
effect in accordance with their terms and are hereby in all respects ratified
and confirmed.

Second Amendment to Definitions Appendix (Phase II/III)

                                       1


                                                                    Phase II/III

         5. The covenants, agreements, terms and conditions of this Second
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors.

         6. This Second Amendment shall not be changed orally, but only by a
writing signed by the party against whom enforcement thereof is sought.

         7. This Second Amendment may be executed in one or more counterparts,
which collectively will constitute only one instrument.

Second Amendment to Definitions Appendix (Phase II/III)

                                       2


                                                                    Phase II/III

         WITNESS our hands and seal as of the date first above written

KEYBANK NATIONAL ASSOCIATION                  SELCO SERVICE CORPORATION
as Lender and as Agent

By: /s/  Thomas A. Crandell                   By: /s/  Donald C. Davis
    --------------------------------------        ------------------------------
     Name: Thomas A. Crandell                     Name: Donald C. Davis
     Title: Senior Vice President                 Title: Vice President

PEOPLESOFT, INC.

By: /s/ Anne S. Jordan
    --------------------------------------
    Name: Anne S. Jordan
    Title: Senior Vice President,
    General Counsel and Secretary

Second Amendment to Definitions Appendix (Phase II/III)

                                        3

EX-10.7

                                                                        Phase IV

                                                                    EXHIBIT 10.7

                    SECOND AMENDMENT TO DEFINITIONS APPENDIX

         This Second Amendment to Definitions Appendix ("Second Amendment") is
made as of the 30th day of September, 2003 by and among SELCO Service
Corporation, an Ohio corporation, ("SELCO"), PeopleSoft, Inc., a Delaware
corporation ("PeopleSoft"), and KeyBank National Association, a national banking
association, ("KeyBank").

         Reference is made to that certain Definitions Appendix, as amended
(collectively, the "Definitions Appendix") attached as Annex A to or referred to
or incorporated by reference by (i) that certain Master Lease Agreement dated as
of November 10, 1998, as amended (the "Master Lease") by and between SELCO, as
Owner-Lessor, and PeopleSoft, as Lessee; (ii) that certain Loan Agreement dated
as of November 10, 1998, as amended (the "Loan Agreement") by and among SELCO,
as Borrower, various financial institutions (collectively, "Lenders"), and
KeyBank, as Agent for the Lenders; and (iii) certain other Transaction Documents
(as defined in the Definitions Appendix).

         WHEREAS, the parties wish to amend the Definitions Appendix as more
particularly set forth below.

         NOW, THEREFORE, in consideration of the promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

         1. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Definitions Appendix.

         2. Effective as of September 23, 2003, the definition of "Fiscal
Quarter" set forth in the Definitions Appendix shall be amended to read as
follows: ""Fiscal Quarter" shall mean (a) until April 30, 2003, the three month
period beginning as of each November 1, February 1, May 1 and August 1; (b) from
May 1, 2003 to and including September 30, 2003, the period from May 1, 2003 to
and including September 30, 2003; and (c) after September 30, 2003, the three
month period beginning as of each October 1, January 1, April 1 and July 1."

         3. Effective as of the date hereof, the Definitions Appendix is hereby
amended by deleting the definition of "Marketable Securities" therein in its
entirety and inserting the following in lieu thereof: ""Marketable Securities"
shall have the meaning given to such term under GAAP."

         4. Except as herein specifically amended, the Definitions Appendix and
the other Transaction Documents shall remain and continue in full force and
effect in accordance with their terms and are hereby in all respects ratified
and confirmed.

Second Amendment to Definitions Appendix (Phase IV)

                                       1


                                                                        Phase IV

         5. The covenants, agreements, terms and conditions of this Second
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors.

         6. This Second Amendment shall not be changed orally, but only by a
writing signed by the party against whom enforcement thereof is sought.

         7. This Second Amendment may be executed in one or more counterparts,
which collectively will constitute only one instrument.

Second Amendment to Definitions Appendix (Phase IV)

                                       2


                                                                        Phase IV

         WITNESS our hands and seal as of the date first above written

KEYBANK NATIONAL ASSOCIATION                  SELCO SERVICE CORPORATION
as Lender and as Agent

By: /s/  Thomas A. Crandell                   By: /s/  Donald C. Davis
    -------------------------------               ------------------------------
     Name: Thomas A. Crandell                     Name: Donald C. Davis
     Title: Senior Vice President                 Title: Vice President

PEOPLESOFT, INC.

By: /s/ Anne S. Jordan
    ------------------------------------
    Name: Anne S. Jordan
    Title: Senior Vice President,
    General Counsel and Secretary

Second Amendment to Definitions Appendix (Phase IV)

                                       3

EX-31.1

                                                                    Exhibit 31.1

                                  CERTIFICATION

I, Craig A. Conway, certify that:

      1.    I have reviewed this Quarterly Report on Form 10-Q for PeopleSoft,
            Inc.;

      2.    Based on my knowledge, this report does not contain any untrue
            statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this report, fairly present in all material
            respects the financial condition, results of operations and cash
            flows of the registrant as of, and for, the periods presented in
            this report;

      4.    The registrant's other certifying officer(s) and I are responsible
            for establishing and maintaining disclosure controls and procedures
            (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
            registrant and have:

                  (a) Designed such disclosure controls and procedures, or
                  caused such disclosure controls and procedures to be designed
                  under our supervision, to ensure that material information
                  relating to the registrant, including its consolidated
                  subsidiaries, is made known to us by others within those
                  entities, particularly during the period in which this report
                  is being prepared;

                  (b) Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

                  (c) Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

      5.    The registrant's other certifying officer(s) and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of the registrant's board of directors (or persons
            performing the equivalent functions):

                  (a) All significant deficiencies and material weaknesses in
                  the design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

                  (b) Any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal control over financial reporting.

Date: November 13, 2003


                                    /s/ Craig A. Conway
                                        ---------------------------
                                         Craig A. Conway
                                         President and Chief Executive Officer
                                         PeopleSoft, Inc.

EX-31.2

                                                                    Exhibit 31.2

                                  CERTIFICATION

I, Kevin T. Parker, certify that:

      1.    I have reviewed this Quarterly Report on Form 10-Q for PeopleSoft,
            Inc.;

      2.    Based on my knowledge, this report does not contain any untrue
            statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this report, fairly present in all material
            respects the financial condition, results of operations and cash
            flows of the registrant as of, and for, the periods presented in
            this report;

      4.    The registrant's other certifying officer(s) and I are responsible
            for establishing and maintaining disclosure controls and procedures
            (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
            registrant and have:

                  (a) Designed such disclosure controls and procedures, or
                  caused such disclosure controls and procedures to be designed
                  under our supervision, to ensure that material information
                  relating to the registrant, including its consolidated
                  subsidiaries, is made known to us by others within those
                  entities, particularly during the period in which this report
                  is being prepared;

                  (b) Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

                  (c) Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

      5.    The registrant's other certifying officer(s) and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of the registrant's board of directors (or persons
            performing the equivalent functions):

                  (a) All significant deficiencies and material weaknesses in
                  the design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

                  (b) Any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal control over financial reporting.

Date: November 13, 2003

                                            /s/ Kevin T. Parker
                                                -----------------------------
                                                Kevin T. Parker
                                                Executive Vice President
                                                Finance and Administration,
                                                Chief Financial Officer
                                                PeopleSoft, Inc.

EX-32.1

                                                                    EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of
PeopleSoft, Inc. (the "Company"), for purposes of 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on
his knowledge:

      -     the Quarterly Report of the Company on Form 10-Q for the period
            ended September 30, 2003 fully complies with the requirements of
            Section 13(a) of the Securities Exchange Act of 1934; and

      -     the information contained in such report fairly presents, in all
            material respects, the financial condition and results of operation
            of the Company.

Dated:  November 13, 2003


/s/ CRAIG A. CONWAY
- -------------------------
Craig A. Conway

President and Chief Executive Officer
PeopleSoft, Inc.


/s/ KEVIN T. PARKER
- ------------------------
Kevin T. Parker
Executive Vice President,
Finance and Administration,
Chief Financial Officer
PeopleSoft, Inc.