SC 14D9/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

————————————

SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 7)

PEOPLESOFT, INC.

(Name of Subject Company)

PEOPLESOFT, INC.

(Name of Person Filing Statement)

Common Stock, Par Value $0.01 Per Share

(Title of Class of Securities)

712713106

(CUSIP Number of Class of Securities)

————————————

Craig Conway
President and Chief Executive Officer
PeopleSoft, Inc.
4460 Hacienda Drive, Pleasanton, California 94588-8618
(925) 225-3000

(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person Filing Statement)

COPIES TO:

Douglas D. Smith, Esq.
Gibson, Dunn & Crutcher LLP
One Montgomery Street
San Francisco, California 94104
(415) 393-8200

     o    Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer

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Purpose of Amendment

     The purpose of this amendment is to amend and supplement Items 3 and 6 in the Solicitation/Recommendation Statement on Schedule 14D-9 previously filed by PeopleSoft, Inc. (the “Company”) on June 11, 2003 and subsequently amended, and to add additional Exhibits to Item 9 and revise the Exhibit Index accordingly.

Item 3. Past Contacts, Transactions, Negotiations and Agreements

     Item 3 is hereby amended and supplemented as follows:

Severance Arrangements

     In late 2002, the Compensation Committee adopted a severance policy for the Company’s executives (the “Policy”), effective in January of this year, which provided for acceleration of vesting of restricted stock awards upon certain terminations of employment following a change of control. After adoption of the Policy, a question was raised whether such acceleration was consistent with certain language in the Company’s Amended and Restated 2001 Stock Plan, under which restricted stock awards are granted.

     On August 20, 2003, the Compensation Committee approved an amendment to the Policy to ensure that the benefits originally granted to the executives in the Policy would be realized and to eliminate the potential claims that might arise as a result of any ambiguity as to the rights of executives under the Policy. Under the Policy, as amended, the Company would make a cash payment equal to the fair market value of the Company’s stock that is subject to the unvested portion of a restricted stock award upon termination of employment under the circumstances described in the Policy. In exchange for the payment, executives are required to relinquish all rights to accelerated vesting of restricted stock in the event of certain types of termination of employment following a change of control.

     The Compensation Committee believes that the adoption of the Policy, as well as the amendment, is important in assuring that the interests of the Company’s senior executives are aligned with shareholder interests as the Company’s executives evaluate and execute on the Company’s strategic alternatives.

     The Policy applies to each executive officer other than the chief executive officer. The chief executive officer's May 1999 employment agreement, which provides for acceleration of restricted stock, was similarly amended by the Compensation Committee to ensure that the benefits provided thereunder would be realized. The amendment provides for the same cash payment upon a change of control, as well as in the event of a voluntary termination of employment for good reason or an involuntary termination of employment without cause.

     As of August 18, 2003, Mr. Conway holds 500,000 shares, and the Company’s executive officers other than Mr. Conway hold an aggregate of 450,731 shares, of restricted stock that remain subject to restricted stock awards and a repurchase right by the Company.

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     A copy of the Policy is attached hereto as an exhibit and is incorporated by this reference.

Item 6. Interest in Securities of the Subject Company

     Item 6 is hereby amended and supplemented as follows:

     Except as described below and except as disclosed in the Schedule 14D-9 previously filed by the Company, as subsequently amended, no transactions with respect to the Common Stock have been effected by the Company or, to the Company’s best knowledge, by any of its executive officers, directors, affiliates or subsidiaries during the past 60 days.

			Nature of	Number Shares of
Name	Date of Transaction		Transaction	Common Stock		Purchase/Sale Price
David A. Duffield		08/20/03	Sale*		25,000	$	16.89

* Sale pursuant to Rule 10b5-1(c) trading plan.

Item 9. Materials to Be Filed as Exhibits

Exhibit No.	Document
*(a)(1)	Press release issued by PeopleSoft on June 12, 2003
*(a)(2)	Press release issued by PeopleSoft on June 6, 2003 (incorporated by reference to PeopleSoft’s Schedule 14D-9C filed with the SEC on June 7, 2003)
**(a)(3)	Letter, dated June 13, 2003, to PeopleSoft’s stockholders
***(a)(4)	Letter to customers issued June 16, 2003 (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)
***(a)(5)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 17, 2003 425 filing)
****(a)(6)	Press release issued by CRN (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(7)	Press release issued by CNET News.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(8)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s June 13, 2003 425 filing)
****(a)(9)	Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda
****(a)(10)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)
****(a)(11)	Press release issued by ComputerWeekly.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(12)	Press release issued by The Motley Fool (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(13)	Press release issued by the Higher Education User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(14)	Text of information posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)

3

Exhibit No.	Document
****(a)(15)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)
****(a)(16)	Press release issued by the Distributors & Manufacturers’ User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(17)	Press release issued by the Connecticut Attorney General’s Office
****(a)(18)	Press release issued by PeopleSoft on June 20, 2003
*****(a)(19)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(20)	Letter to PeopleSoft employees (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(21)	Press release issued by eWeek (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(22)	Press release issued by the Healthcare Industry User Group (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(23)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(24)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(25)	Text of International Customer Advisory Board’s e-mail posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(26)	Press release issued by Quest (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(27)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)
*****(a)(28)	Transcript of TriNet webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)
*****(a)(29)	Transcript of CNBC webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)
*****(a)(30)	Press release issued by the International Customer Advisory Board (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(31)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)
*****(a)(32)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)
*****(a)(33)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)
*****(a)(34)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)
*****(a)(35)	Advertisement placed by PeopleSoft on July 2, 2003 (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)
†(a)(36)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 7, 2003 425 filing)
†(a)(37)	Press release issued by InformationWeek (incorporated by reference to PeopleSoft’s July 8, 2003 425 filing)
†(a)(38)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 14, 2003 425 filing)
†(a)(39)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)
†(a)(40)	Press release issued by CRMDaily.com (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)
†(a)(41)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 18, 2003 425 filing)

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Exhibit No.	Document
†(a)(42)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 22, 2003 425 filing)
†(a)(43)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)
†(a)(44)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)
††(a)(45)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 28, 2003 425 filing)
††(a)(46)	Press release issued by International Customer Advisory Board and Quest (incorporated by reference to PeopleSoft’s July 29, 2003 425 filing)
††(a)(47)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s August 13, 2003 425 filing)
††(a)(48)	Redacted version of First Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda
*(e)(1)	Excerpts from PeopleSoft’s Definitive Proxy Statement dated April 28, 2003 relating to the 2003 Annual Meeting of Stockholders
*(e)(2)	Employment Agreement, dated May 10, 1999, by and between Craig Conway and PeopleSoft, Inc., (incorporated by reference to Exhibit 10.47 filed with PeopleSoft’s Annual Report on Form 10-K for the year ended December 31, 1999)
*(e)(3)	Employment Contract, dated as of January 1, 2000, with addendums thereto dated as of January 1, 2000, and January 1, 2001, by and between Guy Dubois and PeopleSoft France S.A. (incorporated by reference to Exhibit 10.45 filed with PeopleSoft’s Annual Report on Form 10-K for the year ended December 31, 2001)
(e)(4)	Executive Severance Policy – Executive Vice Presidents, effective as of January 1, 2003
(e)(5)	Executive Severance Policy – Senior Vice Presidents, effective as of January 1, 2003

*	Previously filed as an exhibit to PeopleSoft’s Schedule 14D-9 filed with the SEC June 12, 2003.
**	Previously filed as an exhibit to PeopleSoft’s Amendment No. 1 to Schedule 14D-9 filed with the SEC June 13, 2003.
***	Previously filed as an exhibit to PeopleSoft’s Amendment No. 2 to Schedule 14D-9 filed with the SEC June 17, 2003.
****	Previously filed as an exhibit to PeopleSoft’s Amendment No. 3 to Schedule 14D-9 filed with the SEC June 20, 2003.
*****	Previously filed as an exhibit to PeopleSoft’s Amendment No. 4 to Schedule 14D-9 filed with the SEC July 3, 2003.
†	Previously filed as an exhibit to PeopleSoft’s Amendment No. 5 to Schedule 14D-9 filed with the SEC July 25, 2003.
††	Previously filed as an exhibit to PeopleSoft’s Amendment No. 6 to Schedule 14D-9 filed with the SEC August 14, 2003.

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SIGNATURE

     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct.

	PEOPLESOFT, INC.
	By:	/s/ KEVIN T. PARKER Kevin T. Parker Executive Vice President Finance and Administration, Chief Financial Officer (Principal Financial and Accounting Officer)
Date: August 22, 2003

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EXHIBIT INDEX

Exhibit No.	Document
*(a)(1)	Press release issued by PeopleSoft on June 12, 2003
*(a)(2)	Press release issued by PeopleSoft on June 6, 2003 (incorporated by reference to PeopleSoft’s Schedule 14D-9C filed with the SEC on June 7, 2003)
**(a)(3)	Letter, dated June 13, 2003, to PeopleSoft’s stockholders
***(a)(4)	Letter to customers issued June 16, 2003 (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)
***(a)(5)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 17, 2003 425 filing)
****(a)(6)	Press release issued by CRN (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(7)	Press release issued by CNET News.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(8)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s June 13, 2003 425 filing)
****(a)(9)	Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda
****(a)(10)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)
****(a)(11)	Press release issued by ComputerWeekly.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(12)	Press release issued by The Motley Fool (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(13)	Press release issued by the Higher Education User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(14)	Text of information posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)
****(a)(15)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)
****(a)(16)	Press release issued by the Distributors & Manufacturers’ User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)
****(a)(17)	Press release issued by the Connecticut Attorney General’s Office
****(a)(18)	Press release issued by PeopleSoft on June 20, 2003
*****(a)(19)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(20)	Letter to PeopleSoft employees (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(21)	Press release issued by eWeek (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(22)	Press release issued by the Healthcare Industry User Group (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(23)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(24)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(25)	Text of International Customer Advisory Board’s e-mail posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(26)	Press release issued by Quest (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)
*****(a)(27)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 25, 2003

7

Exhibit No.	Document
	425 filing)
*****(a)(28)	Transcript of TriNet webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)
*****(a)(29)	Transcript of CNBC webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)
*****(a)(30)	Press release issued by the International Customer Advisory Board (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)
*****(a)(31)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)
*****(a)(32)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)
*****(a)(33)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)
*****(a)(34)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)
*****(a)(35)	Advertisement placed by PeopleSoft on July 2, 2003 (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)
†(a)(36)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 7, 2003 425 filing)
†(a)(37)	Press release issued by InformationWeek (incorporated by reference to PeopleSoft’s July 8, 2003 425 filing)
†(a)(38)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 14, 2003 425 filing)
†(a)(39)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)
†(a)(40)	Press release issued by CRMDaily.com (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)
†(a)(41)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 18, 2003 425 filing)
†(a)(42)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 22, 2003 425 filing)
†(a)(43)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)
†(a)(44)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)
††(a)(45)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 28, 2003 425 filing)
††(a)(46)	Press release issued by International Customer Advisory Board and Quest (incorporated by reference to PeopleSoft’s July 29, 2003 425 filing)
††(a)(47)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s August 13, 2003 425 filing)
††(a)(48)	Redacted version of First Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda
*(e)(1)	Excerpts from PeopleSoft’s Definitive Proxy Statement dated April 28, 2003 relating to the 2003 Annual Meeting of Stockholders
*(e)(2)	Employment Agreement, dated May 10, 1999, by and between Craig Conway and PeopleSoft, Inc., (incorporated by reference to Exhibit 10.47 filed with PeopleSoft’s Annual Report on Form 10-K for the year ended December 31, 1999)
*(e)(3)	Employment Contract, dated as of January 1, 2000, with addendums thereto dated as of January 1, 2000, and January 1, 2001, by and between Guy Dubois and PeopleSoft France S.A. (incorporated by reference to Exhibit 10.45 filed with PeopleSoft’s Annual Report on Form 10-K for the year ended December 31, 2001)

8

Exhibit No.	Document
(e)(4)	Executive Severance Policy – Executive Vice Presidents, effective as of January 1, 2003
(e)(5)	Executive Severance Policy – Senior Vice Presidents, effective as of January 1, 2003

*	Previously filed as an exhibit to PeopleSoft’s Schedule 14D-9 filed with the SEC June 12, 2003.
**	Previously filed as an exhibit to PeopleSoft’s Amendment No. 1 to Schedule 14D-9 filed with the SEC June 13, 2003.
***	Previously filed as an exhibit to PeopleSoft’s Amendment No. 2 to Schedule 14D-9 filed with the SEC June 17, 2003.
****	Previously filed as an exhibit to PeopleSoft’s Amendment No. 3 to Schedule 14D-9 filed with the SEC June 20, 2003.
*****	Previously filed as an exhibit to PeopleSoft’s Amendment No. 4 to Schedule 14D-9 filed with the SEC July 3, 2003.
†	Previously filed as an exhibit to PeopleSoft’s Amendment No. 5 to Schedule 14D-9 filed with the SEC July 25, 2003.
††	Previously filed as an exhibit to PeopleSoft’s Amendment No. 6 to Schedule 14D-9 filed with the SEC August 14, 2003.

9 EX-99.(E)(4) 3 f92476a7exv99wxeyx4y.txt EXHIBIT (E)(4) Exhibit (e)(4) EXECUTIVE SEVERANCE POLICY - EXECUTIVE VICE PRESIDENTS Effective January 1, 2003 If an Executive's employment with the Company is involuntarily terminated by the Company other than for Cause, then, subject to the Executive's executing and not revoking a general release of claims in favor of the Company, the Executive will receive the following: - - 12 months' base salary at the rate in effect on the date of termination; - - 12 months of Executive's target bonus pursuant to the Company's Employee Incentive Compensation Plan at the rate in effect on the date of termination, assuming 100% achievement of Executive's and Company's objectives, and excluding any other bonuses, such as the annual bonus subject to the discretion of the Board of Directors; - - Credit for 12 months of employment toward vesting of stock options, stock appreciation rights, restricted stock awards and stock purchase rights ("Options") granted prior to the date Executive's employment is terminated, unless the plan under which the Options were granted prohibits such credit or acceleration or provides for alternative vesting; - - Reimbursement of COBRA premiums, if Executive is eligible for COBRA, for up to 12 months from the date of termination. Any amounts owed hereunder will be reduced by any other salary, severance, bonus or benefits to which Executive is entitled under any applicable laws or regulations, including, but not limited to, WARN. If (i) there is a Change of Control, and (ii) within one (1) year of a Change of Control, an Executive's employment is either involuntarily terminated other than for "Cause" or terminates by the Executive on the basis of Constructive Discharge, and (iii) the Executive executes and does not revoke a general release of claims in favor of the Company or surviving entity, the Executive will receive the items listed above and the following: - - All unvested Options, except for restricted stock awards granted to Executive prior to the date Executive's employment is terminated will vest, unless the plan under which the Options were granted prohibits such vesting or provides for alternative vesting inconsistent with the terms of this Policy. - - Based on Executive's relinquishment and waiver of any claim to acceleration of vesting of such awards, Company will pay Executive an amount equal to the value of the restricted stock that was granted to Executive prior to the date Executive's employment is terminated, and that remains unvested as of the date of termination. The cash payment will be equal to the fair market value of the Company's stock that is subject to the unvested portion of a restricted stock award calculated as of the date employment terminates (reduced by the purchase price, if any, that had not been paid for such restricted stock). Payment will occur no later than three (3) days following the date Executive's employment is terminated. As a condition of receiving such payment, and effective on its receipt, Executive will have no further rights in such restricted stock awards or in any other payments in relation to such restricted stock awards. This Policy cannot be amended, altered, suspended or terminated as to (i) the acceleration of vesting of Options granted to Executive prior to the date of such amendment, alteration, suspension, or termination, or (ii) the right of an Executive to receive a cash payment in lieu of acceleration of vesting of restricted stock granted to Executive prior to the date of such amendment, alteration, suspension, or termination, unless mutually and expressly agreed otherwise between Executive and the Company, which agreement must be in writing and signed by Executive and the Company. All payments and benefits under this Policy will be subject to all applicable tax withholding. The Company agrees to pay all costs and reasonable expenses, including reasonable attorneys' fees, incurred by an Executive with respect to an action (i) brought by or on behalf of an Executive to obtain any payment owed to an Executive in lieu of, and in consideration for, the Executive's waiving and relinquishing any rights to acceleration of vesting of restricted stock awards, or (ii) instituted by or in the name of the Company to interpret any of the terms of the Policy or the equity incentive plan under which restricted stock awards were granted as they relate to the Company's obligation to make a payment to Executives in lieu of, and in consideration for, waiving and relinquishing any rights to the acceleration of vesting of restricted stock awards. Notwithstanding the foregoing, the Company will not have an obligation to pay costs, expenses or attorneys' fees incurred by an Executive if (i) in an action initiated by or on behalf of an Executive, the court determines that each of the material assertions made by the Executive as a basis for such action were not made in good faith or were frivolous, (ii) in an action brought by or in the name of the Company, the court determines that each of the Executive's material defenses to such action were not made in good faith or were frivolous, or (iii) the court determines that the Executive is not otherwise entitled to be paid such costs, fees and expenses. It is the Company's intention that if the Company contests an Executive's right to payment in lieu of, and in consideration for the Executive's waiving and relinquishing any rights to, acceleration of vesting of the Executive's restricted stock awards, the question of the Executive's right to such payment shall be for the court to decide, and no action of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, or independent legal counsel) shall create a presumption that the Executive is not entitled to such payment. If the payment in lieu of, and in consideration for the Executive's waiving and relinquishing any rights to, acceleration of vesting of the Executive's restricted stock awards, described above is not made within three (3) days of the date of termination of an Executive's employment, interest will accrue on the overdue payment at the highest rate permitted by law. The foregoing severance terms do not change the at-will nature of any Executive's employment with PeopleSoft. Any disputes, controversies, or claims arising out of or relating to this Policy must be resolved under PeopleSoft's Internal Dispute Solution (IDS) process. DEFINITIONS "Cause" means (i) a material act of dishonesty by Executive in connection with the Executive's employment with the Company; (ii) the Executive's conviction of, or plea of nolo contendere to, a felony; (iii) the Executive's gross misconduct in connection with the performance of his or her duties; (iv) Executive's death or permanent disability preventing him or her from performing the usual and necessary functions of his or her office; (v) the Executive's material breach of his or her obligations as an officer of the Company; or (vi) the Executive's failure to materially comply with the Company's policies. With respect to clauses (iii), (v) and (vi), such actions shall not constitute Cause if they are cured by the Executive within thirty (30) days following delivery to the Executive of a written explanation specifying the basis for the Company's belief that it has Cause, provided that the Company deems such action capable of being cured. "Constructive Discharge" means (i) the occurrence of one or more of the following ("Constructive Discharge Events"): (a) a material reduction in the Executive's Base Salary or target bonus potential under the Employee Incentive Compensation Plan other than for Cause, (b) a material reduction in Executive's authority or duties (other than a material reduction in authority or duties occurring solely by virtue of a Change of Control, as for example, when an Executive retains the position in the Company but the Company is a wholly-owned, privately-held subsidiary or division of a larger company, or a reduction other than for Cause); or (c) relocation of Executive's position outside of the metropolitan area where Executive is currently employed, and (ii) a Constructive Discharge Event continues for more than thirty (30) days after delivery of written notice by the Executive to the Company specifying the circumstances of the alleged Constructive Discharge, which notice must be delivered to the Company within five (5) business days of the Constructive Discharge Event, and (iii) Executive resigns from all positions with the Company or its successor within ten (10) days of the expiration of Company's 30 day cure period, where such Constructive Discharge Event is still ongoing. "Change of Control" means: (a) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing forty-five percent (45%) or more of the total voting power represented by the Company's then outstanding voting securities; or (b) A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incumbent Directors" shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for elections, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or (c) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which 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) at least fifty-five percent (55%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (d) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets. EX-99.(E)(5) 4 f92476a7exv99wxeyx5y.txt EXHIBIT (E)(5) Exhibit (e)(5) EXECUTIVE SEVERANCE POLICY - SENIOR VICE PRESIDENTS Effective January 1, 2003 If an Executive's employment with the Company is involuntarily terminated by the Company other than for Cause, then, subject to the Executive's executing and not revoking a general release of claims in favor of the Company, the Executive will receive the following: - - 6 months' base salary at the rate in effect on the date of termination; - - 6 months of Executive's target bonus pursuant to the Company's Employee Incentive Compensation Plan at the rate in effect on the date of termination, assuming 100% achievement of Executive's and Company's objectives, and excluding any other bonuses, such as the annual bonus subject to the discretion of the Board of Directors; - - Credit for 6 months of employment toward vesting of stock options, stock appreciation rights, restricted stock awards and stock purchase rights ("Options") granted prior to the date Executive's employment is terminated, unless the plan under which the Options were granted prohibits such credit or acceleration or provides for alternative vesting; - - Reimbursement of COBRA premiums, if Executive is eligible for COBRA, for up to 6 months from the date of termination. Any amounts owed hereunder will be reduced by any other salary, severance, bonus or benefits to which Executive is entitled under any applicable laws or regulations, including, but not limited to, WARN. If (i) there is a Change of Control, and (ii) within one (1) year of a Change of Control, an Executive's employment is either involuntarily terminated other than for "Cause" or terminates by the Executive on the basis of Constructive Discharge, and (iii) the Executive executes and does not revoke a general release of claims in favor of the Company or surviving entity, the Executive will receive the items listed above and the following: - - All unvested Options, except for restricted stock awards granted to Executive prior to the date Executive's employment is terminated will vest, unless the plan under which the Options were granted prohibits such vesting or provides for alternative vesting inconsistent with the terms of this Policy. - - Based on Executive's relinquishment and waiver of any claim to acceleration of vesting of such awards, Company will pay Executive an amount equal to the value of the restricted stock that was granted to Executive prior to the date Executive's employment is terminated, and that remains unvested as of the date of termination. The cash payment will be equal to the fair market value of the Company's stock that is subject to the unvested portion of a restricted stock award calculated as of the date employment terminates (reduced by the purchase price, if any, that had not been paid for such restricted stock). Payment will occur no later than three (3) days following the date Executive's employment is terminated. As a condition of receiving such payment, and effective on its receipt, Executive will have no further rights in such restricted stock awards or in any other payments in relation to such restricted stock awards. This Policy cannot be amended, altered, suspended or terminated as to (i) the acceleration of vesting of Options granted to Executive prior to the date of such amendment, alteration, suspension, or termination, or (ii) the right of an Executive to receive a cash payment in lieu of acceleration of vesting of restricted stock granted to Executive prior to the date of such amendment, alteration, suspension, or termination, unless mutually and expressly agreed otherwise between Executive and the Company, which agreement must be in writing and signed by Executive and the Company. All payments and benefits under this Policy will be subject to all applicable tax withholding. The Company agrees to pay all costs and reasonable expenses, including reasonable attorneys' fees, incurred by an Executive with respect to an action (i) brought by or on behalf of an Executive to obtain any payment owed to an Executive in lieu of, and in consideration for, the Executive's waiving and relinquishing any rights to acceleration of vesting of restricted stock awards, or (ii) instituted by or in the name of the Company to interpret any of the terms of the Policy or the equity incentive plan under which restricted stock awards were granted as they relate to the Company's obligation to make a payment to Executives in lieu of, and in consideration for, waiving and relinquishing any rights to the acceleration of vesting of restricted stock awards. Notwithstanding the foregoing, the Company will not have an obligation to pay costs, expenses or attorneys' fees incurred by an Executive if (i) in an action initiated by or on behalf of an Executive, the court determines that each of the material assertions made by the Executive as a basis for such action were not made in good faith or were frivolous, (ii) in an action brought by or in the name of the Company, the court determines that each of the Executive's material defenses to such action were not made in good faith or were frivolous, or (iii) the court determines that the Executive is not otherwise entitled to be paid such costs, fees and expenses. It is the Company's intention that if the Company contests an Executive's right to payment in lieu of, and in consideration for the Executive's waiving and relinquishing any rights to, acceleration of vesting of the Executive's restricted stock awards, the question of the Executive's right to such payment shall be for the court to decide, and no action of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, or independent legal counsel) shall create a presumption that the Executive is not entitled to such payment. If the payment in lieu of, and in consideration for the Executive's waiving and relinquishing any rights to, acceleration of vesting of the Executive's restricted stock awards, described above is not made within three (3) days of the date of termination of an Executive's employment, interest will accrue on the overdue payment at the highest rate permitted by law. The foregoing severance terms do not change the at-will nature of any Executive's employment with PeopleSoft. Any disputes, controversies, or claims arising out of or relating to this Policy must be resolved under PeopleSoft's Internal Dispute Solution (IDS) process. DEFINITIONS "Cause" means (i) a material act of dishonesty by Executive in connection with the Executive's employment with the Company; (ii) the Executive's conviction of, or plea of nolo contendere to, a felony; (iii) the Executive's gross misconduct in connection with the performance of his or her duties; (iv) Executive's death or permanent disability preventing him or her from performing the usual and necessary functions of his or her office; (v) the Executive's material breach of his or her obligations as an officer of the Company; or (vi) the Executive's failure to materially comply with the Company's policies. With respect to clauses (iii), (v) and (vi), such actions shall not constitute Cause if they are cured by the Executive within thirty (30) days following delivery to the Executive of a written explanation specifying the basis for the Company's belief that it has Cause, provided that the Company deems such action capable of being cured. "Constructive Discharge" means (i) the occurrence of one or more of the following ("Constructive Discharge Events"): (a) a material reduction in the Executive's Base Salary or target bonus potential under the Employee Incentive Compensation Plan other than for Cause, (b) a material reduction in Executive's authority or duties (other than a material reduction in authority or duties occurring solely by virtue of a Change of Control, as for example, when an Executive retains the position in the Company but the Company is a wholly-owned, privately-held subsidiary or division of a larger company, or a reduction other than for Cause); or (c) relocation of Executive's position outside of the metropolitan area where Executive is currently employed, and (ii) a Constructive Discharge Event continues for more than thirty (30) days after delivery of written notice by the Executive to the Company specifying the circumstances of the alleged Constructive Discharge, which notice must be delivered to the Company within five (5) business days of the Constructive Discharge Event, and (iii) Executive resigns from all positions with the Company or its successor within ten (10) days of the expiration of Company's 30 day cure period, where such Constructive Discharge Event is still ongoing. "Change of Control" means: (a) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing forty-five percent (45%) or more of the total voting power represented by the Company's then outstanding voting securities; or (b) A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incumbent Directors" shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for elections, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or (c) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which 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) at least fifty-five percent (55%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (d) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets. -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.(E)(4)

                                                                  Exhibit (e)(4)

             EXECUTIVE SEVERANCE POLICY - EXECUTIVE VICE PRESIDENTS
                            Effective January 1, 2003

If an Executive's employment with the Company is involuntarily terminated by the
Company other than for Cause, then, subject to the Executive's executing and not
revoking a general release of claims in favor of the Company, the Executive will
receive the following:

- -     12 months' base salary at the rate in effect on the date of termination;

- -     12 months of Executive's target bonus pursuant to the Company's Employee
      Incentive Compensation Plan at the rate in effect on the date of
      termination, assuming 100% achievement of Executive's and Company's
      objectives, and excluding any other bonuses, such as the annual bonus
      subject to the discretion of the Board of Directors;

- -     Credit for 12 months of employment toward vesting of stock options, stock
      appreciation rights, restricted stock awards and stock purchase rights
      ("Options") granted prior to the date Executive's employment is
      terminated, unless the plan under which the Options were granted prohibits
      such credit or acceleration or provides for alternative vesting;

- -     Reimbursement of COBRA premiums, if Executive is eligible for COBRA, for
      up to 12 months from the date of termination.

Any amounts owed hereunder will be reduced by any other salary, severance, bonus
or benefits to which Executive is entitled under any applicable laws or
regulations, including, but not limited to, WARN.

If (i) there is a Change of Control, and (ii) within one (1) year of a Change of
Control, an Executive's employment is either involuntarily terminated other than
for "Cause" or terminates by the Executive on the basis of Constructive
Discharge, and (iii) the Executive executes and does not revoke a general
release of claims in favor of the Company or surviving entity, the Executive
will receive the items listed above and the following:

- -     All unvested Options, except for restricted stock awards granted to
      Executive prior to the date Executive's employment is terminated will
      vest, unless the plan under which the Options were granted prohibits such
      vesting or provides for alternative vesting inconsistent with the terms of
      this Policy.

- -     Based on Executive's relinquishment and waiver of any claim to
      acceleration of vesting of such awards, Company will pay Executive an
      amount equal to the value of

      the restricted stock that was granted to Executive prior to the date
      Executive's employment is terminated, and that remains unvested as of the
      date of termination. The cash payment will be equal to the fair market
      value of the Company's stock that is subject to the unvested portion of a
      restricted stock award calculated as of the date employment terminates
      (reduced by the purchase price, if any, that had not been paid for such
      restricted stock). Payment will occur no later than three (3) days
      following the date Executive's employment is terminated. As a condition of
      receiving such payment, and effective on its receipt, Executive will have
      no further rights in such restricted stock awards or in any other payments
      in relation to such restricted stock awards.

This Policy cannot be amended, altered, suspended or terminated as to (i) the
acceleration of vesting of Options granted to Executive prior to the date of
such amendment, alteration, suspension, or termination, or (ii) the right of an
Executive to receive a cash payment in lieu of acceleration of vesting of
restricted stock granted to Executive prior to the date of such amendment,
alteration, suspension, or termination, unless mutually and expressly agreed
otherwise between Executive and the Company, which agreement must be in writing
and signed by Executive and the Company.

All payments and benefits under this Policy will be subject to all applicable
tax withholding.

The Company agrees to pay all costs and reasonable expenses, including
reasonable attorneys' fees, incurred by an Executive with respect to an action
(i) brought by or on behalf of an Executive to obtain any payment owed to an
Executive in lieu of, and in consideration for, the Executive's waiving and
relinquishing any rights to acceleration of vesting of restricted stock awards,
or (ii) instituted by or in the name of the Company to interpret any of the
terms of the Policy or the equity incentive plan under which restricted stock
awards were granted as they relate to the Company's obligation to make a payment
to Executives in lieu of, and in consideration for, waiving and relinquishing
any rights to the acceleration of vesting of restricted stock awards.

Notwithstanding the foregoing, the Company will not have an obligation to pay
costs, expenses or attorneys' fees incurred by an Executive if (i) in an action
initiated by or on behalf of an Executive, the court determines that each of the
material assertions made by the Executive as a basis for such action were not
made in good faith or were frivolous, (ii) in an action brought by or in the
name of the Company, the court determines that each of the Executive's material
defenses to such action were not made in good faith or were frivolous, or (iii)
the court determines that the Executive is not otherwise entitled to be paid
such costs, fees and expenses.

It is the Company's intention that if the Company contests an Executive's right
to payment in lieu of, and in consideration for the Executive's waiving and
relinquishing any rights to, acceleration of vesting of the Executive's
restricted stock awards, the question of the Executive's right to such payment
shall be for the court to decide, and no action of the Company (including its
Board of Directors, any committee or subgroup

of the Board of Directors, or independent legal counsel) shall create a
presumption that the Executive is not entitled to such payment.

If the payment in lieu of, and in consideration for the Executive's waiving and
relinquishing any rights to, acceleration of vesting of the Executive's
restricted stock awards, described above is not made within three (3) days of
the date of termination of an Executive's employment, interest will accrue on
the overdue payment at the highest rate permitted by law.

The foregoing severance terms do not change the at-will nature of any
Executive's employment with PeopleSoft. Any disputes, controversies, or claims
arising out of or relating to this Policy must be resolved under PeopleSoft's
Internal Dispute Solution (IDS) process.

DEFINITIONS

"Cause" means (i) a material act of dishonesty by Executive in connection with
the Executive's employment with the Company; (ii) the Executive's conviction of,
or plea of nolo contendere to, a felony; (iii) the Executive's gross misconduct
in connection with the performance of his or her duties; (iv) Executive's death
or permanent disability preventing him or her from performing the usual and
necessary functions of his or her office; (v) the Executive's material breach of
his or her obligations as an officer of the Company; or (vi) the Executive's
failure to materially comply with the Company's policies. With respect to
clauses (iii), (v) and (vi), such actions shall not constitute Cause if they are
cured by the Executive within thirty (30) days following delivery to the
Executive of a written explanation specifying the basis for the Company's belief
that it has Cause, provided that the Company deems such action capable of being
cured.

"Constructive Discharge" means (i) the occurrence of one or more of the
following ("Constructive Discharge Events"): (a) a material reduction in the
Executive's Base Salary or target bonus potential under the Employee Incentive
Compensation Plan other than for Cause, (b) a material reduction in Executive's
authority or duties (other than a material reduction in authority or duties
occurring solely by virtue of a Change of Control, as for example, when an
Executive retains the position in the Company but the Company is a wholly-owned,
privately-held subsidiary or division of a larger company, or a reduction other
than for Cause); or (c) relocation of Executive's position outside of the
metropolitan area where Executive is currently employed, and (ii) a Constructive
Discharge Event continues for more than thirty (30) days after delivery of
written notice by the Executive to the Company specifying the circumstances of
the alleged Constructive Discharge, which notice must be delivered to the
Company within five (5) business days of the Constructive Discharge Event, and
(iii) Executive resigns from all positions with the Company or its successor
within ten (10) days of the expiration of Company's 30 day cure period, where
such Constructive Discharge Event is still ongoing.

"Change of Control" means:

      (a)   Any "person" (as such term is used in Sections 13(d) and 14(d) of
            the Securities Exchange Act of 1934, as amended) becomes the
            "beneficial owner" (as defined in Rule 13d-3 under said Act),
            directly or indirectly, of securities of the Company representing
            forty-five percent (45%) or more of the total voting power
            represented by the Company's then outstanding voting securities; or

      (b)   A change in the composition of the Board occurring within a two-year
            period, as a result of which fewer than a majority of the directors
            are Incumbent Directors. "Incumbent Directors" shall mean directors
            who either (A) are directors of the Company as of the date hereof,
            or (B) are elected, or nominated for elections, to the Board with
            the affirmative votes of at least a majority of the Incumbent
            Directors at the time of such election or nomination (but shall not
            include an individual whose election or nomination is in connection
            with an actual or threatened proxy contest relating to the election
            of directors to the Company); or

      (c)   The consummation of a merger or consolidation of the Company with
            any other corporation, other than a merger or consolidation which
            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) at least fifty-five percent (55%) of the
            total voting power represented by the voting securities of the
            Company or such surviving entity outstanding immediately after such
            merger or consolidation; or

      (d)   The consummation of the sale or disposition by the Company of all or
            substantially all of the Company's assets.

EX-99.(E)(5)

                                                                  Exhibit (e)(5)

              EXECUTIVE SEVERANCE POLICY - SENIOR VICE PRESIDENTS

                            Effective January 1, 2003

If an Executive's employment with the Company is involuntarily terminated by the
Company other than for Cause, then, subject to the Executive's executing and not
revoking a general release of claims in favor of the Company, the Executive will
receive the following:

- -     6 months' base salary at the rate in effect on the date of termination;

- -     6 months of Executive's target bonus pursuant to the Company's Employee
      Incentive Compensation Plan at the rate in effect on the date of
      termination, assuming 100% achievement of Executive's and Company's
      objectives, and excluding any other bonuses, such as the annual bonus
      subject to the discretion of the Board of Directors;

- -     Credit for 6 months of employment toward vesting of stock options, stock
      appreciation rights, restricted stock awards and stock purchase rights
      ("Options") granted prior to the date Executive's employment is
      terminated, unless the plan under which the Options were granted prohibits
      such credit or acceleration or provides for alternative vesting;

- -     Reimbursement of COBRA premiums, if Executive is eligible for COBRA, for
      up to 6 months from the date of termination.

Any amounts owed hereunder will be reduced by any other salary, severance, bonus
or benefits to which Executive is entitled under any applicable laws or
regulations, including, but not limited to, WARN.

If (i) there is a Change of Control, and (ii) within one (1) year of a Change of
Control, an Executive's employment is either involuntarily terminated other than
for "Cause" or terminates by the Executive on the basis of Constructive
Discharge, and (iii) the Executive executes and does not revoke a general
release of claims in favor of the Company or surviving entity, the Executive
will receive the items listed above and the following:

- -     All unvested Options, except for restricted stock awards granted to
      Executive prior to the date Executive's employment is terminated will
      vest, unless the plan under which the Options were granted prohibits such
      vesting or provides for alternative vesting inconsistent with the terms of
      this Policy.

- -     Based on Executive's relinquishment and waiver of any claim to
      acceleration of vesting of such awards, Company will pay Executive an
      amount equal to the value of

      the restricted stock that was granted to Executive prior to the date
      Executive's employment is terminated, and that remains unvested as of the
      date of termination. The cash payment will be equal to the fair market
      value of the Company's stock that is subject to the unvested portion of a
      restricted stock award calculated as of the date employment terminates
      (reduced by the purchase price, if any, that had not been paid for such
      restricted stock). Payment will occur no later than three (3) days
      following the date Executive's employment is terminated. As a condition of
      receiving such payment, and effective on its receipt, Executive will have
      no further rights in such restricted stock awards or in any other payments
      in relation to such restricted stock awards.

This Policy cannot be amended, altered, suspended or terminated as to (i) the
acceleration of vesting of Options granted to Executive prior to the date of
such amendment, alteration, suspension, or termination, or (ii) the right of an
Executive to receive a cash payment in lieu of acceleration of vesting of
restricted stock granted to Executive prior to the date of such amendment,
alteration, suspension, or termination, unless mutually and expressly agreed
otherwise between Executive and the Company, which agreement must be in writing
and signed by Executive and the Company.

All payments and benefits under this Policy will be subject to all applicable
tax withholding.

The Company agrees to pay all costs and reasonable expenses, including
reasonable attorneys' fees, incurred by an Executive with respect to an action
(i) brought by or on behalf of an Executive to obtain any payment owed to an
Executive in lieu of, and in consideration for, the Executive's waiving and
relinquishing any rights to acceleration of vesting of restricted stock awards,
or (ii) instituted by or in the name of the Company to interpret any of the
terms of the Policy or the equity incentive plan under which restricted stock
awards were granted as they relate to the Company's obligation to make a payment
to Executives in lieu of, and in consideration for, waiving and relinquishing
any rights to the acceleration of vesting of restricted stock awards.

Notwithstanding the foregoing, the Company will not have an obligation to pay
costs, expenses or attorneys' fees incurred by an Executive if (i) in an action
initiated by or on behalf of an Executive, the court determines that each of the
material assertions made by the Executive as a basis for such action were not
made in good faith or were frivolous, (ii) in an action brought by or in the
name of the Company, the court determines that each of the Executive's material
defenses to such action were not made in good faith or were frivolous, or (iii)
the court determines that the Executive is not otherwise entitled to be paid
such costs, fees and expenses.

It is the Company's intention that if the Company contests an Executive's right
to payment in lieu of, and in consideration for the Executive's waiving and
relinquishing any rights to, acceleration of vesting of the Executive's
restricted stock awards, the question of the Executive's right to such payment
shall be for the court to decide, and no action of the Company (including its
Board of Directors, any committee or subgroup

of the Board of Directors, or independent legal counsel) shall create a
presumption that the Executive is not entitled to such payment.

If the payment in lieu of, and in consideration for the Executive's waiving and
relinquishing any rights to, acceleration of vesting of the Executive's
restricted stock awards, described above is not made within three (3) days of
the date of termination of an Executive's employment, interest will accrue on
the overdue payment at the highest rate permitted by law.

The foregoing severance terms do not change the at-will nature of any
Executive's employment with PeopleSoft. Any disputes, controversies, or claims
arising out of or relating to this Policy must be resolved under PeopleSoft's
Internal Dispute Solution (IDS) process.

DEFINITIONS

"Cause" means (i) a material act of dishonesty by Executive in connection with
the Executive's employment with the Company; (ii) the Executive's conviction of,
or plea of nolo contendere to, a felony; (iii) the Executive's gross misconduct
in connection with the performance of his or her duties; (iv) Executive's death
or permanent disability preventing him or her from performing the usual and
necessary functions of his or her office; (v) the Executive's material breach of
his or her obligations as an officer of the Company; or (vi) the Executive's
failure to materially comply with the Company's policies. With respect to
clauses (iii), (v) and (vi), such actions shall not constitute Cause if they are
cured by the Executive within thirty (30) days following delivery to the
Executive of a written explanation specifying the basis for the Company's belief
that it has Cause, provided that the Company deems such action capable of being
cured.

"Constructive Discharge" means (i) the occurrence of one or more of the
following ("Constructive Discharge Events"): (a) a material reduction in the
Executive's Base Salary or target bonus potential under the Employee Incentive
Compensation Plan other than for Cause, (b) a material reduction in Executive's
authority or duties (other than a material reduction in authority or duties
occurring solely by virtue of a Change of Control, as for example, when an
Executive retains the position in the Company but the Company is a wholly-owned,
privately-held subsidiary or division of a larger company, or a reduction other
than for Cause); or (c) relocation of Executive's position outside of the
metropolitan area where Executive is currently employed, and (ii) a Constructive
Discharge Event continues for more than thirty (30) days after delivery of
written notice by the Executive to the Company specifying the circumstances of
the alleged Constructive Discharge, which notice must be delivered to the
Company within five (5) business days of the Constructive Discharge Event, and
(iii) Executive resigns from all positions with the Company or its successor
within ten (10) days of the expiration of Company's 30 day cure period, where
such Constructive Discharge Event is still ongoing.

"Change of Control" means:

      (a)   Any "person" (as such term is used in Sections 13(d) and 14(d) of
            the Securities Exchange Act of 1934, as amended) becomes the
            "beneficial owner" (as defined in Rule 13d-3 under said Act),
            directly or indirectly, of securities of the Company representing
            forty-five percent (45%) or more of the total voting power
            represented by the Company's then outstanding voting securities; or

      (b)   A change in the composition of the Board occurring within a two-year
            period, as a result of which fewer than a majority of the directors
            are Incumbent Directors. "Incumbent Directors" shall mean directors
            who either (A) are directors of the Company as of the date hereof,
            or (B) are elected, or nominated for elections, to the Board with
            the affirmative votes of at least a majority of the Incumbent
            Directors at the time of such election or nomination (but shall not
            include an individual whose election or nomination is in connection
            with an actual or threatened proxy contest relating to the election
            of directors to the Company); or

      (c)   The consummation of a merger or consolidation of the Company with
            any other corporation, other than a merger or consolidation which
            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) at least fifty-five percent (55%) of the
            total voting power represented by the voting securities of the
            Company or such surviving entity outstanding immediately after such
            merger or consolidation; or

      (d)   The consummation of the sale or disposition by the Company of all or
            substantially all of the Company's assets.