Exhibit 10.02

 

ORACLE CORPORATION

 

1993 DIRECTORS’ STOCK OPTION PLAN

(as amended and adjusted for stock splits through April 11, 2003)

 

1.    Establishment and Purpose.

  (a)   Establishment. There is hereby adopted the 1993 Directors’ Stock Option
Plan (the “Plan” of Oracle Corporation, a Delaware corporation (the “Company”).
The Plan is intended to provide a means whereby eligible members of the Board of
Directors of the Company may be given an opportunity to purchase shares of
Common Stock of the Company pursuant to options which are not intended to
qualify as incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended.

  (b)   Purpose. The purpose of the Plan is to enable the Company to attract and
retain the best available individuals for service as members of the Board of
Directors of the Company, to provide additional incentive to such individuals
while serving as directors, and to encourage their continued service on the
Board of Directors.

2.    Definitions.

 

As used herein, the following definitions shall apply:

 

  (a)   “Board” shall mean the Board of Directors of the Company.

 

  (b)   “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

  (c)   “Committee” shall mean the Committee or Committees referred to in
Section 4 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.

 

  (d)   “Common Stock” shall mean the Common Stock, $.01 par value per share, of
the Company.

 

  (e)   “Continuous Status as a Director” shall mean the absence of any
interruption or termination of service as a Director.

 

  (f)   “Director” shall mean a member of the Board.

 

  (g)   “Employee” shall mean any person, including officer and Directors, who
is an employee of the Company, or any Subsidiary of the Company, for purposes of
tax withholding under the Code. The payment of a director’s fee by the Company
shall not be sufficient to and in of itself to constitute “employment” by the
Company.

 

  (h)   “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

  (i)   “Fair Market Value” shall mean, 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

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  (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 Committee it its
discretion.

 

  (j)   “Option” shall mean an option to purchase shares of Common Stock granted
pursuant to the Plan.

 

  (k)   “Optioned Stock” shall mean the Common Stock subject to an Option.

 

  (l)   “Optionee” shall mean an Outside Director who receives an Option.

 

  (m)   “Outside Director” shall mean a Director who is not an Employee.

 

  (n)   “Parent” shall mean a “parent corporation” whether now or hereafter
existing, as defined in Section 424(e) of the Code.

 

  (o)   “Securities Act” shall mean the Securities Act of 1933, as amended.

 

  (p)   “Share” shall mean a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

 

  (q)   “Significant Committees” shall mean the Executive Committee and the
Finance and Audit Committee of the Board.

 

  (r)   “Subsidiary” shall mean a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the Code.

 

3.    Shares Subject to the Plan.

 

Subject to the provisions of Section 13 of the Plan, the maximum number of
Shares which may be optioned and sold under the Plan is 20,250,000 shares of
Common Stock. If an Option expires or becomes unexercisable for any reason and
has not been exercised in full, the Shares subject to such Options shall become
available for future grant under the Plan. If Shares which were acquired upon
exercise of an Option are subsequently repurchased by the Company, such Shares
shall not become available for future grant under the Plan.

 

4.    Administration of the Plan.

 

  (a)   Administrator. The Plan shall be administered by the Board or by the
Committee appointed by the Board, which shall consist of two or more members of
the Board. The Committee shall select one of its members as chairman, and shall
hold meetings at such times and places as it may determine. A majority of the
Committee shall constitute a quorum and acts of the Committee at which a quorum
is present, or acts reduced to or approved in writing by all the members of this
Committee, shall be the valid acts of the Committee.

 

  (b)   Powers of the Committee. Subject to the provisions and restrictions of
the Plan, the Committee shall have the authority, in its discretion, to: (i)
determine the Fair Market Value of the Common Stock; (ii) determine the exercise
price per Share; (iii) interpret the Plan; (iv) subject to Section 14, amend the
Plan or any Option; (v) authorize any person to execute on behalf of the Company
any agreements or other documents in connection with the grant of an Option
under the Plan; (vi) approve forms of agreement for use under the Plan; and
(vii) make all other determinations deemed necessary or advisable for the
administration of the Plan.

 

  (c)   Effects of Committee’s Decision. All decisions, determinations and
interpretations of the Committee shall be final and binding on all holders of
any Options granted under the Plan.

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5.    Option grants.

 

  (a)   Automatic Grants. All Grants of Options hereunder shall be automatic and
nondiscretionary and shall be made strictly in accordance with the provisions of
this Section 5. No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.

 

  (b)   Initial Grants. Each individual who becomes an Outside Director after
August 8, 2001, as of the date on which such person becomes an Outside Director
shall be granted automatically an Option to purchase 80,000 shares.

 

  (c)   Subsequent Grants.

 

  (i)   On May 24, 2003, each Outside Director shall be granted automatically an
option to purchase 40,000 shares, provided that on such date the Outside
Director has served on the Board for at least six months.

 

  (ii)   On May 24, 2003, each Outside Director that is the Chairman of both
Significant Committees shall be granted automatically an Option to purchase
100,000 shares, provided that on such date the Outside Director has served as
the Chairman of both Significant Committees for at least one year. This grant of
100,000 shares shall be in lieu of and not in addition to the options granted
under Section 5(c)(i) hereof.

 

  (iii)   On May 24, 2003, the Chairman of the Compensation Committee shall be
granted automatically an Option to purchase 80,000 shares, provided that on such
date the Outside Director has served on the Compensation Committee for at least
one year. This grant of 80,000 shares shall be in lieu of and not in addition to
the options granted under Section 5(c)(i) hereof.

 

  (iv)   On May 24, 2003, the Vice Chairman of the Finance and Audit Committee
shall be granted automatically an Option to purchase 60,000 shares, provided
that on such date the Outside Director has served in such capacity for at least
six months. This grant of 60,000 shares shall be in lieu of and not in addition
to the options granted under Section 5(c)(i) hereof.

 

  (d)   Limitations.

 

  (i)   Notwithstanding the provisions of Sections 5(b) and 5(c) hereof, in the
event that a sufficient number of Shares is not available under the Plan, the
remaining Shares shall be prorated based upon the number of Shares each Director
was entitled to receive under this Plan. Any further grants shall then be
deferred until such time, if any, as additional Shares become available for
grant under the Plan. Subject to the terms of Section 14 hereof, the Board shall
have the authority at any time to make additional Shares available for grant
under the Plan, subject to obtaining stockholder approval of such increase to
the extent required under Section 14(a) hereof.

 

  (ii)   Notwithstanding the provisions of Section 5(b) and 5(c) hereof, any
grant of an Option made before the Company has obtained stockholder approval of
the Plan and any grant of an Option made after amendment of the Plan where such
amendment of the Plan requires stockholder approval under Section 14(a) hereof
shall be conditioned upon obtaining such stockholder approval.

 

6.    Terms and Conditions of Options.

 

  (a)   Stock Option Agreement. Each Option granted pursuant to this Plan shall
be evidenced by a written stock option agreement (“Stock Option Agreement”)
executed by the Company and the Outside Director containing such terms and
conditions that are consistent with this Plan and as otherwise determined by the
Committee.

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  (b)   Exercise Price. The exercise price per share shall be the greater of (i)
100% of the Fair Market Value per Share on the date of grant of the Option or
(ii) 100% of the Fair Market Value per Share on May 31, 2003, subject to
adjustment to the extent provided in Section 13 hereof.

 

  (c)   Vesting. The Shares shall vest and become exercisable at the rate of
twenty-five percent (25%) of the Optioned Stock on each anniversary of the date
of grant.

 

  (d)   Term. The term of each Option shall be ten (10) years from the date of
grant, unless a shorter period is required to comply with any applicable law, in
which case such shorter period will apply.

 

7.   Eligibility. Options may be granted only to Outside Directors. The Plan
shall not confer upon any Outside Director any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.

 

8.   Term of Plan; Effective Date. The Plan shall become effective on May 24,
1993. Options may be granted under this Plan at any time on or before May 24,
2003.

 

9.   Payment Upon Exercise. Payment of the exercise price upon exercise of any
Option shall be made (i) by cash or check; (ii) provided that a public market
for the Company’s stock exists, through a “same day sale” commitment from the
Optionee and a broker-dealer that is a member of the National Association of
Securities Dealers (an “NASD Dealer”) whereby Optionee irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the exercise price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the exercise price directly to the Company; (iii)
provided that a public market for the Company’s stock exists, through a “margin”
commitment from the Optionee and an NASD Dealer whereby the Optionee irrevocably
elects to exercise the Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD Dealer in the
amount of the exercise price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the exercise price directly to the
Company; (iv) where permitted by applicable law, by tender of a full recourse
promissory note secured by collateral other than the Shares 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 must
be paid in cash or other legal consideration; or (v) in any combination of the
foregoing.

 

10.   Withholding Taxes. Whenever, under the Plan, Shares are to be issued in
satisfaction of the exercise of Options granted hereunder, the Company shall
have the right to require the recipient to remit to the Company an amount of
cash sufficient to satisfy any applicable federal, state or local income and
employment tax withholding requirements prior to the delivery of any certificate
or certificates for such Shares.

 

11.   Exercise of Option.

 

  (a)   Procedure for Exercise. An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option agreement by the person entitled to exercise the Option
and full payment for the Shares has been received by the Company in accordance
with Section 9 hereof. An Option may not be exercised for a fraction of a Share.

 

  (b)   Rights as a Stockholder. Notwithstanding the exercise of the Option,
until the issuance (as evidenced by the appropriate entry on the books of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock. A stock certificate
for the number of Shares so acquired shall be issued to the Optionee as soon as
practicable after exercise of the Option. No adjustment will be made for a
dividend or other right if the record date is prior to the date the stock
certificate is issued.

 

  (c)  

Termination of Status as Director. If an Outside Director ceases to serve as a
Director, he or she may, but only within three (3) months (or such other period
of time not exceeding six (6) months as is determined by the Board) after the
date he or she ceases to be a Director of the Company, exercise his or her
Option to the

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extent that he or she was entitled to exercise it at the date of such
termination. Notwithstanding the foregoing, in no event may the Option be
exercised after its term set forth in Section 6 has expired. To the extent that
such Outside Director was not entitled to exercise and Option at the date of
termination, or if Optionee does not exercise such Option (which he or she was
entitled to exercise) within the time specified, the Option shall terminate.

 

  (d)   Disability of Director. Notwithstanding the provisions of Section 11(c)
above, in the event an Outside Director is unable to continue his service as a
Director with the Company as a result of his total and permanent disability (as
defined in Section 22(e)(3) of the Code), he may, within six months from the
date of such termination, exercise his Option to the extent he was entitled to
exercise it at the date of such termination. Notwithstanding the foregoing, in
no event may the Option be exercised after the expiration of the term set forth
in Section 6. To the extent that Optionee was not entitled to exercise the
Option at the date of termination, or if Optionee does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.

 

  (e)   Death of Optionee. In the event of the death of an Outside Director:

 

  (i)   If the Outside Director dies during the term of the Option, is a
Director at the time of his death and has been in Continuous Status as a
Director since the date of grant of the Option, the Option may be exercised at
any time within six (6) months following the date of death by the Outside
Director’s estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent the Outside Director was
entitled to exercise the Option at the date of termination. Notwithstanding the
foregoing, in no event may the Option be exercised after the expiration of the
term set forth in Section 6.

 

  (ii)   If the Outside Director dies within three (3) months after the
termination of Continuous Status as a Director, the Option may be exercised at
any time within six (6) months following the date of death by the Optionee’s
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Outside Director was entitled to
exercise the Option at the date of termination. Notwithstanding the foregoing,
in no event may the Option be exercised more than ten (10) years after its date
of grant.

 

12.   Nontransferability of Options. Options granted under this Plan, and any
interest therein, shall not be transferable or assignable by the Optionee, 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 Optionee only by the Optionee; provided,
however; that Options held by an Optionee 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. The designation of a beneficiary by an Optionee does not
constitute a transfer.

 

13.   Adjustment Upon Changes in Capitalization.

 

  (a)   Adjustment of Shares. In the event that 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
available under this Plan, the number of Shares deliverable in connection with
any Option and the exercise price per share of such Options shall be
proportionately adjusted, subject to any required action by the Board or
stockholders of the Company and compliance with applicable securities laws;
provided however, that no certificate or scrip representing fractional shares
shall be issued and any resulting fractions of a share shall be ignored.

 

  (b)  

Assumption. In the event of a dissolution or liquidation of the Company, a
merger in which the Company is not the surviving corporation (other than a
merger with a wholly owned subsidiary or where there is no substantial change in
the stockholders of the Company and the obligations of the Company under this
Plan are assumed by the successor corporation), the sale of substantially all of
the assets of the Company, or any other transaction described under Section
424(a) of the Code wherein the stockholders of the Company give up all of their
equity interest in the Company (except for the acquisition of all or
substantially all of the

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outstanding shares of the Company), all outstanding Options, notwithstanding any
contrary terms of the Plan, shall accelerate and become exercisable in full
prior to and shall expire on the consummation of such dissolution, liquidation,
merger or sale of assets.

 

  (c)   Acceleration Upon Unfriendly Takeover. Notwithstanding anything in
Section 13(b) hereof to the contrary, if fifty percent (50%) or more of the
outstanding voting securities of the Company become beneficially owned (as
defined in Rule 13d-3 promulgated by the Securities and Exchange Commission) by
a person (as defined in Section 2(2) of the Securities Act and in Section
13(d)(3) of the Exchange Act) in a transaction or series of transactions
expressly disapproved by the Board, then all outstanding Options under this Plan
shall become immediately exercisable with no further act or action required by
the Committee.

 

14.   Amendment and Termination of the Plan.

 

  (a)   Amendment. The Board or the Committee may amend the Plan from time to
time in such respects as the Board or the Committee, as the case may be, may
deem advisable; provided that, to the extent necessary to comply with Rule 16b-3
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the Company’s stockholders to amend the Plan to the
extent and in the manner required by such law or regulation.

 

  (b)   Termination or Suspension. The Committee, without further approval of
the stockholders, may at any time terminate or suspend the Plan. Except as
otherwise provided herein, any such termination or suspension of the Plan shall
not affect Options already granted hereunder and such Options shall remain in
full force and effect as if the Plan had not been terminated or suspended.

 

  (c)   Outstanding Options. Except as otherwise provided herein, rights and
obligations under any outstanding Option shall not be altered or impaired by
amendment, suspension or termination of the Plan, except with the consent of the
person to whom the Option was granted. The Committee shall have the authority to
modify, extend or renew outstanding Options and to authorize the grant of new
Options in substitution therefor.

 

15.   Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act, the
Exchange Act, the rules and regulations promulgated thereunder, state securities
laws, and the requirements of any stock exchange upon which the Shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

 

As a condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the relevant provisions
of the law.

 

Inability of the Company to obtain authority from any regulatory body having
jurisdictional authority deemed by the Company’s counsel to be necessary for the
lawful issuance and sale of any Shares hereunder shall relieve the Company of
any liability for failure to issue or sell such Shares.

 

16.   Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

 

17.   Stockholder Approval. This Plan shall be approved by the stockholders of
the Company, in any manner permitted by applicable corporate law, within twelve
months after the date this Plan is adopted by the Board. In the event that
stockholder approval is not obtained within the time period provided herein, all
awards previously granted hereunder shall terminate.

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18.   Additional Restrictions of Rule 16b-3. The terms and conditions of options
granted hereunder to persons subject to Section 16 of the Exchange Act shall
comply with the applicable provisions of Rule 16b-3. This Plan and the options
granted hereunder shall be deemed to contain such additional conditions and
restrictions as may be required for this Plan to qualify as a “formula plan”
under Rule 16b-3, as then applicable to the Company, and to qualify for the
maximum exemptions from Section 16 of the Exchange Act with respect to Plan
transactions.