Document:

exv10w07

 

Exhibit 10.07

ORACLE CORPORATION AMENDED AND RESTATED

2000 LONG-TERM EQUITY INCENTIVE PLAN

SECTION 1. Purpose. This Amended and Restated 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 stock 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
Stock 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 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.

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	 	(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 Stock 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 Stock Award” means an award under Section 9 below. A
Long-Term Stock Award includes stock bonus and unit awards. A stock
bonus is a right to receive shares of Common Stock that is subject to
time and/or performance restrictions. A unit award shall be similar to
the stock bonus award, except that no shares of Common Stock are
actually awarded at grant; the recipient is granted a right to receive
shares of Common Stock in the future once certain time and/or
performance factors are met.
	 
	 	(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.
	 
	 	(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.

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	 	(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 Stock
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.

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, as of May 31, 2004, shall be
450,897,091 Shares.(1)

	(1)	 	The number of authorized shares under this Plan as of May 31, 2004 equals
450,897,091, which is the 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 became effective on October 16, 2000 (the
“Effective Date”), plus any additional shares which cease to be available
for issuance under the 1991 Plan between the Effective Date and May 31,
2004, less any shares which have been granted under this Plan between the
Effective Date and May 31, 2004.

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	 	(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 Stock 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
Stock Awards, as the case may be, acquired hereunder. Any NQSO that are
transferred to a third party in exchange for cash or other consideration
shall be removed from the Plan and the Shares shall not be available for
regrant under the Plan even if the transferred NQSO expire without
exercise.
	 
	 	(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 Stock 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
and Long-Term Stock Awards and Stock Purchase Rights on no more than
10,000,000 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 Stock 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 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.

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	 	(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 Stock 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 Stock 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;
	 
	 	(vi)	 	to determine the form of payment, if any, that will be acceptable
consideration for exercise of an Option, Right or Long-Term Stock
Award granted under the Plan;
	 
	 	(vii)	 	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);
	 
	 	(viii)	 	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;
	 
	 	(ix)	 	to determine the terms and restrictions applicable to Long-Term
Stock Awards, Stock Purchase Rights and the Restricted Stock purchased
by exercising such Rights; and
	 
	 	(x)	 	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.
	 
	 	(f)	 	Notwithstanding anything to the contrary in this Plan, up to 5% of
the Shares of Common Stock reserved and available for distribution under
this Plan (as set forth in Section 4) may be granted without regard to
any of the restrictions set forth in Sections 9(a)(ii) and 19(b)(ii).

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

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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.

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 not be less
than the Fair Market Value of the Common Stock on the date the Option is
granted; provided that (i) the exercise price may be 85% or greater of
the Fair Market Value of the Common Stock on the date the Option is
granted if any discount in the exercise price to the Fair Market Value
of the Common Stock on the date the Option is granted is in lieu of
salary or cash bonus and (ii) the exercise price may be less than the
Fair Market Value on the date the Option is granted with respect to
Options representing an aggregate of no more than 5% of the Shares of
Common Stock reserved and available for distribution under this Plan (as
set forth in Section 4).
	 
	 	(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.
	 
	 	(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. ISOs 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 either for or without consideration,
as the Committee, in its sole discretion, shall approve.
	 
	 	(g)	 	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(h).
	 
	 	(h)	 	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.

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	 	(i)	 	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(i).

	 	(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 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.

	 	(j)	 	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.

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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.
	 
	 	(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 Stock Awards.

	 	(a)	 	Administration. (i) Long-Term Stock Awards are stock bonus or stock
unit awards that may be granted either alone or in addition to other
awards granted under the Plan. The Committee shall determine the nature,
length, price (if any) and starting and ending dates of any restriction
period (the “Restriction Period") for each Long-Term Stock Award, and
shall determine the time and/or performance factors which must be met
for a Long-Term Stock Award, the maximum amount payable under the Award
and any targets for partial or full payment under such Award, and the
extent to which a Long-Term Stock Awards has been earned. Long-Term
Stock Awards may vary from Participant to Participant and between groups
of Participants. A Long-Term Stock Award performance factor, if any,
shall be based upon the achievement of performance goals by the Company,
Parent, Subsidiary or Affiliate, a business unit or units of the
Company, or upon such individual performance factors or upon such other
criteria as the Committee may deem appropriate. Restriction Periods may
overlap and Participants may participate simultaneously with respect to
Long-Term Stock Awards that are subject to different Restriction Periods
and different time and/or performance factors. Long-Term Stock Awards
shall be confirmed by, and be subject to the terms of, a Long-Term Stock
Award agreement. The terms of such agreements need not be the same with
respect to each Participant.

8

 

	 	(ii)	 	Notwithstanding the foregoing, the Restriction Period for any
Long-Term Stock Award shall be no less than (A) three years if the
Long-Term Stock Award vests or is earned based on the passage of time
and continued employment with or service to the Company (or any
Parent, Subsidiary or Affiliate) or (B) one year if the Long-Term
Stock Award vests or is earned on the basis of the achievement of
performance goals.
	 
	 	(iii)	 	At the beginning of each Restriction Period, the Committee shall
determine, for each Long-Term Stock Award subject to such Restriction
Period, the number of Shares to be awarded to the Participant or as to
which the restrictions shall lapse at the end of the Restriction
Period, if and to the extent that the relevant measures of time and/or
performance for such Long-Term Stock Award are met. Such number of
Shares of Common Stock may be fixed or may vary in accordance with
such time and/or performance or other criteria as may be determined by
the Committee.
	 
	 	(iv)	 	No Long-Term Stock Award may be sold, assigned, transferred,
pledged or otherwise encumbered during its Restriction Period,
provided, however, that a Long-Term Stock Awards held by a Participant
may be transferred either for or without consideration, during its
Restriction Period if the Committee, in its sole discretion, shall
approve.

	 	(b)	 	Qualified Performance-Based Long-Term Stock Awards. In the case of
any Long-Term Stock Awards made to any person who is or may become a
Named Executive during the Restriction Period before payment of the
Award, the Committee may grant Long-Term Stock Awards that are intended
to comply with the requirements of Code section 162(m) (“Qualified
Performance-Based Long-Term Stock Awards”). In such case, the Committee
shall condition the grant or vesting, as applicable, of the stock bonus
or unit upon the attainment of certain objectively determinable
performance goals established by the Committee that are conditioned upon
the satisfaction by the Company, Parent, Subsidiary, or Affiliate, or a
business unit or units of the Company, of one of more of the following
performance criteria (the “Qualified Performance Criteria”) during a
specified period of no less than three months: revenues, operating
expenses, return on assets, return on net assets, asset turnover, return
on equity, return on capital, market price appreciation of the Company’s
stock, economic value added, total stockholder return, net income,
pre-tax income, operating income, earnings per share, operating profit
margin, net income margin, sales margin (including both growth rates and
margin percentages), cash flow, market share, inventory turnover, sales
growth, capacity utilization, or increase in customer base. As
determined by the Committee, Qualified Performance Criteria shall be
derived from financial statements of the Company prepared in accordance
with generally accepted accounting principles applied on a consistent
basis, or, for Qualified Performance Criteria that cannot be so derived,
under a methodology established by the Committee prior to the issuance
of a Qualified Performance Based Long-Term Stock Award to a Named
Executive, the Committee shall make all calculation of actual payments
and shall certify in writing, prior to the payment of such Long-Term
Stock Awards, the extent, if any, to which the specified performance
goals have been met.
	 
	 	(c)	 	Adjustment of Awards. The Committee may adjust the time and/or
performance factors applicable to the Long-Term Stock 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.
In the case of any Qualified Performance-Based Long Term Stock Award,
the Committee may not increase the Common Stock that would otherwise be
payable upon achievement of the stated performance goal or goals, but
may reduce or eliminate the maximum Common Stock award due upon
attainment of the stated performance goals, basing such cutback either
upon subjective performance criteria, individual performance
evaluations, or any other standards that are provided in the terms of
the Long-Term Stock Award.
	 
	 	(d)	 	Termination. Unless otherwise provided in the applicable Long-Term
Stock Award agreement, if a Participant terminates his or her employment
or his or her consultancy during a Restriction 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 Stock Award
agreement, if a Participant terminates employment or his or her consultancy
during a Restriction Period for any other reason, then such Participant
shall not be entitled to any payment with respect to the Long-Term Stock
Award subject to such Restriction Period, unless the Committee shall
otherwise determine.
	 
	 	(e)	 	Form of Payment. The earned portion of a Long-Term Stock 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.

9

 

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 Stock 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 Stock 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 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 Stock Award shall have no rights as a stockholder with respect to any
Shares covered by the Option, Right or Long-Term Stock 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) and 9(a) 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
either for or without consideration. During the life of the Participant, an
Option, Right or Long-Term Stock Award shall be exercisable only by him or her,
or by a transferee as permitted by Section 6(f) or 9(a) 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,

10

 

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.
	 
	 	(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 (i) no such action shall impair the rights of
any affected Participant or holder or beneficiary under any award
theretofore granted under the Plan and (ii) the Committee may not
materially amend a Long-Term Stock Award without the approval of
stockholders.

11exv10w14

 

Exhibit 10.14

Description of the Fiscal Year 2005 Executive Bonus Plan

Eligibility. Participants in the Fiscal Year 2005 Executive Bonus Plan (the
“Bonus Plan”) are chosen solely at the discretion of Oracle Corporation’s
Committee on Compensation and Management Development (the “Compensation
Committee”) of the Board of Directors. Our Chairman, Chief Executive Officer,
our Presidents, all of our Executive Vice Presidents and certain of our Senior
Vice Presidents are eligible to be considered for participation in the Bonus
Plan. As of August 27, 2004, there were twelve persons chosen to participate
for fiscal year 2005. No person is automatically entitled to participate in the
Bonus Plan in any Bonus Plan year. Oracle may also pay discretionary bonuses,
or other types of compensation, outside the Bonus Plan.

History. The Compensation Committee approved the adoption of the Bonus Plan,
which is part of the overall compensation program for our executives, at
meetings held on August 13 and 27, 2004.

Purpose. The purpose of the Bonus Plan is to motivate the participants to
achieve our financial performance objectives and to reward them when those
objectives are met with bonuses that will be deductible to the maximum extent
possible as “performance-based compensation” within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

Administration. The Bonus Plan will be administered by the Compensation
Committee, consisting of no fewer than two members of the Board, each of whom
qualifies as an “outside director” within the meaning of Section 162(m) of the
Code.

Determination of Awards. Under the Bonus Plan, participants will be eligible
to receive awards based upon the attainment, in fiscal year 2005, and
certification of certain performance criteria established by the Compensation
Committee. For fiscal year 2005:

	 	(a)	 	Mr. Lawrence Ellison, our Chief Executive Officer; Mr. Jeff Henley,
our Chairman of the Board; Ms. Safra Catz, a President; and Mr. Harry
You, an Executive Vice President and Chief Financial Officer, will each
receive an award based on Oracle’s improvement in its operating profit
from fiscal year 2004 to fiscal year 2005;
	 
	 	(b)	 	Mr. Charles E. Phillips, Jr., a President, and each Executive Vice
President and one Senior Vice President directly responsible for sales
and consulting (collectively, the “Sales and Consulting Participants”)
will each receive an award based upon improvement in license and
outsourcing revenue growth in their respective areas of responsibility
from fiscal year 2004 to fiscal year 2005 and upon reaching and
exceeding targets with respect to licensing and consulting margins in
their respective areas of responsibility for fiscal year 2005; and
	 
	 	(c)	 	the Executive Vice Presidents (other than each Executive Vice
President directly responsible for sales or consulting) will each
receive an award based on improvement in either revenue growth or
operating profit, as the case may be, in their respective areas of
responsibility from fiscal year 2004 to fiscal year 2005.

The Compensation Committee adopted the performance criteria on August 13 and
27, 2004, within 90 days after the start of fiscal year 2005. Each Sales and
Consulting Participant’s total bonus under the Bonus Plan is calculated by
summing the applicable bonus for each target. For all participants, the
applicable bonus for their target or targets is related to the amount by
which each target is exceeded or missed. If the target bonus calculation
results in a negative number, the bonus for such target is zero. The details
of each of the formulas with respect to the criteria have not been included
in this description in order to maintain the confidentiality of our revenue
and margin expectations, which we believe are confidential commercial or
business information, the disclosure of which would adversely affect Oracle.
In the event of the termination or resignation of a participant during fiscal
year 2005, we intend to have the person who assumes the responsibilities of
that participant assume the same bonus structure as that participant, but
adjusted, as determined by the Compensation Committee, to take into account
that such person did not serve in that capacity for the entire fiscal year.

Payment of Awards. All awards will be paid in cash as soon as is practicable
following determination of the award, unless the Compensation Committee has,
prior to the grant of an award, received and approved, in its sole discretion,
a request by a participant to defer receipt of an award in accordance with the
Bonus Plan.

Maximum Award. The amounts that will be paid pursuant to the Bonus Plan are
not currently determinable. The maximum bonus payment that any participant may
receive under the Bonus Plan would be $7,500,000, less any other cash
compensation (including base salary) she or he receives with respect to fiscal
year 2005 (i.e., total cash compensation cannot exceed $7,500,000).

1

 

Amendment and Termination. The Compensation Committee may terminate the Bonus
Plan, in whole or in part, suspend the Bonus Plan, in whole or in part from
time to time, and amend the Bonus Plan, from time to time, including the
adoption of amendments deemed necessary or desirable to correct any defect or
supply omitted data or reconcile any inconsistency in the Bonus Plan or in any
award granted thereunder, so long as stockholder approval has been obtained, if
required in order for awards under the Bonus Plan to qualify as
“performance-based compensation” under Section 162(m) of the Code. The
Compensation Committee may amend or modify the Bonus Plan in any respect, or
terminate the Bonus Plan, without the consent of any affected participant.
However, in no event may such amendment or modification result in an increase
in the amount of compensation payable pursuant to any award.

Termination of Employment. Should a participant’s employment with us terminate
for any reason during fiscal year 2005, the participant will not be eligible to
receive an award under the Bonus Plan.

2

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