<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 [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting material pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Oracle Corporation
------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 paid previously by written preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount previously paid: _______________________________________________
2) Form Schedule or Registration Statement No.: __________________________
3) Filing party: _________________________________________________________
4) Date filed: ___________________________________________________________
Notes: _________________________________________________________________________
<PAGE>
[ORACLE LOGO]
500 Oracle Parkway
Redwood City, California 94065
September 11, 2000
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 16, 2000, at 10:00 a.m., in the Oracle Corporation Conference Center,
located at 350 Oracle Parkway, 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 2000. 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 or vote electronically via the
Internet or telephone. See "Voting Via the Internet or By Telephone" in the
Proxy Statement for more details. Please note that there are separate Internet
and telephone voting arrangements depending upon whether shares are registered
in your name or in the name of a bank or broker. Returning the proxy or voting
electronically 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(R)]
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 16, 2000, at 10:00 a.m., in the Oracle Corporation Conference Center,
located at 350 Oracle Parkway, 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 2000 Long-Term Equity Incentive
Plan.
3. To ratify the appointment of Arthur Andersen LLP as independent public
accountants for the Company for the current fiscal year.
4. To consider a stockholder proposal.
5. To transact any other business that may properly come before the
meeting.
Stockholders of record at the close of business on August 21, 2000 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 11, 2000
Whether or not you plan to attend the meeting, please complete, sign, date
and return the accompanying proxy in the enclosed postage-paid envelope or
vote electronically via the Internet or telephone.
<PAGE>
PROXY STATEMENT
September 11, 2000
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 Monday, October 16, 2000, at
10:00 a.m., in the Oracle Corporation Conference Center, located at 350 Oracle
Parkway, Redwood City, California. All holders of record of Common Stock, par
value $0.01 per share (the "Common Stock"), at the close of business on August
21, 2000, the record date, will be entitled to vote at the Annual Meeting. At
the close of business on the record date, the Company had 2,821,650,145 shares
of Common Stock outstanding and entitled to vote. A majority, 1,410,825,073,
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 11, 2000. 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,
voting by telephone or voting on the Internet 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 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 $12,500, plus reasonable
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. The Board of Directors is planning to reduce its number to eight
directors, and accordingly, there are only eight nominees. Proxies cannot be
voted for a greater number of persons than the number of nominees named.
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.
1
<PAGE>
Directors
The following incumbent directors are being nominated for re-election to the
Board: Lawrence J. Ellison, Donald L. Lucas, Michael J. Boskin, Jeffrey O.
Henley, Jack F. Kemp, Jeffrey Berg, Richard A. McGinn and Kay Koplovitz.
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, 56, has been Chief Executive Officer and a director of the
Company since he co-founded the Company in May 1977. Mr. Ellison has been
Chairman of the Board since June 1995 and served as Chairman of the Board from
April 1990 until September 1992. He also served as President of the Company
from May 1977 to June 1996. Mr. Ellison is co-chairman of California's Council
on Information Technology. He is also a director of Apple Computer, Inc.
Mr. Lucas, 70, 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
Committee on Compensation and Management Development (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 also serves as a director of
Cadence Design Systems, Inc., Coulter Pharmaceutical, Inc., Macromedia, Inc.,
Transcend Services, Inc, Preview Systems, Inc. and Tricord Systems, Inc.
Dr. Boskin, 54, 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 by the Board in July
1997. Dr. Boskin has been a professor of economics at Stanford University
since 1971 and is Chief Executive Officer and President of Boskin & Co., Inc.,
a consulting firm. He was Chairman of the President's Council of Economic
Advisers from February 1989 until January 1993. Dr. Boskin also serves as a
director of Exxon Mobil Corporation, First Health Group Corp., and Vodafone
AirTouch Public Limited Company.
Mr. Henley, 55, 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. Kemp, 65, has served as 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 served as a member of Congress for 18 years and as
Secretary of Housing and Urban Development from February 1989 until January
1992. In 1996, Mr. Kemp was the Republican candidate for Vice President of the
United States. Mr. Kemp also serves as a director of Hawk Corporation,
JumpMusic.com, Inc., Proxicom, Inc., Speedway Motorsports, Inc. and ZapMe!
Corporation.
Mr. Berg, 53, 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., a talent agency for the entertainment industry, since 1985. He served as
Co-Chair of California's Council on Information Technology and was President
of the Executive Board of the College of Letters and Sciences at the
University of California at Berkeley.
2
<PAGE>
Mr. McGinn, 53, has been a director of the Company since March 1997. Mr.
McGinn has served as the Chairman of the Board of Lucent Technologies, Inc.
("Lucent Technologies") since February 1998 and has been its Chief Executive
Officer since October 1997. He has been President since February 1996, and was
Chief Operating Officer from February 1996 to October 1997. Lucent
Technologies was the communications and technology subsidiary of AT&T and was
spun off 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. Mr. McGinn also serves as a director of the
American Express Company.
Ms. Koplovitz, 55, has been a director of the Company since October 1998.
She has been a member of the Nominating Committee since July 1999. Since
January 2000, she has been CEO of WorkingWoman Network, Inc., which operates a
website aimed at women and provides business tools. From June 1998 to January
2000, she served as Chief Executive Officer of Koplovitz & Co., a company
specializing in media start-up ventures. She is the Founder of USA Networks,
and served as its Chairman and Chief Executive Officer from its premiere in
1977 as television's first advertiser-supported basic cable network until June
1998. In 1992, Ms. Koplovitz launched the Sci-Fi Channel, which has become one
of the industry's fastest-growing networks. Ms. Koplovitz is also a director
of Liz Claiborne, Inc. In June 1998, Ms. Koplovitz was appointed by President
Clinton to chair the National Women's Business Council.
Director Compensation
The Company currently pays Messrs. Kemp, Berg, McGinn and Lane and Ms.
Koplovitz an annual retainer of $40,000 each. Dr. Boskin currently is paid an
annual retainer of $100,000 and Mr. Lucas currently is paid an annual retainer
of $160,000 in connection with their additional board committee duties. Non-
employee members of the Board also receive directors' fees of (1) $1,500 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 currently provides for the following grants of options to purchase
Common Stock of the Company to non-employee members of the Board: options to
purchase 60,000 shares of Common Stock as of the date an individual becomes a
non-employee director; options to purchase 30,000 shares of Common Stock on
May 31st 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
90,000 shares of Common Stock on May 31st 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 75,000 shares of
Common Stock on May 31st of each year to the director who serves as chairman
of the Compensation Committee, provided such director has served as a member
of such committee for at least one year. Messrs. Ellison 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 during
fiscal year 2000. During that same period, the Board acted seven times by
unanimous written consent. Standing committees of the Board currently include,
among others, the Executive Committee, the Finance and Audit Committee, the
Compensation Committee and the Nominating Committee. Each incumbent director
has attended at least 75% of all Board meetings and applicable committee
meetings.
Messrs. Ellison, Lucas and Henley are presently the members of the Executive
Committee. The Executive Committee did not meet during fiscal year 2000, and
during that same period acted nine 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
3
<PAGE>
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.
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 2000. The primary function of the Finance and Audit
Committee is to provide advice with respect to the Company's financial matters
and to assist the Board of Directors in fulfilling its oversight
responsibilities regarding finance, accounting, tax and legal compliance
matters.
Dr. Boskin and Mr. Lucas are presently the members of the Compensation
Committee. The Compensation Committee met six times during fiscal year 2000,
and during that same period acted forty-two times by unanimous written
consent. The function of the Compensation Committee is to: (1) 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; (2) administer
the Company's stock plans and approve stock option awards; and (3) oversee the
career development of senior management.
Dr. Boskin, Mr. Lucas and Ms. Koplovitz are presently the members of the
Nominating Committee. The Nominating Committee did not meet during fiscal year
2000, and during that same period acted once 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.
Mr. Ellison is presently the sole member of the Plan Committee. The Plan
Committee did not meet during fiscal year 2000, and during that same period,
acted thirty-one times by unanimous written consent. The Plan Committee is
authorized to approve stock option awards, subject to certain limitations.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of August 21, 2000
(unless otherwise indicated below), 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).......................... 696,356,050 24.16%
500 Oracle Parkway, Redwood City, CA 94065
Raymond J. Lane(3).............................. 10,104,298 *
Gary L. Bloom(4)................................ 3,007,982 *
Jeffrey O. Henley(5)............................ 7,534,010 *
Jay Nussbaum(6)................................. 618,954 *
George Roberts (7).............................. 695,178 *
Donald L. Lucas(8).............................. 439,815 *
Michael J. Boskin(9)............................ 477,060 *
Jack Kemp(10)................................... 18,351 *
Jeffrey Berg(11)................................ 179,250 *
Richard A. McGinn(12)........................... 13,500 *
Kay Koplovitz(13)............................... 79,300 *
All current executive officers and directors
as a group (19 persons)(14).................... 725,171,403 25.16%
</TABLE>
--------
*Less than 1%
(1) Unless otherwise indicated below, each stockholder listed had sole voting
and sole investment power with respect to all shares beneficially owned,
subject to community property laws, if applicable.
(2) Includes 33,773,500 shares subject to currently exercisable options or
options exercisable within 60 days.
(3) Includes 9,844,844 shares subject to currently exercisable options or
options exercisable within 60 days. Mr. Lane is no longer an employee of
the Company.
(4) Includes 2,727,188 shares subject to currently exercisable options or
options exercisable within 60 days.
(5) Includes 7,515,636 shares subject to currently exercisable options or
options exercisable within 60 days.
(6) Includes 605,970 shares subject to currently exercisable options or
options exercisable within 60 days.
(7) Includes 691,506 shares subject to currently exercisable options or
options exercisable within 60 days.
(8) Includes 14,031 shares held in trust. Includes 425,784 shares subject to
currently exercisable options or options exercisable within 60 days.
(9) Includes 477,060 shares subject to currently exercisable options or
options exercisable within 60 days.
(10) Includes 14,025 shares subject to currently exercisable options or
options exercisable within 60 days.
(11) Includes 179,250 shares subject to currently exercisable options or
options exercisable within 60 days.
(12) Includes 13,500 shares subject to currently exercisable options or
options exercisable within 60 days.
5
<PAGE>
(13) Includes 75,000 shares subject to currently exercisable options or
options exercisable within 60 days.
(14) Includes all shares described in notes (2) through (13) above and
4,235,436 additional shares subject to currently exercisable options or
options exercisable within 60 days.
6
<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 five other most highly compensated executive officers of the
Company (determined as of May 31, 2000) (hereinafter referred to as the "named
executive officers") for the fiscal years ended May 31, 2000, 1999, and 1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------- ------------
Securities
Underlying
Options/SARs
Name and Principal Position Fiscal Year Salary ($) Bonus ($) (#)(1)
--------------------------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Lawrence J. Ellison........... 2000 $ 208,000 $ -- 20,000,000
Chairman and 1999 $1,000,000 $2,752,000 3,000,000
Chief Executive Officer 1998 $ 999,987 $ 530,000 0
Raymond J. Lane (2)........... 2000 $1,000,000 $2,180,000 1,500,000
President and Chief 1999 $1,000,000 $2,250,000 2,250,000
Operating Officer 1998 $ 974,991 $ 206,250 0
Gary L. Bloom................. 2000 $1,000,000 $1,915,000 2,400,000
Executive Vice President 1999 $ 888,864 $2,352,919 3,600,000
1998 $ 334,713 $ 200,000 2,100,000
Jeffrey O. Henley............. 2000 $ 806,250 $1,361,250 1,000,000
Executive Vice President 1999 $ 727,500 $1,334,609 1,200,000
and Chief Financial Officer 1998 $ 645,000 $ 113,437 0
Jay Nussbaum.................. 2000 $ 742,897 $1,772,069 800,000
Executive Vice President, 1999 $ 525,000 $1,151,730 1,500,000
Oracle Service Industries 1998 $ 345,600 $ 386,996 360,000
George Roberts................ 2000 $ 643,182 $4,020,158 800,000
Executive Vice President 1999 $ 406,458 $ 357,967 875,000
1998 $ 106,831 $ 115,844 180,000
</TABLE>
--------
(1) All figures in this column reflect options to purchase common stock and
adjustments, to the extent applicable, for two 3-for-2 stock splits and
one 2-for-1 stock split effective August 15, 1997, February 26, 1999 and
January 18, 2000, respectively. Mr. Ellison's option grant is intended to
be the only option grant that he receives in the four-year period from
fiscal 2000 to fiscal 2003.
(2) Mr. Lane is no longer an employee of the Company.
7
<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 2000:
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Individual Grants Term
--------------------------------------------------- -------------------------
Percent of
Total
Number of Options/SARs
Securities Granted to Exercise
Underlying Employees in or Base
Options/ SARs Fiscal Year Price Expiration
Name Granted (#)(1) 2000 ($/sh) Date 5% ($) 10% ($)
---- -------------- ------------ -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence J. Ellison..... 20,000,000(2) 15.60 $13.750 6/04/09 $172,946,022 $438,279,177
Raymond J. Lane......... 1,500,000(2)(3) 1.17 $13.750 6/04/09 $ 12,970,952 $ 32,870,938
Gary L. Bloom........... 2,000,000(2) 1.56 $13.750 6/04/09 $ 17,294,602 $ 43,827,918
400,000(4) 0.31 $81.625 3/13/10 $ 20,533,410 $ 52,035,691
Jeffrey O. Henley....... 1,000,000(2) 0.78 $13.750 6/04/09 $ 8,647,301 $ 21,913,959
Jay Nussbaum............ 500,000(2) 0.39 $13.750 6/04/09 $ 4,323,651 $ 10,956,979
300,000(4) 0.23 $81.625 3/13/10 $ 15,400,057 $ 39,026,768
George Roberts.......... 400,000(2) 0.31 $13.750 6/04/09 $ 3,458,920 $ 8,765,584
400,000(4) 0.31 $81.625 3/13/10 $ 20,533,410 $ 52,035,691
</TABLE>
--------
(1) Each option granted was granted under the Company's 1991 Long-Term Equity
Incentive Plan and vests at the rate of 25% per annum, other than as noted
in footnote (4). 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 and in the event certain
other corporate transactions, as set forth in the Company's 1991 Long-Term
Equity Incentive Plan. Each option has an exercise price equal to the fair
market value of the Common Stock on the date of grant. All figures in this
column reflect options to purchase common stock and adjustments, to the
extent applicable, for two 3-for-2 stock splits and one 2-for-1 stock
split effective August 15, 1997, February 26, 1999 and January 18, 2000,
respectively.
(2) Option granted on June 4, 1999. Mr. Ellison's option grant is intended to
be the only option grant that he receives in the four-year period from
fiscal 2000 to fiscal 2003.
(3) Mr. Lane is no longer an employee of the Company.
(4) Option granted on March 13, 2000. This option vests one third after the
fourth, fifth and sixth years and expires ten years from the date of the
grant.
8
<PAGE>
The following table sets forth information with respect to the named
executive officers concerning exercises of options during fiscal year 2000 and
unexercised options held as of the end of fiscal year 2000.
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Options/SARs in-the-Money Options/SARs at
Shares Acquired Value at Fiscal Year-End (#) Fiscal Year-End ($)
Name on Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- ------------ ------------------------- -----------------------------
<S> <C> <C> <C> <C>
Lawrence J. Ellison..... 1,426,000 $ 75,024,427 27,911,000/24,050,000 $1,959,915,445/$1,473,896,660
Raymond J. Lane(1)...... 4,036,686 $230,718,859 10,969,844/ 6,281,250 $ 729,159,255/$ 402,946,969
Gary L. Bloom........... 829,186 $ 20,527,283 1,314,688/ 5,625,000 $ 87,171,432/$ 334,482,613
Jeffrey O. Henley....... 1,600,000 $ 76,314,260 7,409,386/ 2,518,750 $ 505,262,024/$ 159,926,875
Jay Nussbaum............ 456,534 $ 14,933,334 368,470/ 2,015,000 $ 23,517,191/$ 105,963,063
George Roberts.......... -- -- 497,756/ 1,546,250 $ 32,672,705/$ 71,903,085
</TABLE>
--------
(1) Mr. Lane is no longer an employee of the Company.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee currently consists of Dr. Boskin and Mr. Lucas.
No member of the Compensation Committee was an officer or employee of the
Company or any of its subsidiaries during fiscal year 2000. 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.
9
<PAGE>
Report of Committee on Compensation and Management Development
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 Committee on Compensation and Management
Development
The Committee on Compensation and Management Development (the "Compensation
Committee") consists of the following non-employee members of the Company's
Board of Directors: Michael J. Boskin and Donald L. Lucas.
The Compensation Committee reviews and determines the Company's executive
compensation objectives and policies, administers the Company's stock plans
and grants stock options and monitors and oversees the career development of
management personnel. In fiscal year 1999, the Board of Directors expanded the
charter of the Compensation Committee to include overseeing management career
development and accordingly changed the Compensation Committee's name. The
Compensation Committee's purview was expanded, in part, to help the Company
attract, develop and retain talented executive personnel in an extremely
competitive market.
Within the Silicon Valley, competition for executive talent is especially
intense in the information technology industry. With this perspective, the
Compensation Committee reviews and sets the compensation of the Company's
Chief Executive Officer and the other members of the Company's executive
management committee.
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 generally 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 selected corporations to
which the Company compares its executive compensation. The
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<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 Compensation 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
2000 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 Compensation 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. Fiscal year 2000 executive bonus
payments for Messrs. Lane, Henley and Bloom were based upon earnings per share
(not including extraordinary items and excluding currency gains and losses).
The executive bonus payments for Messrs. Roberts, Nussbaum and Sanderson were
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. However, this year, a number of executive
officers were given grants that only begin vesting after the fourth year.
These options vest one third after the fourth, fifth and sixth years and
expire ten years from the date of grant.
11
<PAGE>
Benefits. The Company believes that it must offer a competitive benefit
program to attract and retain key executives.
During fiscal year 2000, the Company provided medical and other benefits to
its executive officers that are generally available to the Company's other
employees.
Compensation of the Chief Executive Officer. The Chief Executive Officer's
compensation plan for fiscal year 2000 and the three subsequent fiscal years
consists of no salary (except for salary he received in fiscal year 2000 prior
to the change in his compensation) and no bonus. Instead, on June 4, 1999, he
was granted an option to purchase 10,000,000 shares of the Company's Common
Stock (prior to the Company's 2-for-1 stock split effective January 18, 2000)
at the fair market value at the time of grant. The option vests in equal
installments over a period of four years and expires ten years from the date
of grant. The Chief Executive Officer will not receive another option grant
during fiscal years 2001, 2002 and 2003. Accordingly, the Chief Executive
Officer will receive an average of 5 million shares (accounting for the
January 2000 stock split) for each of these four fiscal years, as compared to
an average grant of 3.4 million shares and average salary and bonus of
approximately $2.7 million for each of the three prior fiscal years.
The changes to the Chief Executive Officer's compensation plan more closely
align his compensation with the Company's stock performance. The Black-Scholes
value of the option grant given to the Chief Executive Officer was
approximately $191 million and will be the Chief Executive Officer's only
option grant for the four-year period from fiscal 2000 to fiscal 2003.
Submitted by: Michael J. Boskin, Chair
Donald L. Lucas
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Report of the Finance and Audit Committee
of the Board of Directors
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act or the Exchange Act that
might incorporate this Proxy Statement or future filings with the SEC, in
whole or in part, the following report shall not be deemed to be incorporated
by reference into any such filing.
Membership and Role of the Finance and Audit Committee
The Finance and Audit Committee (the "F&A Committee") consists of the
following members of the Company's Board of Directors: Jeffrey Berg, Michael
J. Boskin and Donald L. Lucas. Each of the members of the F&A Committee is
independent as defined under the National Association of Securities Dealers'
listing standards. The F&A Committee operates under a written charter adopted
by the Board of Directors which is included in this proxy statement as
Appendix A.
The primary function of the F&A Committee is to provide advice with respect
to the Corporation's financial matters and to assist the Board of Directors in
fulfilling its oversight responsibilities regarding finance, accounting, tax
and legal compliance. The F&A Committee's primary duties and responsibilities
are to: (1) serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system; (2)
review and appraise the audit efforts of the Corporation's independent
accountants and internal audit department; (3) evaluate the Corporation's
quarterly financial performance as well as its compliance with laws and
regulations; (4) oversee management's establishment and enforcement of
financial policies and business practices; and (5) provide an open avenue of
communication among the independent accountants, financial and senior
management, counsel, the internal audit department and the Board of Directors.
Review of the Company's Audited Financial Statements for the Fiscal Year
ended May 31, 2000
The F&A Committee has reviewed and discussed the audited financial
statements of the Company for the fiscal year ended May 31, 2000 with the
Company's management. The F&A Committee has discussed with Arthur Andersen
LLP, the Company's independent public accountants, the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
The F&A Committee has also received the written disclosures and the letter
from Arthur Andersen LLP required by Independence Standards Board Standard No.
1 (Independence Discussion with Audit Committees) and the F&A Committee has
discussed the independence of Arthur Andersen LLP with that firm.
Based on the F&A Committee's review and discussions noted above, the F&A
Committee recommended to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K
for the fiscal year ended May 31, 2000 for filing with the SEC.
Submitted by: Jeffrey Berg
Michael J. Boskin
Donald L. Lucas, Chair
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Stock Performance Graph
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, 1995 and ending May 31, 2000, 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.
Oracle Corporation Stock Performance Graph
Cumulative Total Return
<TABLE>
<CAPTION>
5/95 5/96 5/97 5/98 5/99 5/00
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Oracle Corporation ORCL 100.00 142.99 201.26 152.97 240.98 1396.13
S & P 500 1500 100.00 128.44 166.22 217.23 262.90 290.45
H & Q Technology 1HQT 100.00 141.23 169.50 203.78 311.41 537.06
</TABLE>
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Transactions and Legal Actions Involving Management
From June 1, 1999 to the present, there have been no transactions, or
currently proposed transactions, between the Company or any of its
subsidiaries 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:
During fiscal year 2000, Raymond J. Lane, former President, Chief Operating
Officer and Director of the Company, purchased an automobile from the Company
for $100,000.
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 2000, the Company purchased approximately $27,000 in computer
equipment from nCUBE. 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. 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.
During fiscal year 1999, the Company entered into an agreement with MindQ
LLC, a company in which Mr. Ellison owns a controlling interest, which allows
the Company to resell some of MindQ LLC's existing courses as well as certain
additional courses that will be developed by MindQ LLC at its cost. During
fiscal year 2000, the Company contracted with MindQ LLC for the development of
three courses for the Company at a cost of approximately $375,000 and has paid
approximately $287,000 of that amount during fiscal year 2000.
During fiscal year 2000, the Company leased aircraft from Wing and a Prayer,
Incorporated, which is owned by Mr. Ellison. The aggregate amount billed to
the Company for the use of the aircraft was approximately $1,383,000. The
Company believes that the amount billed for the use of the aircraft and the
pilots are within the range charged by third-party commercial charter
companies for similar model aircraft. The Company and Mr. Ellison have
negotiated an indemnity agreement pursuant to which Mr. Ellison would
indemnify the Company up to $250,000,000 in the event that Wing and a Prayer's
aviation insurance policy does not provide full coverage to the Company.
During fiscal year 2000, the Company received a 5% equity interest in New
Internet Computer Company (formerly known as Network Computer, Inc.), a
company in which Mr. Ellison holds a controlling interest, in exchange for
transferring a prototype network computer and certain trademarks from the
Company to New Internet Computer Company. In addition, the Company plans to
purchase up to 10,000 network computers from such company.
During fiscal year 2000, Lucent Technologies, of which Mr. McGinn is
Chairman and Chief Executive Officer, purchased approximately $51,000,000 of
property and services from the Company. In addition, the Company purchased
approximately $375,000 of property and services from Lucent Technologies.
During fiscal year 2000, the Company received $500,000 in equity in
WorkingWoman Network, Inc., of which Ms. Koplovitz is Chief Executive Officer
and in which each of Ms. Koplovitz and Messrs. Ellison, Lucas and Boskin are
investors, in exchange for granting the right to order $1,000,000 worth of
software.
The Company believes that each transaction listed above was on terms at
least as favorable to the Company as any arms-length transaction. Each
transaction has been approved by an independent committee of directors.
Shareholder class actions were filed in the Superior Court of the State of
California, County of San Mateo against the Company and its Chief Financial
Officer and its former Chief Operating Officer on and after December 18, 1997.
The class actions are brought on behalf of purchasers of the stock of the
Company during the period April 29, 1997 through December 9, 1997. Plaintiffs
allege that the defendants made false and
15
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misleading statements about the Company's actual and expected financial
performance, while selling Company stock, in violation of state securities
laws. Plaintiffs further allege that the individual defendants sold Company
stock while in possession of material non-public information. The Company
believes that it has meritorious defenses to these actions and intends to
vigorously defend them.
A shareholder derivative lawsuit was filed in the Superior Court of the
State of California, County of San Mateo on November 17, 1998. The derivative
suit was brought by Company stockholders, allegedly on behalf of the Company,
against certain of the Company's current and former officers and directors.
The derivative plaintiffs allege that these officers and directors breached
their fiduciary duties to the Company by making or causing to be made alleged
misstatements about the Company's revenue, growth and financial status while
certain officers and directors sold Company stock and by allowing the Company
to be sued in the shareholder class actions. The derivative plaintiffs seek
compensatory and other damages, disgorgement of compensation received, and
temporary and permanent injunctions requiring the defendants to relinquish
their directorships. On January 15, 1999, the Court entered a stipulation and
order staying the action until further notice.
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. 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 the Reporting Persons, the Company believes that with
respect to the fiscal year ended May 31, 2000, all the Reporting Persons
complied with all applicable filing requirements, except that Frank Varasano
filed an amendment to his timely filed Form 3 to report his holding of an
option to purchase shares of the Company's common stock.
PROPOSAL NO. 2
ADOPTION OF THE 2000
LONG-TERM EQUITY INCENTIVE PLAN
At the Annual Meeting, the stockholders are being asked to approve the
adoption of the Company's 2000 Long-Term Equity Incentive Plan (the "2000
Plan"), adopted by the Board on July 17, 2000 and September 7, 2000, which
would establish a successor plan to the 1991 Long-Term Equity Plan (the "1991
Plan"). The adoption of the 2000 Plan is necessitated by the impending
expiration of the 1991 Plan.
Required Vote
Approval of the adoption of the 2000 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 Company is presenting the 2000 Plan for stockholder
approval to obtain various regulatory advantages under the Internal Revenue
Code and Nasdaq rules. If the stockholders do not approve the 2000 Plan, it
will not be adopted.
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The Board of Directors recommends a vote for approval of
the adoption of the 2000 Long-Term Equity Incentive Plan
1991 Plan Activity
The 1991 Plan remains in effect until its expiration date or until
stockholder approval of the 2000 Plan. Upon stockholder approval of the 2000
Plan, shares currently reserved for issuance under the 1991 Plan
(approximately 270,000,000) will be transferred to the 2000 Plan.
Authority for Grants under 2000 Plan
As of August 21, 2000, options to purchase 270,331,847 shares were
outstanding under the 1991 Plan, and 269,953,132 shares remain available for
future grants under the 1991 Plan. These shares will be transferred to the
2000 Plan upon its approval by stockholders. In addition to this authority,
the Company may grant options in substitution or replacement of options
granted by a company that the Company acquires or combines with. Shares
tendered by an optionee to meet withholding tax obligations arising out of the
exercise of an option will not reduce the shares available for future awards
under the 2000 Plan. If an option granted pursuant to the 1991 Plan or the
2000 Plan expires or terminates for any reason without being exercised in
whole or in part, the shares released from such option or award will again
become available for grant and purchase under the 2000 Plan.
The table under the caption "Option/SAR Grants in Last Fiscal Year" provides
information with respect to the grant of options under the 1991 Plan to the
Chief Executive Officer and the next four most highly compensated executive
officers during fiscal year 2000. The following table sets forth additional
information with respect to options granted under the 1991 Plan during fiscal
year 2000 to certain groups:
<TABLE>
<CAPTION>
Weighted Average Options
Identity of Group Exercise Price Granted
----------------- ---------------- ----------
<S> <C> <C>
All executive officers as a group (15
persons)..................................... $21.3172 34,870,000
Non-executive officer employees as a group
(approximately 10,400 persons)............... $34.4601 94,314,809
</TABLE>
Description of the 2000 Plan and Option Terms
The following is a summary of the principal provisions of the 2000 Plan, but
it is not intended to be a complete description of all the terms and
provisions of the 2000 Plan. A copy of the 2000 Plan is attached hereto as
Appendix B.
Purpose. The purpose of the 2000 Plan, like the 1991 Plan, is to provide
additional compensation and incentive to eligible employees, officers,
directors, advisors and consultants whose present and potential contributions
are important to the continued success of the Company, to afford such persons
an opportunity to acquire a proprietary interest in the Company and to enable
the Company to continue to enlist and retain the best available talent for the
successful conduct of its business.
Administration. The 2000 Plan will be administered by one or more committees
designated by the Board to administer the Plan (the "Committee"). Subject to
the terms of the 2000 Plan, the Committee, as constituted, determines the
persons who are to receive awards, the number of shares subject to each award,
the terms and conditions of such awards and the dates of grants. The Committee
also has the authority to construe and interpret any of the provisions of the
2000 Plan or any options granted thereunder. Such interpretations are binding
on the Company and on the optionees.
Eligibility. All officers, directors (who are also employees or consultants
of the Company), employees, advisors and consultants of the Company (or any
subsidiary or affiliate of the Company) are eligible to receive awards under
the 2000 Plan. The Company may also grant options under the 2000 Plan in
connection with its assumption or replacement of options issued by another
company which the Company acquires or combines with.
17
<PAGE>
As of August 21, 2000, approximately 41,200 employees were eligible to receive
options under the 1991 Plan, except those who are not eligible due to local
laws, and all such employees will be eligible to receive options under the
2000 Plan.
Option Awards. Both incentive stock options ("ISOs"), as defined in Section
422(b) of the Internal Revenue Code (the "Code"), and nonqualified stock
options ("NQSOs"), may be granted under the 2000 Plan. The Committee
determines whether an option granted under the 2000 Plan will be an ISO or a
NQSO. The Company currently grants only NQSOs.
Other Awards. In addition to stock options, certain other awards may be
granted under the 2000 Plan. The Committee may grant Stock Appreciation Rights
("SAR") (including freestanding SARs and options granted in tandem with
related options), entitling the holder upon exercise to receive an amount in
any combination of cash or Common Stock (as determined by the Committee) equal
in value to the excess of the fair market value of the shares covered by such
SAR on the date of exercise over the aggregate exercise price of the SAR for
such shares. The Committee may also grant rights to purchase stock under such
terms and conditions as it may determine. In addition, the Committee may grant
stock bonus awards payable in cash or Common Stock based upon reasonable
performance criteria the Committee deem appropriate.
Performance-Based Compensation Limits. No employee shall be granted in any
fiscal year of the Company options and SARs to acquire or related to in the
aggregate more than 25,000,000 shares of Common Stock. The foregoing
limitation, which shall adjust proportionately in connection with any change
in the Company's capitalization, is intended to satisfy the requirements
applicable to options and SARs intended to qualify as performance-based
compensation within the meaning of Code Section 162(m). In the event that the
Committee determines that such limitation is not required to qualify options
and SARs as performance-based compensation, the Committee may modify or
eliminate such limitation.
Terms of the Options. Each option granted pursuant to the 2000 Plan is
evidenced by a stock option grant (the "Grant") issued by the Company. An
exercise notice and agreement (the "Exercise Notice") is to be completed by
the optionee at the time an option is exercised. The Company does not receive
any consideration from an optionee at the time an option is granted. The forms
of the Grant and the Exercise Notice may be amended by the Committee from time
to time, subject to the terms of the 2000 Plan.
Options may be granted under the 2000 Plan until the date of the Company's
Annual Meeting of Stockholders 2010.
Subject to the provisions of the 2000 Plan, the Committee may determine the
vesting schedule of each option and other terms and conditions of
exercisability. Options granted under the 2000 Plan typically vest in four
equal annual installments starting from the date of grant, although vesting of
an option may be accelerated by the Committee. The Committee also has the
discretion to modify, extend or renew outstanding awards and to issue new
awards in exchange for surrender of outstanding awards. The Committee also may
cause the Company to purchase for cash or shares of Common Stock any option
issued under the 2000 Plan.
Generally, options granted under the 2000 Plan must be exercised within ten
years of the option grant date.
The Committee determines the exercise price of each option granted, which is
set forth in the Grant. Under the 2000 Plan, the exercise price of an option
granted to an employee may be less than the fair market value per share of the
Company's Common Stock on the date the option is granted. Options may be
granted with exercise prices other than as described above in connection with
the Company's assumption or replacement of options issued by another company.
Payment for Shares purchased upon exercise of an Option may be made in cash
(by check) or, unless otherwise provided by the Committee in its sole
discretion: (i) by cancellation of indebtedness of the Company to the
Participants; (ii) by surrender of Shares of Common Stock having a Fair Market
Value equal to the applicable exercise price of the Options; (iii) where
approved by the Committee in its sole discretion, by tender of a full recourse
promissory note having such terms as may be approved by the Committee and
18
<PAGE>
bearing interest at a rate sufficient to avoid imputation of income under
Section 483 and 1274 of the Code, provided that the portion of the exercise
price equal to the par value of the Shares, if any, must be paid in cash or
other legal consideration, and provided further that Participants who are not
employees or directors of the Company shall not be entitled to purchase Shares
with a promissory note unless the note is adequately secured by collateral
other than the Shares; (iv) by waiver of compensation due or accrued to the
Participant for services rendered; (v) pursuant to a broker-assisted "cashless
exercise" arrangement; or (vi) by any combination of the foregoing, in each
case to the extent permitted by the legal requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or
consolidated stock price reporting system on which prices for the Common Stock
are quoted at any given time, and the analogous applicable laws of any other
country or jurisdiction where options are granted under the 2000 Plan.
Deferrals. The Committee may also permit participants to elect to defer
receipt of benefits under the 2000 Plan or make automatic deferrals. The
Committee may also provide and determine the amount of any deemed earnings for
amounts deferred under the 2000 Plan.
Nontransferability and Termination of Options. Options granted under the
2000 Plan may not be transferred by the optionee other than by will or by the
laws of descent and distribution, except that the Committee may in its
discretion grant NQSOs with limited transferability rights. During the
lifetime of the optionee, an option may be exercised only by the optionee.
If an optionee's employment or other association with the Company or a
subsidiary is terminated for any reason other than death or disability, any
outstanding option, to the extent (and only to the extent) that it was
exercisable on the date of such termination, must be exercised by the optionee
by the earlier of three months following such termination (or such shorter
time period as may be specified in the Grant) or the expiration date of the
option. If termination is on account of disability, any outstanding option, to
the extent exercisable on the termination date, must be exercised by the
earlier of twelve (12) months following such date or the expiration date of
the option. If termination is on account of the Participant's death, any
outstanding option may be exercised to the extent (and only to the extent)
that they would have been exercisable on the first vesting date occurring
after such death as may be specified in the Grant and on the next subsequent
vesting date, by the optionee's legal representative within twelve (12) months
after the date of death (or such shorter period as may be specified in the
Grant), but in any event no later than the expiration date of the options. The
Committee has the authority under the 2000 Plan to vary the provisions of an
award applicable upon termination of employment.
Capital Changes. If the number of outstanding shares of Common Stock of the
Company is changed by a stock dividend, stock split, reverse stock split,
combination, reclassification or similar change in the capital structure of
the Company without consideration, the number of shares of Common Stock
available for option grants under the 2000 Plan, the number of shares and the
exercise price per share for each outstanding option and the annual limitation
noted above will be proportionately adjusted, subject to any required action
by the Board or stockholders of the Company.
In the event that the Committee determines that any dividend or other
distribution, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split up, spinoff, combination,
repurchase or exchange of Company securities or other similar corporate
transaction affects the shares such that an adjustment is determined by the
Committee to be appropriate to prevent enlargement or diminution of benefits
under the 2000 Plan, the Committee shall make such adjustments in outstanding
awards, and shares available for future awards, as it determines to be
appropriate.
In general, in the event of a Change of Control of the Company, as defined
in the 2000 Plan, the vesting of all awards granted pursuant to the 2000 Plan
will accelerate and the awards will become exercisable in full prior to the
consummation of such event (and such awards shall then terminate), at such
times and on such conditions as the Committee determines, unless the successor
corporation assumes the outstanding awards or substitutes substantially
equivalent awards. In addition, if an employee's employment or other
association with the
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<PAGE>
Company's successor is terminated without cause within 12 months of a Change
of Control, awards under the 2000 Plan will accelerate and become immediately
and fully exercisable upon such termination.
Amendment and Termination. The Committee may amend or terminate the 2000
Plan at any time and in any respect, except that the Committee cannot, without
the approval of the stockholders of the Company, amend the 2000 Plan in any
manner that requires stockholder approval pursuant to the Code or the
regulations thereunder or pursuant to Rule 16b-3 of the Exchange Act. No
amendment of the 2000 Plan may adversely affect any outstanding option or
unexercised portion thereof without the optionee's written consent. Subject to
the specific terms of the 2000 Plan, the Committee may accelerate any award or
option, reduce any applicable exercise price or waive any conditions or
restrictions pursuant to such award or option at any time.
If an option granted pursuant to the 2000 Plan expires or terminates for any
reason without being exercised in whole or in part, the shares released from
such option or award will again become available for grant and purchase under
the 2000 Plan.
Certain United States Federal Income Tax Information
General. The following is a general summary as of the date of this Proxy
Statement of the United States federal income tax consequences associated with
participation in the 2000 Plan. The federal tax laws may change and the
federal, state and local tax consequences for any participant will depend upon
his or her individual circumstances. This information may not be applicable to
employees of foreign subsidiaries or to participants who are not residents of
the United States. All participants have been and are encouraged to seek the
advice of a qualified tax advisor regarding the tax consequences of
participation in the 2000 Plan. Any tax effects that accrue to foreign
employees as a result of participation in the 2000 Plan will be subject to the
tax laws of the countries in which such employees reside.
Tax Treatment of the Optionee
Nonqualified Stock Options. An optionee will not recognize any taxable
income at the time a NQSO is granted. However, upon exercise of a NQSO the
optionee will include in income as compensation an amount equal to the
difference between the fair market value of the shares on the date of exercise
(in most cases) and the optionee's purchase price. The included amount will be
treated as ordinary income and reported on an employee's W-2 form, or in the
case of a non-employee, on a 1099 form and will be subject to income tax and
FICA withholding by the Company (either by payment in cash or withholding out
of the optionee's salary) if the optionee is an employee. Upon the sale of the
shares by the optionee, any subsequent appreciation or depreciation in the
value of the shares will be treated as short term or long term capital gain or
loss depending upon whether or not the optionee held the shares for more than
one year following exercise of the NQSO.
Incentive Stock Options. The optionee will recognize no income upon grant of
an ISO and incur no tax on its exercise unless the optionee is subject to the
alternative minimum tax described below. If the optionee holds the stock
acquired upon exercise of an ISO (the "ISO Shares") for more than one year
after the date the option was exercised and for more than two years after the
date the option was granted, the optionee generally will realize long-term
capital gain or loss (rather than ordinary income or loss) upon disposition of
the ISO Shares. This gain or loss will be equal to the difference between the
amount realized upon such disposition and the amount paid for the ISO Shares.
If the optionee disposes of ISO Shares prior to the expiration of either of
the above required holding periods (a "disqualifying disposition"), the gain
realized upon such disposition, up to the difference between the fair market
value of the ISO Shares on the date of exercise and the option exercise price,
will be treated as ordinary income and reported on the employee's W-2 form.
Income tax withholding on this income is optional. Any addition gain or loss
will be long-term or short term capital gain or loss, depending upon whether
or not the ISO Shares were held for more than one year following the date of
exercise by the optionee. A disposition of ISO Shares for this purpose
includes not only a sale or exchange, but also a gift or other transfer of
legal title (with
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certain exceptions). Long-term capital gain is taxed at a maximum federal
income tax rate of 20% rather than the 39.6% maximum rate applicable to other
income.
Alternative Minimum Tax. Generally, the difference between the fair market
value of stock purchased by exercise of an ISO (generally measured as of the
date of exercise) and the amount paid for that stock upon exercise of the ISO
is an adjustment to income for purposes of the alternative minimum tax. An
alternative minimum tax adjustment applies unless a disqualifying disposition
of the ISO Shares occurs in the same calendar year as exercise of the ISO. The
alternative minimum tax (imposed to the extent it exceeds the taxpayer's
regular tax) is 26% of an individual taxpayer's alternative minimum taxable
income for alternative minimum taxable income up to $175,000 and 28%
thereafter. Alternative minimum taxable income is determined by adjusting
regular taxable income for certain items, increasing that income by certain
tax preference items and reducing this amount by the applicable exemption
amount ($45,000 in the case of a joint return, subject to reduction under
certain circumstances).
Tax Treatment of the Company. The Company will be entitled to a deduction in
connection with the exercise of a NQSO by a domestic optionee to the extent
that the optionee recognizes ordinary income provided that the deduction is
not disallowed under the provisions of Section 162(m) of the Code. The Company
will be entitled to a deduction in connection with the disposition of ISO
Shares only to the extent that the optionee recognizes ordinary income on a
disqualifying disposition of the ISO Shares and will not be entitled to any
deduction upon exercise of an ISO in the absence of any such disqualifying
disposition.
ERISA. The Company believes that the 2000 Plan is not subject to any of the
provisions of the Employee Retirement Income Security Act of 1974, nor is it
qualified under Section 401(a) of the Code.
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 2000. Arthur Andersen LLP has audited the Company's financial
statements for its last thirteen 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
From time to time, certain stockholders of the Company submit proposals that
they believe should be voted upon by the stockholders. The Commission has
adopted regulations that govern the inclusion of such proposals in the
Company's annual proxy materials. Stockholder proposals for inclusion in the
Company's Proxy Statement and form of proxy relating to the Company's 2000
Annual Meeting of Stockholders must be received by May 14,
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2001. If the Company is not notified of a stockholder proposal by July 28,
2001, then the management proxies may have the discretion to vote against such
stockholder proposal, even though such proposal is not discussed in the proxy
statement. Stockholder proposals should be addressed to Daniel Cooperman,
Senior Vice President, General Counsel & Secretary, Oracle Corporation, 500
Oracle Parkway, Mailstop 5op7, Redwood City, California 94065.
This year, a stockholder submitted a proposal accompanied by a supporting
statement. The proposal was submitted by The Vanguard Public Foundation, which
holds 1,000 shares of Common Stock of the Company. A representative of The
Vanguard Public Foundation has informed the Company that the foundation is
unrelated to The Vanguard Group, Inc., a mutual fund firm and a provider of
company-sponsored retirement plan services.
The Board of Directors opposes the following stockholder proposal for the
reasons stated after the proposal.
PROPOSAL NO. 4
STOCKHOLDER PROPOSAL REGARDING ADOPTION OF
US BUSINESS PRINCIPLES FOR HUMAN RIGHTS
OF WORKERS IN CHINA
Whereas, the Company's business practices in China respect human and labor
rights of workers. The eleven principles below were designed to commit the
Company to a widely accepted and thorough set of human and labor rights
standards for China. They were defined by the International Labor
Organization, the United Nations Covenants on Economic, Social and Cultural
Rights, and Civil, and Political Rights. They have been signed by the Chinese
government and China's national laws.
(1) No goods or products produced within the Company's facilities or those
of suppliers shall be manufactured by bonded labor, forced labor, within
prison camps or as part of reform-through-labor or reeducation-through-labor
programs.
(2) The Company's facilities and suppliers shall adhere to wages that meet
workers' basic needs, fair and decent working hours, and at a minimum, to the
wage and hour guidelines provided by China's national labor laws.
(3) The Company's facilities and suppliers shall prohibit the use of
corporal punishment, any physical, sexual or verbal abuse or harassment of
workers.
(4) The Company's facilities and suppliers shall use production methods that
do not negatively affect the worker's occupational safety and health.
(5) The Company's facilities and suppliers shall prohibit any police or
military presence designed to prevent workers from exercising their rights.
(6) The Company shall undertake to promote the following freedoms among its
employees and the employees of its suppliers: freedom of association and
assembly, including the rights to form unions and bargain collectively;
freedom of expression, and freedom from arbitrary arrest or detention.
(7) The Company's employees and those of its suppliers shall not face
discrimination in hiring, remuneration or promotion based on age, gender,
marital status, pregnancy, ethnicity or region of origin.
(8) The Company's employees and those of its suppliers shall not face
discrimination in hiring, remuneration or promotion based on labor, political
or religious activity, or on involvement in demonstrations, past records of
arrests or internal exile for peaceful protest, or membership in organizations
committed to non violent social or political change.
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(9) The Company's facilities and suppliers shall use environmentally
responsible methods of production that have minimum adverse impact on land,
air and water quality.
(10) The Company's facilities and suppliers shall prohibit child labor, or
at a minimum comply with guidelines on minimum age for employment within
China's national labor laws.
(11) The Company will issue annual statements to the Human Rights for
Workers in China Working Group detailing our efforts to uphold these
principles and to promote these basic freedoms.
Resolved, that the stockholders request the Board of Directors to make all
possible lawful efforts to implement and/or increase activity on each of the
principles named above in the People's Republic of China.
SUPPORTING STATEMENT
As U.S. companies import more goods, consumer and stockholder concern is
growing about working conditions in China that fall below basic standards of
fair and humane treatment. We hope that the Company can prove to be a leader
in its industry and embrace these principles.
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STATEMENT IN OPPOSITION TO STOCKHOLDER PROPOSAL
The Board of Directors recommends a vote AGAINST adoption of
The US Business Principles for Human Rights of Workers in China (the
"Proposal")
for the following reasons:
The Board believes that the Proposal is unnecessary and that certain of its
provisions are vague and overbroad.
The Company is committed to operating in full compliance with applicable
laws in every country where it does business, including China. In 1996, the
Company adopted the Oracle Code of Ethics and Business Conduct to ensure
compliance with the laws of the numerous countries in which the Company
operates. This Code has proven effective and provides uniformity for the
Company's worldwide operations, including its China operations. The Board
therefore believes that adoption of the Proposal is unnecessary.
Certain provisions of the Proposal are vague and overbroad. If adopted, the
Company would be unable to determine readily, without additional time or
expense, what action is required, and in some instances, would be required to
take action that is beyond the Company's ability to effectuate.
The Board therefore does not believe that adoption of the Proposal is
necessary or in the best interests of the Company and recommends a vote
AGAINST the Proposal.
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 Annual 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.
VOTING VIA THE INTERNET OR BY TELEPHONE
Stockholders voting via the Internet should understand that there may be
costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies, that must be borne by the
stockholder.
Shares Registered Directly in the Name of the Stockholder
Stockholders with shares registered directly with Boston Equiserve, the
Company's transfer agent, may vote telephonically by calling 1-800-690-6903 or
you may vote via the Internet at the following address on the World Wide Web:
www.proxyvote.com
and follow the instructions on your screen.
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Shares Registered in the Name of a Brokerage Firm or Bank
A number of brokerage firms and banks are participating in a program
provided through ADP Investor Communication Services that offers telephone and
Internet voting options. This program is different from the program provided
by Boston Equiserve for shares registered in the name of the stockholder. If
your shares are held in an account at a brokerage firm or bank participating
in the ADP program, you may vote those shares telephonically by calling the
telephone number referenced on your voting form or you may vote via the
Internet at the following address on the World Wide Web:
www.proxyvote.com
and follow the instructions on your screen.
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 or to vote
electronically via the Internet or telephone. Thank you for your prompt
attention to this matter.
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Appendix A
CHARTER OF THE
FINANCE AND AUDIT COMMITTEE OF
THE ORACLE CORPORATION BOARD OF DIRECTORS
July 12, 1999
(As amended by the Board of Directors on April 17, 2000)
I. PURPOSE
The primary function of the Finance and Audit Committee (the "Committee") is
to provide advice with respect to the Corporation's financial matters and to
assist the Board of Directors in fulfilling its oversight responsibilities
regarding finance, accounting, tax and legal compliance. Consistent with this
function, the Committee endeavors to encourage continuous improvement of, and
foster adherence to, the Corporation's policies, procedures and practices at
all levels. The Committee's primary duties and responsibilities are to:
. Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
. Review and appraise the audit efforts of the Corporation's independent
accountants and internal audit department.
. Evaluate the Corporation's quarterly financial performance as well as
its compliance with laws and regulations.
. Oversee management's establishment and enforcement of financial policies
and business practices.
. Provide an open avenue of communication among the independent
accountants, financial and senior management, counsel, the internal
audit department, and the Board of Directors.
Section IV of this Charter sets forth the primary responsibilities and
duties of the Committee. The Committee may, in its discretion, also review
reports from management on other finance, legal and administrative issues to
the extent that it deems appropriate or necessary.
II. COMPOSITION
The Committee shall be comprised of three or more directors as determined by
the Board, each of whom shall be independent directors, and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgment as a member of the Committee. An
independent director is a director who:
1. is not and has not been employed by the Corporation or an affiliate for at
least three years prior to election to the Committee;
2. has not received any compensation from the Corporation or an affiliate
exceeding $60,000 during the prior fiscal year (excluding benefits under a
tax-qualified retirement plan, non-discretionary compensation or
compensation for board services);
3. has not been affiliated with a for-profit business entity to which the
Corporation made or from which the Corporation received, payments (other
than investments in securities) that exceed the greater of 5% of the
Corporation's or such entity's annual gross revenues or $200,000 whichever
is greater, in any of the past three years;
4. is not an executive of another entity where any of the Corporation's
executives serve on that entity's compensation committee;
5. is not affiliated with a tax-exempt entity that receives significant
contributions from the Corporation; and
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6. is not a spouse, parent, sibling, child or in-law of any person who is, or
has been in the past three years, employed by the Corporation or an
affiliate as an executive officer or described in 1 through 5 or of any
member of management.
All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee
shall have past employment experience in accounting or related financial
management, requisite professional certification in accounting, or any other
comparable experience or
background which results in the individual's financial sophistication,
including being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight responsibilities.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board. Each member of the Committee shall serve
until the next annual organizational meeting of the Board or until his or her
successor has been duly elected and qualified. Unless a Chair is elected by
the full Board, the members of the Committee may designate a Chair by majority
vote of the full Committee membership.
III. MEETINGS
The Committee shall hold such regular meetings as may be necessary and such
special meetings as may be called by the Chairman of the Committee. As part of
its effort to foster open communication, the Committee shall meet annually (or
more frequently as it deems appropriate) with management, the director of the
internal audit department and the independent accountants in separate
executive sessions to discuss any matters that the Committee or each of these
groups believe should be discussed privately. In addition, the Committee or
its Chair should meet with the independent accountants and management
quarterly to review the Corporation's financial statements consistent with
IV.4 below. The Committee shall report its activities to the Board at each
Board meeting.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Committee shall:
Documents/Reports Review
1. Review this Charter periodically, at least annually, and update as
conditions dictate. Submit the Charter to the Board of Directors for
approval and have the Charter published at least every three years in the
Corporation's proxy statement.
2. Review the Corporation's quarterly financial statements and any other
reports or financial information deemed appropriate by the Committee,
including any certification, report, opinion, or review rendered by the
independent accountants.
3. Review the regular internal reports to management prepared by the internal
audit department and management's response to such reports.
4. Review with financial management of the Corporation the Form 10-Qs and the
Form 10-Ks prior to filing. The Chair of the Committee may represent the
entire Committee for purposes of this review.
5. Prepare a report to be included in the Corporation's proxy statement for
each annual meeting that discloses whether the Committee has reviewed the
financial statements with management and discussed Statement on Auditing
Standards No. 61 (Communicating with Audit Committees) and Independence
Standards Board Standard No. 1 (Auditor Independence) with the independent
accountants, and if it has recommended to the Board of Directors that the
audited financial statements be included in the Form 10-K.
Control Processes
6. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants, management, or the internal audit department.
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7. Establish regular and separate systems of reporting to the Committee by
management, the independent accountants, and the internal auditors
regarding management's preparation of the financial statements.
8. Review with management and the independent accountants at the completion
of the annual examination:
. The Corporation's annual financial statements and related footnotes.
. The independent accountants' audit of the financial statements and their
report thereon.
. Any significant changes required in the independent accountants' audit
plan.
. Any serious difficulties or disputes with management encountered during
the course of the audit.
. The existence of significant estimates and judgments underlying the
financial statements, including the rationale behind those estimates as
well as the details of material accruals and reserves.
. Other matters related to the conduct of the audit which are communicated
to the Committee under generally accepted auditing standards.
9. Review any significant disagreement among management and the independent
accountants or the internal audit department in connection with the
preparation of the financial statements.
10. Make and approve recommendations to change or improve the financial and
accounting practices and evaluate their implementation.
Independent Accountants
11. Recognizing that the independent accountants are ultimately accountable
to the Committee and the Board of Directors, recommend to the Board of
Directors the selection of the independent accountants, considering their
independence and effectiveness and approve the fees and other
compensation to be paid to the independent accountants. On an annual
basis, the Committee shall receive from the independent accountants a
formal written statement regarding the independent accountants'
independence and shall review and discuss with the accountants all
significant relationships the accountants have with the Corporation to
determine the accountants' independence.
12. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
13. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of
the organization's financial statements.
14. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in
its financial reporting.
Internal Auditors
15. Review and evaluate the process used in establishing the annual internal
audit plan.
16. Consider, in consultation with the director of internal audit, the audit
scope and role of the internal auditors.
17. Review and evaluate the scope, risk assessment, and nature of the
internal auditors' plan and any subsequent changes, including whether or
not the internal auditors' plan is sufficiently linked to the
Corporation's overall business objectives and management's success and
risk factors.
18. Consider and review with management and the director of internal audit:
. Significant findings during the year and management's responses thereto,
including the timetable for implementation of the recommendations to
correct weaknesses in internal control.
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. Any difficulties encountered in the course of internal audits, including
any restrictions on the scope of work or access to required information.
. Any changes required in the planned scope of the audit plan of the
internal audit department.
. The internal audit department's budget, staffing and qualifications.
19. Confirm and assure the independence of the internal auditors.
Miscellaneous
20. Ensure that management has the proper review system in place to ensure
that the Corporation's financial statements, reports, and other financial
information disseminated to governmental organizations and the public
satisfy legal requirements.
21. Perform any other activities consistent with this Charter, the
Corporation's By-laws, and governing law as the Committee or the Board
deems necessary or appropriate.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Corporation's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent accountants. Nor
is it the duty of the Committee to conduct investigations or to resolve
disagreements, if any, between management and the independent accountants.
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Appendix B
ORACLE CORPORATION
2000 LONG-TERM EQUITY INCENTIVE PLAN
Section 1. Purpose. This 2000 Long-Term Equity Incentive Plan ("Plan") is
established as a compensatory plan to enable Oracle Corporation (the
"Company") to provide an incentive to eligible employees, officers,
independent consultants, directors who are also employees or consultants, and
advisers whose present and potential contributions are important to the
continued success of the Company; to afford such persons an opportunity to
acquire a proprietary interest in the Company, and to enable the Company to
continue to enlist and retain in its employ the best available talent for the
successful conduct of its business. It is intended that this purpose will be
effected through the granting of (a) stock options, (b) stock purchase rights,
(c) stock appreciation rights and (d) long-term performance awards.
Section 2. Definitions. As used herein, the following definitions shall
apply:
(a) "Affiliate" of any person means any entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, such person, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct
or indirect, of the power to cause the direction of the management and
policies of the entity, whether through the ownership of voting securities, by
contract or otherwise.
(b) "Applicable Laws" means the legal requirements relating to the
administration of stock plans under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time, and the analogous applicable laws of any other country or
jurisdiction where Options, Rights or Long-Term Performance Awards or shares
of Restricted Stock are granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" shall mean the first to occur of:
(i) an individual, corporation, partnership, group, associate or other
entity or "person", as such term is defined in Section 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"), other than the
Company or any employee benefit plan(s) sponsored by the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50% or more of the combined voting power
of the Company's outstanding securities ordinarily having the right to vote
at elections of directors;
(ii) individuals who constitute the Board of Directors of the Company on
the effective date of the Plan (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof, provided that any Approved
Director, as hereinafter defined, shall be, for purposes of this subsection
(ii), considered as though such person were a member of the Incumbent
Board. An "Approved Director", for purposes of this subsection (ii), shall
mean any person becoming a director subsequent to the effective date of the
Plan whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is
named as a nominee of the Company for director), but shall not include any
such individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of
an individual, corporation, partnership, group, associate or other entity
or "person" other than the Board;
(iii) the approval by the stockholders of the Company of a plan or
agreement providing (A) for a merger or consolidation involving the Company
other than with a wholly-owned subsidiary and other than a merger or
consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
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securities of the surviving entity) more than 65% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (B) for a
sale, exchange or other disposition of all or substantially all of the
assets of the Company. If any of the events enumerated in this subsection
(iii) occurs, the Committee shall determine the effective date of the
Change of Control resulting therefrom for purposes of the Plan.
(e) "Code" means the U.S. Internal Revenue Code of 1986, as amended.
(f) "Committee" means the Committee or Committees referred to in Section 5
of the Plan. If at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan shall be exercised by the
Board.
(g) "Common Stock" or "Shares" means the Common Stock, $.01 par value per
share, of the Company.
(h) "Company" means Oracle Corporation, a corporation organized under the
laws of the state of Delaware, or any successor corporation.
(i) "Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
(j) "Disability" means a disability, whether temporary or permanent, partial
or total, within the meaning of Section 22(e)(3) of the Code, as determined by
the Committee.
(k) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) the last reported sale price of the Common Stock of the Company on
the Nasdaq National Market or, if no such reported sale takes place on any
such day, the average of the closing bid and asked prices, or
(ii) if such Common Stock shall then be listed on a national securities
exchange, the last reported sale price or, if no such reported sale takes
place on any such day, the average of the closing bid and asked prices on
the principal national securities exchange on which the Common Stock is
listed or admitted to trading, or
(iii) if such Common Stock shall not be quoted on such National Market
nor listed or admitted to trading on a national securities exchange, then
the average of the closing bid and asked prices, as reported by The Wall
Street Journal for the over-the-counter market, or
(iv) if none of the foregoing is applicable, then the Fair Market Value
of a share of Common Stock shall be determined in good faith by the Board
of Directors of the Company in its discretion.
(l) "Grant" shall mean an instrument or agreement evidencing an Option,
Stock Appreciation Right or Long-Term Performance Award granted hereunder, in
written or electronic form, which may, but need not, be executed or
acknowledged by the recipient thereof.
(m) "Insider" means an executive officer or director of the Company or any
other person whose transactions in Common Stock are subject to Section 16(b)
of the Exchange Act.
(n) "Long-Term Performance Award" means an award under Section 9 below. A
Long-Term Performance Award shall permit the recipient to receive a stock
bonus (as determined by the Committee) upon satisfaction of such performance
factors as are set out in the recipient's individual grant. Long-term
Performance Awards will be based upon the achievement of Company, Subsidiary
and/or individual performance factors or upon such other criteria as the
Committee may deem appropriate.
(o) "Named Executive" means any individual who, on the last day of the
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four highest compensated officers of the
Company (other than the chief executive officer). Such officer status shall be
determined pursuant to the executive compensation disclosure rules under the
Exchange Act.
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(p) "Option" means any option to purchase shares of Common Stock granted
pursuant to Section 6 below.
(q) "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if, at the time of the granting
of an award under the Plan, each of such corporations other than the Company
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(r) "Participant" means an individual who has been granted an Option, Right
or Long-Term Purchase Award under the Plan.
(s) "Plan" means this 2000 Long-Term Equity Incentive Plan, as hereinafter
amended from time to time.
(t) "Purchase Agreement" shall have the meaning specified in Section 8.
(u) "Restricted Stock" means shares of Common Stock acquired pursuant to a
grant of Stock Purchase Rights under Section 8 below.
(v) "Right" means and includes Stock Appreciation Rights and Stock Purchase
Rights granted pursuant to the Plan.
(w) "Stock Appreciation Right" or "SAR" means an award made pursuant to
Section 7 below, which right permits the recipient to receive cash equal to
the difference between the Fair Market Value of Common Stock on the date of
grant of the Stock Appreciation Right and the Fair Market Value of Common
Stock on the date of exercise of the Stock Appreciation Right.
(x) "Stock Purchase Right" means an award made pursuant to Section 8 below,
which right permits the recipient to purchase Common Stock pursuant to a
restricted stock purchase agreement entered into between the Company and the
Participant.
(y) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(z) "Substitute Awards" shall mean an Option, Right or Long-Term Performance
Award granted in assumption of or in substitution for, outstanding options or
other awards previously granted by a company acquired by the Company or with
which the Company combines.
Section 3. Eligibility.
(a) Awards may be granted to employees, officers, directors who are also
employees or consultants, independent consultants and advisers of the Company
or any Parent, Subsidiary or Affiliate of the Company (provided such
consultants, and advisers render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction). ISOs
(hereinafter defined in Section 6 hereof) may be granted only to employees
(including officers and directors who are also employees) of the Company or of
a Parent or Subsidiary of the Company.
(b) A Participant may be granted more than one award under this Plan.
(c) Holders of options and other awards granted by a company acquired by the
Company or with which the Company combines are eligible for grant of
Substitute Awards hereunder in connection with such acquisition or combination
transaction.
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Section 4. Stock Subject to the Plan.
(a) the total number of shares of Common Stock reserved and available for
distribution pursuant to the Plan shall be [269,953,132] shares, of which no
more than 10% of such Shares may be distributed pursuant to the grant of Stock
Purchase Rights./1/
(b) If any Shares that have been subject to issuance upon exercise of an
Option (other than a Substitute Award) cease to be subject to such Option, or
if any Shares of Restricted Stock or other Shares that are subject to any
Right, Option or Long-Term Performance Award granted hereunder (other than a
Substitute Award) are forfeited or repurchased or any such award otherwise
terminates or is paid or settled without a payment being made to the
Participant in the form of the full number of Shares underlying such awards,
such Shares to the extent of such forfeiture, termination or settlement, shall
again be available for distribution in connection with future awards or Option
grants under the Plan. For purposes of this Section 4(b), awards and options
granted under any of the Company's previous stock option plans (other than any
such plans for outside directors) shall be treated as Options, Rights or Long-
Term Performance Awards, as the case may be, acquired hereunder.
(c) Shares underlying Substitute Awards shall not reduce the number of
Shares available for distribution hereunder.
(d) In the event that any Option, Right or Long-Term Performance Award
granted hereunder (other than a Substitute Award) is exercised through the
surrender to the Company of Shares or in the event that withholding tax
liabilities arising in connection with any such award are satisfied by the
withholding of Shares by the Company, the number of Shares available for
distribution under the Plan as set forth in Section 4(a) shall be increased by
the number of Shares so surrendered or withheld.
(e) Options and SARs on no more than 25,000,000 shares of Common Stock may
be granted to any individual in any year under this Plan.
(f) (i) In the event that the Common Stock of the Company is split or
reverse-split, whether by stock dividend, combination, reclassification or
similar method not involving payment of consideration, the number of Shares
available for award under this Plan, in aggregate and individually as set
forth in Sections 4(a) and 4(e), the number of Shares deliverable under each
Option, Right or Long-Term Performance Award outstanding hereunder and the per
Share exercise price of each outstanding Option or Right shall automatically
be proportionately adjusted, subject to any required action by the Board or
the stockholders of the Company and compliance with Applicable Laws; provided,
however, that the number of Shares subject to any award denominated in Shares
shall always be a whole number.
(ii) In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Common Stock or other securities of
the Company, issuance of warrants or other rights to purchase Common Stock
or other securities of the Company, or other similar corporate transaction
or event other than an event described in Section 4(f)(i) affects the
Common Stock such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential
--------
/1/ The number of authorized shares under this Plan will equal that number
of authorized shares available for grant under the Company's 1991 Long-Term
Equity Incentive Plan (the "1991 Plan") as of the date this Plan becomes
effective. The number of authorized shares available for grant under the 1991
Plan as of August 21, 2000 is 269,953,132.
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benefits intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i)
the number and type of Shares (or other securities or property) which
thereafter may be made the subject of awards under the Plan, including the
aggregate and individual limits specified in Section 4, (ii) the number and
type of Shares (or other securities or property) subject to outstanding
awards, and (iii) the grant, purchase, or exercise price with respect to
any award or, if deemed appropriate, make provision for a cash payment to
the holder of an outstanding award; provided, however, that the number of
Shares subject to any award denominated in Shares shall always be a whole
number.
Section 5. Administration.
(a) The Plan shall be administered by one or more Committees designated by
the Board to administer the Plan, constituted in such a manner as to satisfy
the Applicable Laws.
(b) Once appointed, the Committee shall continue to serve until otherwise
directed by the Board. From time to time, the Board may change the size of the
Committee, appoint additional members thereof, remove members (with or without
cause), appoint new members in substitution therefor, fill vacancies, however
caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by Applicable Laws.
(c) As used herein, except in Sections 17 and 19, references herein to the
Board shall mean the Board or the Committee, whichever is then acting with
respect to the Plan.
(d) The Committee shall have the authority to construe and interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan, and any such interpretation shall be final and
binding on all persons having an interest in any award under this Plan.
Without limiting the generality of the foregoing, subject to the general
purposes, terms, and conditions of the Plan, and to the direction of the
Board, the Committee shall have full power to implement and carry out the Plan
including, but not limited to, the following:
(i) to select the employees, officers, consultants, directors and
advisers of the Company and/or its Subsidiaries and Affiliates to whom
Options, Rights and Long-Term Performance Awards, or any combination
thereof, may from time to time be granted hereunder;
(ii) to determine whether and to what extent Options, Rights and Long-
Term Performance Awards, or any combination thereof, are granted hereunder;
(iii) to determine the number of Shares to be covered by each such award
granted hereunder;
(iv) to approve forms of grant or agreement, or other forms for
communicating to Participants that they have been granted an award under
the Plan, for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any
vesting acceleration or waiver of forfeiture restrictions regarding the
Option or other award and/or the Shares relating thereto, based in each
case on such factors as the Committee shall determine, in its sole
discretion);
(vi) to determine whether and under what circumstances an Option may be
settled in cash or Restricted Stock under Section 6(g) instead of Common
Stock;
(vii) to determine the form of payment that will be acceptable
consideration for exercise of an Option, Right or Long-Term Performance
Award granted under the Plan;
(viii) to determine whether, or to what extent and under what
circumstances Common Stock and other amounts payable with respect to an
award under this Plan shall be deferred either automatically or at the
election of the Participant (including providing for and determining the
amount (if any) of any deemed earnings on any deferred amount during any
deferral period);
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(ix) to delegate to another committee of the Board or to members of
management certain of its powers hereunder to the extent permitted by
Applicable Laws;
(x) to reduce the exercise price of any Option or Right;
(xi) to determine the terms and restrictions applicable to Stock Purchase
Rights and the Restricted Stock purchased by exercising such Rights; and
(xi) to adopt sub-plans applicable to particular Subsidiaries, Affiliates
or locations, which sub-plans may take precedence over other provisions of
this Plan, with the exception of Section 4(a), but unless otherwise
superseded by the terms of such sub-plan, the provisions of this Plan shall
govern the operation of such sub-plan.
(e) In addition to such other rights of indemnification as they may have as
directors, members of the Committee shall be indemnified by the Company
against any reasonable expenses, including attorneys' fees actually and
necessarily incurred, which they or any of them may incur by reason of any
action taken or failure to act under or in connection with the Plan or any
option or other award granted thereunder, and against all amounts paid by them
in settlement of any claim related thereto, (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by them
in satisfaction of a judgment in any such action, suit or proceeding that such
director is liable for negligence or misconduct in the performance of his or
her duties; provided that within 60 days after institution of any such action,
suit or proceeding a director shall in writing offer the Company the
opportunity, at its own expense, to handle the defense of the same.
Section 6. Stock Options. The Committee, in its discretion, may grant
Options to eligible Participants and shall determine whether such Options
shall be Incentive Stock Options ("ISOs") within the meaning of the Code,
Nonqualified Stock Options ("NQSOs") or any other type of Option which may
exist from time to time. Each Option shall be evidenced by a Grant which shall
expressly identify the Option as an ISO or as NQSO (or other type of Option,
as applicable), and be in such form and contain such provisions as the
Committee shall from time to time deem appropriate. Without limiting the
foregoing, the Committee may, at any time, or from time to time, authorize the
Company, with the consent of the respective recipients, to issue new Options,
including Options in exchange for the surrender and cancellation of any or all
outstanding Options or Rights.
The Committee shall determine the number of Shares subject to the Option,
the exercise price of the Option, the period during which the Option may be
exercised, and all other terms and conditions of the Option, subject to the
following:
(a) Form of Option Grant. Each Option granted under this Plan shall be
evidenced by a Grant in such form (which need not be the same for each
Participant) as the Committee shall from time to time approve, which Grant
shall comply with and be subject to the terms and conditions of this Plan.
(b) Date of Grant. The date of grant of an Option shall be the date on which
the Committee makes the determination to grant such Option unless otherwise
specified by the Committee. The Grant representing the Option will be
delivered to Participant with a copy of this Plan within a reasonable time
after the granting of the Option.
(c) Exercise Price. The exercise price of an Option shall be determined by
the Committee on the date the Option is granted and may be less than the Fair
Market Value of the Common Stock on the date the Option is granted.
(d) Exercise Period. Options shall be exercisable within the times or upon
the events determined by the Committee as set forth in the Grant; provided,
however; that no Option shall be exercisable after the expiration of ten (10)
years from the date the Option is granted. The Committee may attach such
conditions to the Shares issued upon exercise of an Option as it shall
determine, and may provide in any grant for Option exercise restrictions to be
waived in consideration of equivalent transfer or forfeiture provisions to be
applied to such underlying Shares.
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<PAGE>
(e) Limitations on ISOs. The terms of any ISO granted under the Plan shall
comply in all respects with the provisions of Section 422 of the Code, or any
successor provision thereto, and any regulations promulgated thereunder.
(f) Limitations on Transfer. Options granted under this Plan, and any
interest therein, shall not be transferable or assignable by the Participant,
and may not be made subject to execution, attachment or similar process,
otherwise than by will or by the laws of descent and distribution, and shall
be exercisable during the lifetime of the Participant only by the Participant;
provided, however; that NQSOs held by a Participant may be transferred to such
family members, trusts and charitable institutions as the Committee, in its
sole discretion, shall approve, unless otherwise restricted from such transfer
under the terms of the Grant.
(g) Buyout Provisions. The Committee may at any time offer to buy out for a
payment in cash or Common Stock (including Restricted Stock), an Option
previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the Participant at the time that such offer is
made.
(h) Notice. Options may be exercised only by delivery to the Company or its
representative of a stock option exercise instrument in a form approved by the
Committee from time to time (which may be in written, electronic or other form
selected by the Committee from time to time and need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares, if any, and such representations and agreements
regarding Participant's investment intent and access to information, if any,
as may be required by the Company to comply with the Applicable Laws, together
with payment in full of the exercise price for the number of Shares being
purchased or adequate provision therefor, in accordance with Section 6(i).
(i) Payment. Payment for Shares purchased upon exercise of an Option may be
made in cash (by check) or, unless otherwise provided by the Committee in its
sole discretion: (i) by cancellation of indebtedness of the Company to the
Participant; (ii) by surrender of Shares of Common Stock having a Fair Market
Value equal to the applicable exercise price of the Options; (iii) where
approved by the Committee in its sole discretion, by tender of a full recourse
promissory note having such terms as may be approved by the Committee and
bearing interest at a rate sufficient to avoid imputation of income under
Sections 483 and 1274 of the Code, provided that the portion of the exercise
price equal to the par value of the Shares, if any, must be paid in cash or
other legal consideration, and provided further that Participants who are not
employees or directors of the Company shall not be entitled to purchase Shares
with a promissory note unless the note is adequately secured by collateral
other than the Shares; (iv) by waiver of compensation due or accrued to the
Participant for services rendered; (v) pursuant to a broker-assisted "cashless
exercise" arrangement; or (vi) by any combination of the foregoing, in each
such case to the extent permitted by Applicable Law.
(j) Limitations on Exercise. In addition to exercise restrictions or other
vesting provisions set forth in any Grant, unless the Committee shall
otherwise determine, and except in the case of a Substitute Award, the
exercisability of an Option following termination of the Participant's
employment shall be subject to this Section 6(j).
(i) If the Participant ceases to be employed by the Company or any
Parent, Subsidiary or Affiliate of the Company for any reason except death
or disability, such Participant's Options may be exercised to the extent
(and only to the extent) that they would have been exercisable upon the
date of termination of the Participant's employment, within three (3)
months after the date of termination (or such shorter time period as may be
specified in the Grant), but in any event no later than the expiration date
of the Option.
(ii) If the Participant's employment with the Company or any Parent,
Subsidiary or Affiliate of the Company is terminated because of the
Disability of the Participant, or if the Participant dies within three (3)
months of his termination of employment, the Participant's Options may be
exercised to the extent (and only to the extent) that they would have been
exercisable on the date of termination of the Participant's employment, by
the Participant (or the Participant's legal representative) within twelve
(12) months after
B-7
<PAGE>
the date of termination of employment (or such shorter time period as may
be specified in the Grant), but in any event no later than the expiration
date of the Options.
(iii) If the Participant's employment with the Company or any Parent,
Subsidiary or Affiliate of the Company is terminated because of the death
of the Participant, the Participant's Options may be exercised to the
extent (and only to the extent) that they would have been exercisable on
the first vesting date occurring after such death as may be specified in
the Grant and on the next subsequent vesting date, by the Participant's
legal representative within twelve (12) months after the date of death (or
such shorter period as may be specified in the Grant), but in any event no
later than the expiration date of the Options.
(iv) A Participant's employment relationship shall be considered to have
terminated, and the Participant to have ceased to be employed by his or her
employer, on the earliest of:
(A) the date on which the Company, or any Parent, Subsidiary or
Affiliate of the Company, as appropriate, delivers to the Participant
notice in a form prescribed by the Company that the Company, or such
other entity, is thereby terminating the employment relationship
(regardless of whether the notice or termination is lawful or unlawful
or is in breach of any contract of employment),
(B) the date on which the Participant delivers notice in a form
prescribed by the Company, to the Company, or any Parent, Subsidiary or
Affiliate of the Company, as appropriate, that he or she is terminating
the employment relationship (regardless of whether the notice or
termination is lawful or unlawful or is in breach of any contract of
employment),
(C) the date on which the Participant ceases to provide services to
the Company, or any Parent, Subsidiary or Affiliate of the Company, as
appropriate, except where the Participant is on an authorized leave of
absence, or
(D) the date on which the Participant ceases to be considered an
"employee" under Applicable Law.
The Committee shall have discretion to determine whether a Participant has
ceased to be employed by the Company or any Parent, Subsidiary or Affiliate of
the Company, as appropriate, and the effective date on which such employment
terminated or whether such Participant is on an authorized leave of absence.
(v) In the case of a Participant who is a director, consultant, or
adviser, the Committee will have the discretion to determine whether the
Participant is "employed by the Company or any Parent, Subsidiary or
Affiliate of the Company" pursuant to the foregoing Sections.
(vi) The Committee may specify a reasonable minimum number of Shares that
may be purchased on any exercise of an Option, provided that such minimum
number will not prevent the Participant from exercising the full number of
Shares as to which the Option is then exercisable.
(k) Modification, Extension and Renewal of Options. The Committee shall have
the power to modify, extend or renew outstanding Options and to authorize the
grant of new Options in substitution therefore, provided that any such action
may not, without the written consent of the holder, impair any rights under
any Option previously granted.
Section 7. Stock Appreciation Rights. The Committee, in its discretion, may
grant Stock Appreciation Rights to eligible Participants. The following
provisions apply to such Stock Appreciation Rights.
(a) Grant of Stock Appreciation Right. The Stock Appreciation Right shall
entitle the holder upon exercise to an amount for each Share to which such
exercise relates equal to the excess of (x) the Full Market Value on the date
of exercise of a Share over (y) the base or exercise price of the Common Stock
as set forth in the applicable Grant. Notwithstanding the foregoing, the
Committee may place limits on the amount that may be paid upon exercise of a
Stock Appreciation Right.
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(b) Forfeiture of Option. If a Stock Appreciation Right is granted in tandem
with an Option, upon exercise of such Stock Appreciation Right, the related
Option shall no longer be exercisable and shall be deemed canceled to the
extent of such exercise.
(c) Form of Payment. The Company's obligation arising upon the exercise of a
Stock Appreciation Right may be paid currently or on a deferred basis with
such interest or earnings equivalent as may be determined by the Committee,
and may be paid in Common Stock or in cash, or in any combination of Common
Stock and cash, as the Committee, in its sole discretion, may determine.
(d) Other Provisions. The Grant evidencing a Stock Appreciation Rights shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Committee in its sole discretion. The
provisions of such Grants need not be the same with respect to each recipient.
Section 8. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights to purchase Restricted Stock
may be issued either alone, in addition to, or in tandem with other awards
granted under the Plan. After the Committee determines that it will offer
Stock Purchase Rights under the Plan, it shall advise the offeree in writing
of the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price to
be paid, and the time within which such person must accept such offer, which
shall in no event exceed 60 days from the date the Stock Purchase Right was
granted. The offer shall be accepted by execution of a Restricted Stock
Purchase Agreement (the "Purchase Agreement") in the form determined by the
Committee.
(b) Repurchase Option. Unless the Committee determines otherwise, the
Purchase Agreement shall grant the Company a repurchase option exercisable
upon the voluntary or involuntary termination of the purchaser's employment
with the Company for any reason (including death or Disability). The purchase
price for Shares repurchased pursuant to the Purchase Agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall
lapse at such rate as the Committee may determine.
(c) Other Provisions. The Purchase Agreement shall contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined
by the Committee in its sole discretion. The provisions of Purchase Agreements
need not be the same with respect to each purchaser.
Section 9. Long-Term Performance Awards.
(a) Administration. Long-Term Performance Awards are stock bonus awards that
may be granted either alone or in addition to other awards granted under the
Plan. The Committee shall determine the nature, length and starting date of
any performance period (the "Performance Period") for each Long-Term
Performance Award, and shall determine the performance factors to be used in
the determination of a Long-Term Performance Award and the extent to which
such Long-Term Performance Awards have been earned. Long-Term Performance
Awards may vary from Participant to Participant and between groups of
Participants and shall be based upon the achievement of Company, Parent,
Subsidiary or Affiliate, or upon such individual performance factors or upon
such other criteria as the Committee may deem appropriate. Performance Periods
may overlap and Participants may participate simultaneously with respect to
Long-Term Performance Awards that are subject to different Performance Periods
and different performance factors and criteria. Long-Term Performance Awards
shall be confirmed by, and be subject to the terms of, a Long-Term Performance
Award agreement. The terms of such awards need not be the same with respect to
each Participant.
At the beginning of each Performance Period, the Committee shall determine
for each Long-Term Performance Award subject to such Performance Period, the
number of Shares to be awarded to the Participant at the end of the
Performance Period if and to the extent that the relevant measures of
performance for such Long-Term Performance Award are met. Such number of
shares of Common Stock may be fixed or may vary in accordance with such
performance or other criteria as maybe determined by the Committee.
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(b) Adjustment of Awards. The Committee may adjust the performance factors
applicable to the Long-Term Performance Awards to take into account changes in
law, accounting and tax rules and to make such adjustments as the Committee
deems necessary or appropriate to reflect the inclusion or exclusion of the
impact of extraordinary or unusual items, events or circumstances in order to
avoid windfalls or hardships.
(c) Termination. Unless otherwise provided in the applicable Long-Term
Performance Award agreement, if a Participant terminates his or her employment
or his or her consultancy during a Performance Period because of death or
Disability, the Committee may provide for an earlier payment in settlement of
such award in such amount and under such terms and conditions as the Committee
deems appropriate.
Except as otherwise provided in the applicable Long-Term Performance Award
agreement, if a Participant terminates employment or his or her consultancy
during a Performance Period for any other reason, then such Participant shall
not be entitled to any payment with respect to the Long-Term Performance Award
subject to such Performance Period, unless the Committee shall otherwise
determine.
(d) Form of Payment. The earned portion of a Long-Term Performance Award may
be paid currently or on a deferred basis with such interest or earnings
equivalent as may be determined by the Committee. Payment shall be made in the
form of cash, whole Shares, including Restricted Stock, or a combination
thereof, either in a lump sum payment or in installments, all as the Committee
shall determine.
Section 10. Withholding Taxes.
(a) Withholding Generally. The Company shall have the right to withhold or
require the recipient to remit to the Company an amount sufficient to satisfy
federal, state, or local withholding tax requirements arising in connection
with the grant, exercise or settlement of any award under the Plan prior to
the delivery of any certificate or certificates for Shares or other amounts
hereunder.
(b) Stock Withholding. When a Participant incurs tax liability in connection
with the exercise or vesting of any Option, Right or Long-Term Performance
Award, which tax liability is subject to tax withholding under applicable tax
laws, and the Participant is obligated to pay the Company an amount required
to be withheld under applicable tax laws, the Participant may satisfy the
withholding tax obligation by electing to have the Company withhold from the
Shares otherwise to be delivered that number of Shares having a Fair Market
Value equal to the amount required to be withheld, determined on the date that
the amount of tax to be withheld is to be determined; provided however that
the Company shall not allow withholding of Shares (i) upon exercise or vesting
of any Option, Right or Long-Term Performance Award in an amount which exceeds
the minimum statutory withholding rates for federal, state and local tax
purposes, including payroll taxes or (ii) if such withholding is not permitted
under local laws. All elections by a Participant to have Shares withheld for
this purpose shall be made in accordance with procedures established by the
Committee from time to time.
Section 11. Change of Control. Unless specifically provided to the contrary
in any Grant or Purchase Agreement, upon a Change of Control, (a) unless
outstanding Options and Rights are effectively assumed by the surviving or
acquiring corporation or otherwise remain outstanding, such Options and Rights
shall become fully vested and exercisable, and any repurchase or resale
restrictions applicable to any award granted hereunder shall automatically
lapse and such Options or Rights shall expire on the consummation of such
Change of Control transaction at such times and on such conditions as the
Committee shall determine and (b) if an Option or Right is effectively so
assumed or remains outstanding, and the Participant's employment is terminated
(within the meaning of Section 6 hereof) by the surviving or acquiring
corporation without cause within twelve (12) months after the consummation of
such Change of Control transaction, such Option or Right shall accelerate and
become immediately and fully exercisable, and any repurchase or resale
restrictions applicable to any such award shall automatically lapse, upon such
termination.
Section 12. Employment Relationship. Nothing in the Plan or any award made
hereunder shall interfere with or limit in any way the right of the Company or
of any Parent, Subsidiary or Affiliate to terminate any
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Participant's employment or consulting relationship at any time, with or
without cause, nor confer upon any Participant any right to continue in the
employ or service of the Company or any Parent, Subsidiary or Affiliate.
Section 13. General Restriction. Each award shall be subject to the
requirement that, if, at any time, the Committee shall determine, in its
discretion, that the listing, registration, or qualification of the Shares
subject to such award upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, such award or
the issue or purchase of Shares thereunder, such award may not be exercised or
paid in whole or in part unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any
conditions not acceptable to the Committee. The Committee shall be under no
obligation to obtain or seek such listing, registration, qualification,
consent or approval.
Section 14. Rights as a Stockholder. The holder of an Option, Right or Long-
Term Performance Award shall have no rights as a stockholder with respect to
any Shares covered by the Option, Right or Long-Term Performance Award until
the Shares subject to such award have been entered upon the records of the
duly authorized transfer agent of the Company. Except as otherwise expressly
provided in the Plan, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate
so entered.
Section 15. Limitations on Assignment of Awards. Except as otherwise
provided in Section 6(f) hereof, no awards made hereunder shall be assignable
or transferable by the Participant except by will or by the laws of descent
and distribution and as otherwise consistent with the specific Plan provisions
relating thereto or as the Committee in its sole discretion shall approve.
During the life of the Participant, an Option, Right or Long-Term Performance
Award shall be exercisable only by him or her, or by a transferee as permitted
by Section 6(f) hereof and any award agreement.
Section 16. Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board, the submission of the Plan to the stockholders of the Company for
approval, nor any provisions of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including without limitation,
arrangements providing for the granting of Options otherwise than under the
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.
Section 17. Adoption and Stockholder Approval. This Plan shall become
effective on the date that it is adopted by the Board of the Company and
approved by the stockholders of the Company, in any manner permitted by
applicable corporate law.
Section 18. Term of Plan. Awards may be granted pursuant to this Plan from
time to time prior to the expiration hereof, which shall occur on the date of
the Company's Annual Meeting of Stockholders in 2010.
Section 19. Amendment or Termination of Plan.
(a) Except to the extent prohibited by applicable law and unless otherwise
expressly provided in a Grant or Purchase Agreement or in the Plan, the Board
may amend, alter, suspend, discontinue, or terminate the Plan or any portion
thereof at any time, provided, however, that no such amendment, alteration,
suspension, discontinuation or termination shall be made without (i)
stockholder approval if such approval is necessary to comply with any tax or
regulatory requirement for which or with which the Board deems it necessary or
desirable to qualify or comply, or (ii) the consent of the affected
Participant, if such action would adversely affect the rights of such
Participant under any outstanding award. Notwithstanding anything to the
contrary herein, the Committee or its delegee may amend the Plan and/or adopt
subordinate arrangements, policies and programs in each case subject to the
authority set forth in Section 4 hereof, in such manner as may be necessary to
enable the Plan to achieve its stated purposes in any jurisdiction outside the
United States in a tax-efficient manner and in compliance with local rules and
regulations by adopting schedules of provisions to be applicable to awards
granted in such jurisdiction.
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(b) The Committee may waive any conditions or rights under, amend any term
of, or amend, alter, suspend, discontinue or terminate, any award theretofore
granted, prospectively or retroactively, without the consent of any relevant
Participant or holder or beneficiary of an award, provided, however, that no
such action shall impair the rights of any affected Participant or holder or
beneficiary under any award theretofore granted under the Plan.
B-12
<PAGE>
4290-PS20 ____________________________________________________________C13-933-01
<PAGE>
[proxy card - front]
ORACLE CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 16, 2000
The undersigned hereby appoints LAWRENCE J. ELLISON 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 16, 2000, at 10:00 a.m., in the Oracle Corporation
Conference Center, 350 Oracle Parkway, 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, FOR THE ADOPTION OF THE COMPANY'S 2000 LONG-
---
TERM EQUITY INCENTIVE PLAN, FOR THE RATIFICATION OF THE APPOINTMENT OF ARTHUR
---
ANDERSEN LLP, AND AGAINST THE STOCKHOLDER PROPOSAL.
-------
<PAGE>
[proxy card - back]
(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,
Jeffrey O. Henley, Jack F. Kemp, Jeffrey Berg, Richard McGinn and Kay
Koplovitz.
(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 2000 LONG-TERM
EQUITY INCENTIVE PLAN
__FOR __AGAINST __ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR
ENDING MAY 31, 2001
__FOR __AGAINST __ABSTAIN
4. THE STOCKHOLDER PROPOSAL "THE US BUSINESS PRINCIPLES FOR HUMAN RIGHTS
OF WORKERS IN CHINA"
__FOR __AGAINST __ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any
adjournment or continuation 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:_______________, 2000
____________________________
____________________________
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.
