<PAGE>
SCHEDULE 14(A) INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] CONFIDENTIAL, FOR USE OF THE
[_] Preliminary Proxy Statement COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Oracle Corporation
-----------------------------------------------------
(Name of Registrant as Specified in its Charter)
Oracle Corporation
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF ORACLE APPEARS HERE]
500 ORACLE PARKWAY
REDWOOD CITY, CALIFORNIA 94065
September 4, 1997
To our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Oracle Corporation (the "Company"). The Annual Meeting will be held on Monday,
October 13, 1997, at 1:30 p.m., in the Grand Ballroom of the Hotel Sofitel,
located at 223 Twin Dolphin Drive, Redwood City, California.
The actions expected to be taken at the Annual Meeting are described in
detail in the attached Proxy Statement and Notice of Annual Meeting of
Stockholders.
Included with the Proxy Statement is a copy of the Company's Annual Report
on Form 10-K for fiscal year 1997. We encourage you to read the Form 10-K. It
includes information on the Company's operations, markets, products and
services, as well as the Company's audited financial statements.
Please use this opportunity to take part in the affairs of the Company by
voting on the business to come before this meeting. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Returning the proxy does NOT
deprive you of your right to attend the meeting and to vote your shares in
person for the matters acted upon at the meeting.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Lawrence J. Ellison
LAWRENCE J. ELLISON
Chairman of the Board and Chief
Executive Officer
<PAGE>
[LOGO OF ORACLE APPEARS HERE]
500 ORACLE PARKWAY
REDWOOD CITY, CALIFORNIA 94065
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To our Stockholders:
The Annual Meeting of Stockholders of the Company will be held on Monday,
October 13, 1997, at 1:30 p.m., in the Grand Ballroom of the Hotel Sofitel,
located at 223 Twin Dolphin Drive, Redwood City, California, for the following
purposes:
1. To elect a Board of Directors to serve for the ensuing year.
2. To approve the adoption of the Company's Executive Officers 1998 Bonus
Plan.
3. To ratify the appointment of Arthur Andersen LLP as independent public
accountants for the Company for the current fiscal year.
4. To transact any other business that may properly come before the meeting.
Stockholders of record at the close of business on August 29, 1997 will be
entitled to notice of and to vote at the Annual Meeting and at any
continuation or adjournment thereof.
By Order of the Board of Directors,
/s/ Daniel Cooperman
DANIEL COOPERMAN
Senior Vice President, General Counsel &
Secretary
Redwood City, California
September 4, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY STATEMENT
SEPTEMBER 4, 1997
The accompanying proxy is solicited on behalf of the Board of Directors (the
"Board") of Oracle Corporation, a Delaware corporation (the "Company"), for
use at the Annual Meeting of Stockholders of the Company (the "Annual
Meeting"). The Annual Meeting will be held on October 13, 1997, at 1:30 p.m.,
in the Grand Ballroom of the Hotel Sofitel, located at 223 Twin Dolphin Drive,
Redwood City, California. All holders of record of Common Stock, par value
$0.01 per share (the "Common Stock"), on August 29, 1997, the record date,
will be entitled to vote at the Annual Meeting. At the close of business on
the record date, the Company had 980,497,793 shares of Common Stock
outstanding and entitled to vote. A majority, 490,248,897, of these shares of
Common Stock will constitute a quorum for the transaction of business at the
Annual Meeting. This Proxy Statement, the accompanying proxy, and the
Company's Annual Report on Form 10-K were first mailed to stockholders on or
about September 4, 1997. The Company's Annual Report on Form 10-K contains the
information required by Rule 14a-3 of the Rules of the Securities and Exchange
Commission (the "SEC").
VOTING RIGHTS AND SOLICITATION OF PROXIES
Stockholders are entitled to one vote for each share of Common Stock held.
Shares of Common Stock may not be voted cumulatively.
Any person signing a proxy in the form accompanying this Proxy Statement has
the power to revoke it either before the meeting at which the matter voted by
proxy is acted upon or at the meeting before the vote on the matter. A proxy
may be revoked by a later proxy that is signed by the person who signed the
earlier proxy and presented at the meeting or by attendance at the meeting and
voting in person.
The expense of printing and mailing proxy material will be borne by the
Company. In addition to the solicitation of proxies by mail, solicitation may
be made by certain directors, officers, and other employees of the Company by
personal interview, telephone, or facsimile. No additional compensation will
be paid for such solicitation. The Company also has retained Corporate
Investor Communications, Inc. ("CIC") to assist in the solicitation of
proxies. CIC will receive a fee for such services of approximately $11,500
plus out-of-pocket expenses, which will be paid by the Company. The Company
will request brokers and nominees who hold shares of Common Stock in their
names to furnish proxy material to beneficial owners of the shares and will
reimburse such brokers and nominees for their reasonable expenses incurred in
forwarding solicitation materials to such beneficial owners.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, the stockholders will elect directors to hold office
until the next annual meeting of stockholders and until successors have been
duly elected and qualified or until any such director's earlier resignation or
removal. Shares represented by the accompanying proxy will be voted for the
election of the eight nominees recommended by the Board of Directors, unless
the proxy is marked in such a manner as to withhold authority to vote or as to
vote for one or more alternate candidates. If any nominee for any reason is
unable to serve or will not serve, the proxies may be voted for such
substitute nominee as the proxyholder may determine. The Company is not aware
of any nominee who will be unable to or for good cause will not serve as a
director.
DIRECTORS
The following incumbent directors are being nominated for re-election to the
Board: Lawrence J. Ellison, Donald L. Lucas, Michael J. Boskin, Raymond J.
Lane, Jeffrey O. Henley, Jack F. Kemp, Jeffrey Berg and Richard A. McGinn.
1
<PAGE>
REQUIRED VOTE
Directors are elected by a plurality of votes cast. Votes withheld and
broker non-votes are not counted toward a nominee's total.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF EACH OF THE NOMINATED DIRECTORS.
MR. ELLISON, 53, has been Chief Executive Officer and a director of the
Company since he co-founded the Company in May 1977, and was President of the
Company until June 1996. Mr. Ellison has been Chairman of the Board since June
1995 and was Chairman of the Board from April 1990 until September 1992. He
has been a member of the Executive Committee since 1986. Mr. Ellison is a
director of Apple Computer, Inc., a director of SuperGen, Inc., Co-Chairman of
California's Council on Information Technology, and a member of President
Clinton's Export Council.
MR. LUCAS, 67, has been a director of the Company since March 1980. He has
been Chairman of the Executive Committee since 1986 and Chairman of the
Finance and Audit Committee since 1987. Mr. Lucas has been a member of the
Compensation Committee since 1989 and a member of the Nominating Committee
since December 1996. He was Chairman of the Board from October 1980 through
March 1990. He has been a venture capitalist since 1960. He is also a director
of Cadence Design Systems, Inc., Amati Communications Corporation, Coulter
Pharmaceutical, Inc., Macromedia, Inc., Racotek, Inc., Transcend Services,
Inc. and Tricord Systems, Inc.
DR. BOSKIN, 51, has been a director of the Company since May 1994. He has
been a member of the Finance and Audit Committee and the Nominating Committee
since July 1994 and a member of the Compensation Committee since July 1995. He
was appointed Chairman of the Compensation Committee in July 1997. Dr. Boskin
has been a professor of economics at Stanford University since 1971 and
principal of Boskin & Co., a consulting firm, since 1980. He was Chairman of
the President's Council of Economic Advisers from February 1989 until January
1993. Dr. Boskin is also a director of Exxon Corporation, HealthCare COMPARE
Corp. and Airtouch Communications, Inc.
MR. LANE, 50, has been President and Chief Operating Officer since July
1996. Mr. Lane served as Executive Vice President of the Company and President
of Worldwide Operations from October 1993 to June 1996, and has been a
director since June 1995. He served as a Senior Vice President of the Company
and President of Oracle USA from June 1992 to September 1993. Before joining
Oracle, Mr. Lane was a Senior Vice President and Managing Partner of the
Worldwide Information Services Group at Booz-Allen & Hamilton from July 1986
to May 1992. He served on the Booz-Allen & Hamilton Executive Committee from
April 1987 to May 1992, and on its Board of Directors from April 1991 to May
1992. Mr. Lane is also a member of the Board of Trustees of Carnegie-Mellon
University.
MR. HENLEY, 52, has been Executive Vice President and Chief Financial
Officer of the Company since March 1991 and has been a director since June
1995. Prior to joining Oracle, he served as Executive Vice President and Chief
Financial Officer of Pacific Holding Company, a privately-held company with
diversified interests in manufacturing and real estate, from August 1986 to
February 1991. Mr. Henley is also a director of Tricord Systems, Inc.
MR. KEMP, 62, has been a director of the Company since February 1997 and
previously served as a director of the Company from February 1995 until
September 1996. Mr. Kemp has been Co-Director of Empower America from 1993 to
the present. Mr. Kemp was the Secretary of Housing and Urban Development from
February 1989 until January 1992. Mr. Kemp is also a director of American
Bankers Insurance Group, Inc., Carson, Inc., Everen Capital Corporation, and
The Sports Authority, Inc.
2
<PAGE>
MR. BERG, 50, has been a director of the Company since March 1997. He has
been a member of the Finance and Audit Committee since April 1997. Mr. Berg
has been an agent in the entertainment industry for over 25 years and the
Chairman and Chief Executive Officer of International Creative Management,
Inc. since 1985. He served as Co-Chair of the California Information
Technology Council and was President of the Executive Board of the College of
Letters and Sciences at the University of California at Berkeley. He is
presently a member of the Board of Visitors of the Anderson Graduate School of
Management and the Board of Trustees of the American Film Institute.
MR. MCGINN, 50, has been a director of the Company since March 1997. Mr.
McGinn has been President and Chief Operating Officer of Lucent Technologies
since February 1996 and a director since April 1997. Lucent Technologies is
the communications and technology company that was spun off from AT&T in April
1996. Mr. McGinn served as Executive Vice President of AT&T and Chief
Executive Officer of AT&T Network Systems from October 1994 to April 1996. He
served as President and Chief Operating Officer of AT&T Network Systems from
August 1993 to October 1994 and as a Senior Vice President from August 1992 to
August 1993.
DIRECTOR COMPENSATION
The Company currently pays Messrs. Kemp, Berg and McGinn an annual retainer
of $30,000. Dr. Boskin currently is paid an annual retainer of $60,000 and Mr.
Lucas currently is paid an annual retainer of $120,000 in connection with
their additional board duties. Non-employee members of the Board also receive
directors' fees of (1) $1,000 for each regularly scheduled Board meeting
attended, (2) $3,000 for each meeting of the Finance and Audit Committee
attended, and (3) $2,000 per day for each special meeting or committee meeting
attended. Non-employee members of the Board also participate in the Company's
1993 Directors' Stock Option Plan, which provides for the following grants of
options to purchase Common Stock of the Company to non-employee members of the
Board: options to purchase 50,000 shares of Common Stock as of the date an
individual becomes a non-employee director; options to purchase 18,000 shares
of Common Stock on May 31 of each year provided such director has served on
the Board for at least six months; and in lieu of the latter option grant,
options to purchase 40,000 shares of Common Stock on May 31 of each year to
the director (or directors) who serves as chairman of either the Executive
Committee or the Finance and Audit Committee (or both) provided such director
has served in such capacity for at least one year and options to purchase
25,000 shares of Common Stock on May 31 of each year to the director who
serves as chairman of the Compensation Committee provided such director has
served in such capacity for at least one year (except that the one year
requirement shall not apply with respect to the current chairman of the
Compensation Committee for the May 1998 grant). Messrs. Ellison, Lane and
Henley are employees of the Company and are not separately compensated as
directors of the Company.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors met four times at regularly scheduled meetings and
three times at special meetings during fiscal year 1997 and during that same
period acted eleven times by unanimous written consent. Standing committees of
the Board currently include, among others, an Executive Committee, a Finance
and Audit Committee, a Compensation Committee and a Nominating Committee. Each
incumbent director has attended at least 75% of all Board meetings and
applicable committee meetings, except Mr. McGinn, who attended one of two
Board meetings since joining the Board in March 1997 and Mr. Ellison who
attended three of four regularly scheduled Board meetings and one of three
special Board meetings.
Messrs. Ellison, Lucas and Henley are presently the members of the Executive
Committee. The Executive Committee did not meet during fiscal year 1997, and
during that same period acted four times by unanimous written consent. Unless
otherwise determined by the Board, the Executive Committee is generally vested
with all the powers of the Board of Directors, except that the Executive
Committee cannot take action beyond certain financial limits, liquidate the
Company, sell all or substantially all of the Company's assets, merge the
Company with another company where the Company is not the surviving entity, or
take any other action not permitted to be delegated to a committee under
Delaware law or the Company's Bylaws.
3
<PAGE>
Messrs. Lucas and Berg and Dr. Boskin are presently the members of the
Finance and Audit Committee. The Finance and Audit Committee met four times
during fiscal year 1997. The function of the Finance and Audit Committee is to
review financial and auditing issues of the Company, including the Company's
choice of independent public accounting firms, and to make recommendations to
the Board of Directors.
Messrs. Lucas and Dr. Boskin are presently the members of the Compensation
Committee. The Compensation Committee met two times during fiscal year 1997,
and during that same period acted twenty-nine times by unanimous written
consent. The function of the Compensation Committee is to review and set the
compensation of the Company's Chief Executive Officer and certain of its most
highly compensated officers, including salary, bonuses and other incentive
plans, stock options, and other forms of compensation, and to administer the
Company's stock plans.
Dr. Boskin and Mr. Lucas are presently the members of the Nominating
Committee. The Nominating Committee met once during fiscal year 1997, and
during the same period acted two times by unanimous written consent. The
function of the Nominating Committee is to recommend qualified candidates for
election as officers and directors of the Company. Stockholders wishing to
recommend candidates for consideration by the Nominating Committee may do so
by writing to the Secretary of the Company and providing the candidate's name,
biographical data and qualifications.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of August 29, 1997,
with respect to the beneficial ownership of the Company's Common Stock by: (i)
each stockholder known by the Company to be the beneficial owner of more than
5% of the Company's Common Stock; (ii) each director; (iii) each executive
officer named in the Summary Compensation Table; and (iv) all current
executive officers and directors as a group.
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS
------------------------------------ ----------------------- -------
<S> <C> <C>
Lawrence J. Ellison(2)
500 Oracle Parkway, Redwood City, CA 94065.. 227,036,467 23.0%
Jeffrey O. Henley(3)........................ 1,776,090 *
Raymond J. Lane(4).......................... 1,766,995 *
Donald L. Lucas(5).......................... 197,813 *
David J. Roux(6)............................ 192,793 *
Michael J. Boskin(7)........................ 82,687 *
Jack Kemp................................... 19,983 *
Robert W. Shaw(8)........................... 953 *
Jeffrey Berg................................ 0 0
Richard A. McGinn........................... 0 0
All current executive officers and directors
as a group (12 persons)(9)................. 231,095,131 23.3%
</TABLE>
- --------
* Less than 1%
(1) Unless otherwise indicated below, each person listed had sole voting and
sole investment power with respect to all shares beneficially owned,
subject to community property laws where applicable.
(2) Includes 6,564,000 shares subject to currently exercisable options or
options exercisable within 60 days.
(3) Includes 1,771,875 shares subject to currently exercisable options or
options exercisable within 60 days.
(4) Includes 1,749,005 shares subject to currently exercisable options or
options exercisable within 60 days.
(5) Includes 22,500 shares owned of record by Mr. Lucas or his successor
trustee under a trust agreement for the benefit of Mr. Lucas and his wife.
Includes 175,313 shares subject to currently exercisable options or
options exercisable within 60 days.
(6) Includes 189,375 shares subject to currently exercisable options or
options exercisable within 60 days.
(7) Includes 82,687 shares subject to currently exercisable options or options
exercisable within 60 days.
(8) Includes 2 shares subject to currently exercisable options or options
exercisable within 60 days.
(9) Includes all shares described in notes (2)-(8) above and 17,016 additional
shares subject to currently exercisable options or options exercisable
within 60 days.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid by the Company to the Company's Chief Executive Officer and
each of the four other most highly compensated executive officers of the
Company (determined as of May 31, 1997) (hereinafter referred to as the "named
executive officers") for the fiscal years ended May 31, 1997, 1996, and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
NAME AND PRINCIPAL -------------------------- OTHER ANNUAL OPTIONS/SARs(1)
POSITION YEAR SALARY ($) BONUS ($) COMPENSATION (#)
------------------ ---- ---------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Lawrence J. Ellison.......... 1997 $ 999,985 $1,850,000 $ 0 2,400,000
Chairman and 1996 $1,000,007 $1,330,875 $ 0 1,050,000
Chief Executive Officer 1995 $1,099,992 $2,243,098 $ 0 1,012,500
Raymond J. Lane.............. 1997 $ 883,334 $1,395,000 $ 0 4,125,000
President and Chief 1996 $ 700,008 $ 825,119 $ 0 525,000
Operating Officer 1995 $ 700,008 $1,427,426 $ 0 506,250
Jeffrey O. Henley............ 1997 $ 591,666 $ 852,000 $ 0 825,000
Executive Vice President 1996 $ 499,992 $ 588,656 $ 0 525,000
and Chief Financial Officer 1995 $ 499,992 $1,019,590 $ 0 506,250
Robert W. Shaw............... 1997 $ 525,600 $ 511,710 $ 0 375,000
Executive Vice President, 1996 $ 405,600 $ 466,377 $ 0 262,500
Worldwide Consulting 1995 $ 345,600 $ 279,213 $ 0 101,244
Services and Vertical
Markets
David J. Roux................ 1997 $ 372,916 $ 465,000 $ 0 0
Executive Vice President, 1996 $ 349,992 $ 350,000 $90,881(2) 75,000
Corporate Development 1995 $ 240,058 $ 250,000 $ 0 337,500
</TABLE>
- --------
(1) All figures in this column reflect options to purchase common stock and
adjustments, to the extent applicable, for three 3-for-2 stock splits
effective February 22, 1995, April 16, 1996 and August 15, 1997,
respectively.
(2) Consists of relocation expenses.
6
<PAGE>
STOCK OPTIONS
The following table sets forth information concerning the grant of stock
options to each of the named executive officers in fiscal year 1997:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS/SARs ASSUMED ANNUAL RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR OPTION TERM
UNDERLYING EMPLOYEES IN EXERCISE OR -----------------------------------
OPTIONS/SARs FISCAL YEAR BASE PRICE EXPIRATION
NAME GRANTED(1) 1997 ($/SH) DATE 5%($) 10%($)
---- ------------ ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence J. Ellison..... 150,000(2) 0.90% $25.42 7/26/06 $ 2,397,664 $ 6,076,151
2,250,000(3) 13.45% $27.67 1/19/07 $39,148,738 $ 99,210,588
Raymond J. Lane......... 375,000(2) 2.24% $25.42 7/26/06 $ 5,994,160 $ 15,190,378
3,750,000(3) 22.41% $27.67 1/19/07 $65,247,896 $165,350,979
Jeffrey O. Henley....... 75,000(2) 0.45% $25.42 7/26/06 $ 1,198,832 $ 3,038,076
750,000(3) 4.48% $27.67 1/19/07 $13,049,579 $ 33,070,196
Robert W. Shaw.......... 375,000(3) 2.24% $27.67 1/19/07 $ 6,524,790 $ 16,535,098
David J. Roux........... 0 0 0 0 0 0
</TABLE>
- --------
(1) Each option granted vests at the rate of 25% per annum. Options will
become immediately exercisable if 50% of the voting stock of the Company
is acquired in a transaction or series of transactions expressly
disapproved by the Board. Each option was granted under the Company's 1991
Long-Term Equity Incentive Plan and has an exercise price equal to the
fair market value of the Common Stock on the date of grant.
(2) Each of the indicated options was granted on July 26, 1996 and reflects
the 3-for-2 stock split effective August 15, 1997.
(3) Each of the indicated options was granted on January 19, 1997 and reflects
the 3-for-2 stock split effective August 15, 1997.
The following table sets forth information with respect to the named
executive officers concerning exercises of options during fiscal year 1997 and
unexercised options held as of the end of fiscal year 1997 and reflects the 3-
for-2 stock split effective August 15, 1997:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-
VALUE OPTIONS/SARs AT FISCAL THE-MONEY OPTIONS/SARs AT
SHARES ACQUIRED REALIZED YEAR-END (#) FISCAL YEAR-END ($)
NAME ON EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- ---------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Lawrence J. Ellison..... 0 $ 0 6,526,500/3,862,500 $ 173,821,973/$27,127,903
Raymond J. Lane(1)...... 267,843 $6,743,427 1,655,255/5,025,001 $ 35,941,792/$27,771,581
Jeffrey O. Henley....... 225,000 $6,314,571 1,903,125/1,556,251 $ 46,472,80/$12,282,742
Robert W. Shaw.......... 222,183 $4,285,994 37,500/ 664,685 $ 318,745/$ 5,553,128
David J. Roux........... 45,000 $ 758,336 142,500/ 225,000 $ 2,386,667/$ 3,528,124
</TABLE>
- --------
(1) 189,843 shares with a value realized of $4,715,662 were exercised pursuant
to a divorce decree for the benefit of Mr. Lane's former spouse.
TERMINATION OF EMPLOYMENT ARRANGEMENTS
Mr. Roux has an agreement with the Company that provides him with up to
twelve months salary of $29,166.67 per month if his employment is terminated
without cause and he has not obtained other employment.
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Mr. Lucas and Dr. Boskin.
No member of the Compensation Committee was an officer or employee of the
Company or any of its subsidiaries during fiscal year 1997. None of the
executive officers of the Company has served on the board of directors or on
the compensation committee of any other entity, any of whose officers served
either on the Board of Directors or on the Compensation Committee of the
Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 (the "Exchange Act") that might incorporate this Proxy
Statement or future filings with the Securities and Exchange Commission, in
whole or in part, the following report and the Performance Graph which follows
shall not be deemed to be incorporated by reference into any such filing.
Membership and Role of the Compensation Committee
The Compensation Committee (the "Committee") consists of the following non-
employee members of the Company's Board of Directors: Donald L. Lucas and
Michael J. Boskin.
The Committee reviews and determines the Company's executive compensation
objectives and policies and administers the Company's stock plans. The
Committee reviews and sets the compensation of the Company's Chief Executive
Officer and the four most highly compensated executive officers other than the
Chief Executive Officer.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), places a limit of $1,000,000 on the amount of compensation that may
be deducted by the Company in any year with respect to certain of the
Company's highest paid executives. Certain performance based compensation that
has been approved by stockholders is not subject to the deduction limit. The
Company intends to qualify certain compensation paid to executive officers for
deductibility under the Code, including Section 162(m). However, the Company
may from time to time pay compensation to its executive officers that may not
be deductible.
Executive Compensation Program
OBJECTIVES
The objectives of the Company's executive compensation program are to:
-- Attract and retain highly talented and productive executives.
-- Provide incentives for superior performance by paying above-average
compensation.
-- Align the interests of executive officers with the interests of the
Company's stockholders by basing a significant portion of compensation
upon the Company's performance.
COMPONENTS
The Company's executive compensation program combines the following three
components, in addition to the benefit plans offered to all employees: base
salary; annual bonus; and long-term incentive compensation consisting of stock
option grants.
It is the Company's policy to set base salary levels, annual bonuses and
long-term incentive compensation above an average of select corporations to
which the Company compares its executive compensation. The
8
<PAGE>
Company selects such corporations on the basis of a number of factors, such as
their size and complexity, the nature of their businesses, the regions in
which they operate, the structure of their compensation programs (including
the extent to which they rely on bonuses and other contingent compensation)
and the availability of compensation information. The corporations against
which the Company compares its compensation are not necessarily those included
in the indices used to compare the stockholder return in the Stock Performance
Chart. Further, the corporations selected for such comparison may vary from
year to year based upon market conditions and changes in both the Company's
and the corporations' businesses over time. The Company believes that above-
average compensation levels are necessary to attract and retain high caliber
executives necessary for the successful conduct of the Company's business.
Each component of the Company's executive compensation program serves a
specific purpose in meeting the Company's objectives. The components of the
Company's executive compensation program are described below, except for any
limitations arising from certain provisions of employment agreements that the
Company enters into upon hiring an executive.
Base salary. The Committee annually reviews the salaries of the Company's
executives. When setting base salary levels, in a manner consistent with the
objectives outlined above, the Committee considers competitive market
conditions for executive compensation, Company performance and individual
performance.
The measures of individual performance considered in setting fiscal year
1997 salaries included, to the extent applicable to an individual executive
officer, a number of quantitative and qualitative factors such as the
Company's historical and recent financial performance in the principal area of
responsibility of the officer (including such measures as gross margin, net
income, sales, customer count and market share), the individual's progress
toward non-financial goals within his area of responsibility, individual
performance, experience and level of responsibility and other contributions
made to the Company's success. The Committee has not found it practicable, nor
has it attempted, to assign relative weights to the specific factors used in
determining base salary levels, and the specific factors used may vary among
individual officers. As is typical for most corporations, payment of base
salary is not conditioned upon the achievement of any specific, pre-determined
performance targets.
Annual bonus. The Company's cash bonus program seeks to motivate executives
to work effectively to achieve the Company's financial performance objectives
and to reward them when objectives are met. Executive bonus payments for
Messrs. Ellison, Lane, Henley and Roux are based upon earnings per share and
revenue growth and are increased or decreased if the Company's revenue growth
changes in relation to the revenue growth of one or more of the Company's
competitors designated by the Committee. The executive bonus payment for Mr.
Shaw is based upon certain components of the Company's revenues and margins.
Long-term incentive compensation. The Company believes that option grants
(1) align executive interests with stockholder interests by creating a direct
link between compensation and stockholder return, (2) give executives a
significant, long-term interest in the Company's success, and (3) help retain
key executives in a competitive market for executive talent.
The Company's 1990 Executive Officers Stock Option Plan and 1991 Long-Term
Equity Incentive Plan authorize the Committee to grant stock options to
executives. Option grants are made from time to time to executives whose
contributions have or will have a significant impact on the Company's long-
term performance. The Company's determination of whether option grants are
appropriate each year is based upon individual performance measures
established for each individual. Options are not necessarily granted to each
executive during each year. Generally, options granted to executive officers
vest in equal annual installments over a period of four years and expire ten
years from the date of grant.
Benefits. The Company believes that it must offer a competitive benefit
program to attract and retain key executives.
During fiscal year 1997 the Company provided medical and other benefits to
its executive officers that are generally available to the Company's other
employees.
9
<PAGE>
Compensation of the Chief Executive Officer. The Chief Executive Officer's
compensation plan includes the same elements and performance measures as the
plans of the Company's other executive officers.
Mr. Ellison's salary for fiscal year 1997, as compared to fiscal year 1996,
effectively remained unchanged and his bonus for fiscal year 1997 increased
39% compared to the previous fiscal year. The increase in Mr. Ellison's bonus
reflects the application of the fiscal year 1997 bonus plans, as adopted by
the stockholders of the Company on October 14, 1996, to the Company's results
for fiscal year 1997.
Submitted by: Michael J. Boskin
Donald L. Lucas
STOCK PERFORMANCE CHART
The graph below compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total return on the Standard &
Poor's 500 Index and the Hambrecht & Quist ("H&Q") Technology Index for the
five fiscal years commencing May 31, 1992 and ending May 31, 1997, assuming an
investment of $100 and the reinvestment of any dividends.
The comparisons in the graph below are based upon historical data and are
not indicative of, nor intended to forecast, future performance of the
Company's Common Stock.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ORACLE CORPORATION, THE S & P 500 INDEX
AND THE HAMBRECHT & QUIST TECHNOLOGY INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period ORACLE S&P H&Q TECH.
(Fiscal Year Covered) CORPORATION 500 INDEX INDEX
- ------------------- ----------- --------- --------
<S> <C> <C> <C>
Measurement Pt- 5/31/92 $ 100 $100 $100
FYE 5/31/93 $ 281 $112 $128
FYE 5/31/94 $ 461 $116 $138
FYE 5/31/95 $ 701 $140 $204
FYE 5/31/96 $1,002 $180 $288
FYE 5/31/97 $1,411 $232 $345
</TABLE>
* $100 INVESTED ON 5/31/92 IN STOCK OR INDEX INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING MAY 31.
10
<PAGE>
TRANSACTIONS AND LEGAL ACTIONS INVOLVING MANAGEMENT
From June 1, 1996 to the present, there have been no transactions between
the Company and any executive officer, director, 5% beneficial owner of the
Company's Common Stock, or member of the immediate family of the foregoing
persons in which one of the foregoing individuals or entities had an interest
of more than $60,000, except for the following:
As previously announced, the Company develops and licenses software products
which may be used with a computer manufactured by nCUBE, a manufacturer of
massively-parallel supercomputers. Mr. Ellison owns a controlling interest in
nCUBE. During fiscal year 1997, the Company purchased from nCUBE approximately
$20,000 of computer equipment and maintenance and related services. The
Company has loaned nCUBE certain computer hardware (used primarily to
facilitate communications between the Company and nCUBE and for development
work requested by the Company) and nCUBE has loaned certain computer hardware
to the Company. In prior fiscal years, in exchange for software development
services rendered by the Company for the nCUBE operating system valued at
approximately $1 million, the Company received from nCUBE certain computer
hardware equipment valued at approximately the same amount. The Company has
also entered into a reseller agreement with nCUBE entitling nCUBE to
distribute certain software which the Company has a license to distribute. The
Company also has entered into a consulting services agreement with nSOF
Parallel Software, Ltd., in which Mr. Ellison owns a controlling interest.
During fiscal year 1997, the Company leased an aircraft from Tentacle
Corporation and Joubini Aviation, Inc., both of which are owned by Mr.
Ellison. The aggregate amount paid to these entities for use of the aircraft
in fiscal year 1997 was $224,675. The Company believes that the amounts paid
for the use of the aircraft and the pilots are within the range charged by
third party commercial charter companies for the same model aircraft.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than 10% of the Company's Common Stock
(collectively, "Reporting Persons") to file reports of ownership and changes
in ownership with the SEC and NASDAQ. Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received or written
representations from Reporting Persons, the Company believes that with respect
to the fiscal year ended May 31, 1997, all the Reporting Persons complied with
all applicable filing requirements except that Mr. Kemp made one late filing
relating to certain gifts of shares.
11
<PAGE>
PROPOSAL NO. 2
ADOPTION OF THE EXECUTIVE OFFICERS 1998 BONUS PLAN
On July 14, 1997, August 26, 1997, August 27, 1997 and September 2, 1997,
the Compensation Committee unanimously approved the adoption of the Executive
Officers 1998 Bonus Plan (the "Bonus Plan"), and the Board directed that the
Bonus Plan be submitted to the stockholders at the 1997 Annual Meeting.
Targets set at the July 14, 1997, August 26, 1997, August 27, 1997 and
September 2, 1997 meetings for the applicable performance period shall be null
and void and no payments pursuant thereto may be made if the Bonus Plan is not
approved by the stockholders of the Company.
The purpose of the Bonus Plan is to motivate executives to achieve the
Company's financial performance objectives and to reward them when those
objectives are met.
REQUIRED VOTE
Approval of the adoption of the Executive Officers 1998 Bonus Plan requires
the affirmative vote of the holders of a majority of shares of Common Stock
present or represented and entitled to vote at the Annual Meeting. Abstentions
and broker non-votes will be counted as present for purposes of determining
whether a quorum is present, and broker non-votes will not be treated as
entitled to vote on this matter at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF ADOPTION OF THE EXECUTIVE OFFICERS 1998 BONUS PLAN.
DESCRIPTION OF THE EXECUTIVE OFFICERS 1998 BONUS PLAN
HISTORY. The Compensation Committee (the "Committee") approved the adoption
of the Executive Officers 1998 Bonus Plan (the "Bonus Plan") at meetings held
on July 14, 1997, August 26, 1997, August 27, 1997 and September 2, 1997.
PURPOSE. The purpose of the Bonus Plan is to motivate executives to achieve
the Company's financial performance objectives and to reward them when those
objectives are met.
ADMINISTRATION. The Bonus Plan will be administered by the Committee
consisting of no fewer than two members of the Board, all of which members
qualify as "outside directors" within the meaning of Section 162(m) of the
Internal Revenue Code ("Code Section 162(m)").
ELIGIBILITY. Participants in the Bonus Plan are chosen solely at the
discretion of the Committee. All officers of the Company are eligible to
participate in the Bonus Plan. No person is automatically entitled to
participate in the Bonus Plan in any plan year.
DETERMINATION OF AWARDS. Under the Bonus Plan, participants will be eligible
to receive awards based upon the attainment and certification of performance
criteria established by the Committee. Mr. Ellison will receive a bonus of
$200,000 if the Company reports a profit for its 1998 fiscal year. As an
additional part of the Bonus Plan, Messrs. Ellison, Lane, Henley and Roux will
receive awards based upon the Company's earnings per share and revenue growth.
Mr. Shaw will receive an award based upon certain components of the Company's
revenues and margins. Such awards will be based upon the Company's level of
achievement of the foregoing performance criteria and will consist of a
percentage of base salary (including, in Mr. Ellison's case, the profitability
bonus, if any, described above) tied to a matrix of the Company's performance
criteria. The Committee adopts the performance criteria within 90 days after
the start of each fiscal year or in advance of such other date as may be
permitted under Code Section 162(m). The Committee also adopts at the same
time a mathematical formula for the fiscal year which is applied to either
reduce or increase an award if the Company's
12
<PAGE>
revenue growth changes in relation to the revenue growth of one or more of the
Company's competitors designated by the Committee. With respect to the
Company's current fiscal year, such determinations were made by the Committee
at meetings held on July 14, 1997, August 26, 1997, August 27, 1997 and
September 2, 1997. The details of the formula have not been included in this
Proxy Statement due to the Compensation Committee's belief that the
information that has not been disclosed includes confidential commercial or
business information disclosure of which would adversely affect the Company.
In order for participants to achieve a comparable bonus percentage of base
salary as was awarded in fiscal year 1997, the Company will have to
substantially outperform its fiscal year 1998 budget and/or outperform the
revenue growth of one or more of selected key competitors.
PAYMENT OF AWARDS. All awards will be paid in cash as soon as is practicable
following determination of the award, unless the Committee has, prior to the
grant of an award, received and approved, in its sole discretion, a request by
a participant to defer receipt of an award in accordance with the Bonus Plan.
ESTIMATE OF BENEFITS. The amounts that will be paid pursuant to the Bonus
Plan are not currently determinable. The maximum bonus payment that any
executive officer could receive under the Bonus Plan would be four times his
base salary (including in Mr. Ellison's case, the profitability bonus, if
any). In the past three fiscal years, which was a period of strong economic
performance by the Company, the Chief Executive Officer's bonus payments have
ranged from 133% to 205% of base compensation. For the 1998 fiscal year, the
most highly paid executive officer's base compensation for this purpose is
$1,200,000.
AMENDMENT AND TERMINATION. The Committee may terminate the Bonus Plan, in
whole or in part, may suspend the Bonus Plan, in whole or in part from time to
time, and may amend the Bonus Plan from time to time, including the adoption
of amendments deemed necessary or desirable to correct any defect or supply
omitted data or reconcile any inconsistency in the Bonus Plan or in any award
granted thereunder so long as stockholder approval has been obtained if
required in order for awards under the Bonus Plan to qualify as "performance-
based compensation" under Code Section 162(m). No amendment, termination, or
modification of the Bonus Plan may in any manner affect awards theretofore
granted without the consent of the participant unless the Committee has made a
determination that an amendment or modification is in the best interests of
all persons to whom awards have been previously granted, but in no event may
such amendment or modification result in an increase in the amount of
compensation payable pursuant to such award.
TERMINATION OF EMPLOYMENT. Should the participant's employment with the
Company terminate for any reason during the plan year, the participant will
not be eligible to receive an award under the Bonus Plan.
FEDERAL INCOME TAX CONSEQUENCES. Under present federal income tax law,
participants will realize ordinary income equal to the amount of the award
received in the year of receipt. That income will be subject to applicable
income and employment tax withholding by the Company. The Company will receive
a deduction for the amount constituting ordinary income to the participant,
provided that the Bonus Plan satisfies the requirements of Code Section
162(m), which limits the deductibility of nonperformance-related compensation
paid to certain corporate executives (and otherwise satisfies the requirements
for deductibility under federal income tax law).
13
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company has engaged Arthur Andersen LLP as its principal independent
public accountants to perform the audit of the Company's financial statements
for fiscal year 1998. Arthur Andersen LLP has audited the Company's financial
statements for its last ten fiscal years. The Board of Directors expects that
representatives of Arthur Andersen LLP will be present at the Annual Meeting,
will be given an opportunity to make a statement at the meeting if they desire
to do so, and will be available to respond to appropriate questions.
REQUIRED VOTE
The ratification of the selection of Arthur Andersen LLP requires the
affirmative vote of the holders of a majority of shares of Common Stock
present or represented and entitled to vote at the Annual Meeting. Abstentions
and broker non-votes will be counted as present for purposes of determining
whether a quorum is present, and broker non-votes will not be treated as
entitled to vote on this matter at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the Company's Proxy Statement and
form of proxy relating to the Company's 1998 Annual Meeting of Stockholders
must be received by May 7, 1998. Stockholder proposals should be addressed to
Daniel Cooperman, Senior Vice President, General Counsel and Secretary, Oracle
Corporation, Mailstop 5op7, Redwood City, California 94065.
OTHER BUSINESS
The Board of Directors does not presently intend to bring any other business
before the meeting, and, so far as is known to the Board of Directors, no
matters are to be brought before the meeting except as specified in the notice
of the meeting. As to any business that may properly come before the meeting,
however, it is intended that proxies, in the form enclosed, will be voted in
respect thereof in accordance with the judgment of the persons voting such
proxies.
By Order of the Board of Directors,
/s/ Daniel Cooperman
DANIEL COOPERMAN
Senior Vice President,
General Counsel & Secretary
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THANK YOU FOR
YOUR PROMPT ATTENTION TO THIS MATTER.
14
<PAGE>
4290-PS97
[RECYCLED PAPER LOGO APPEARS AT BOTTOM OF PAGE]
<PAGE>
ORACLE CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 13, 1997
The undersigned hereby appoints LAWRENCE J. ELLISON, RAYMOND J. LANE and
JEFFREY O. HENLEY, or any of them, each with power of substitution, as proxies
to represent the undersigned at the Annual Meeting of Stockholders of ORACLE
CORPORATION, to be held on Monday, October 13, 1997, at 1:30 p.m., in the Grand
Ballroom of the Hotel Sofitel, 223 Twin Dolphin Drive, Redwood City, California,
and any adjournment thereof, and to vote the number of shares the undersigned
would be entitled to vote if personally present on the following matters set
forth on the reverse side.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL
BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED
FOR THE EIGHT NOMINEES FOR ELECTION, TO APPROVE THE ADOPTION OF THE EXECUTIVE
OFFICERS 1998 BONUS PLAN AND FOR THE RATIFICATION OF THE APPOINTMENT OF ARTHUR
ANDERSEN LLP.
<PAGE>
(Continued from other side)
1. ELECTION OF DIRECTORS
FOR all nominees listed below (except as marked to the contrary below): ____
WITHHOLD AUTHORITY to vote for all nominees listed below: ____
Nominees: Lawrence J. Ellison, Donald L. Lucas, Michael J. Boskin, Raymond
J. Lane, Jeffrey O. Henley, Jack F. Kemp, Richard A. McGinn, and
Jeffrey Berg.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below)
_________________________________
2. PROPOSAL TO APPROVE THE ADOPTION OF THE COMPANY'S EXECUTIVE OFFICERS
1998 BONUS PLAN
____ FOR ____ AGAINST ____ ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
____ FOR ____ AGAINST ____ ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting or any
adjournment thereof.
Please sign exactly as the name or names appear on stock certificate (as
indicated hereon). If the shares are issued in the names of two or more
persons, all such persons should sign the proxy. A proxy executed by a
corporation should be signed in its name by its authorized officers. Executors,
administrators, trustees, and partners should indicate their positions when
signing.
Dated:______, 1997
__________________
__________________
Signatures
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN, AND RETURN THIS PROXY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
