sc14d9za

Present Principal Occupation or Employment;

Material Positions Held During the Past Five Years

Safra Catz

Ms. Catz has served as a director since October 2001. She has been a President since January 2004. She served as an Executive Vice President from November 1999 to January 2004 and served as a Senior Vice President between April 1999 and October 1999. Prior to joining Parent, Ms. Catz was employed by Donaldson, Lufkin & Jenrette, a global investment bank, where she was a Managing Director from February 1997 to March 1999.

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OTSWJQssIam5cyBwYNeOu0z6dJBNMEk1ttQxqDjeqiAa/uvckhQXK9s1+pMoY4OR CWBFdpIHvi4kpcUIqwQUuw== 0000891618-04-001382.txt : 20041215 0000891618-04-001382.hdr.sgml : 20041215 20041215172643 ACCESSION NUMBER: 0000891618-04-001382 CONFORMED SUBMISSION TYPE: SC 14D9/A PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 20041215 DATE AS OF CHANGE: 20041215 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLESOFT INC CENTRAL INDEX KEY: 0000875570 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 680137069 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42583 FILM NUMBER: 041205760 BUSINESS ADDRESS: STREET 1: 4460 HACIENDA DRIVE CITY: PLEASANTON STATE: CA ZIP: 94588-8618 BUSINESS PHONE: 925-225-3000 MAIL ADDRESS: STREET 1: 4460 HACIENDA DRIVE CITY: PLEASANTON STATE: CA ZIP: 94588-8618 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLESOFT INC CENTRAL INDEX KEY: 0000875570 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 680137069 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9/A BUSINESS ADDRESS: STREET 1: 4460 HACIENDA DRIVE CITY: PLEASANTON STATE: CA ZIP: 94588-8618 BUSINESS PHONE: 925-225-3000 MAIL ADDRESS: STREET 1: 4460 HACIENDA DRIVE CITY: PLEASANTON STATE: CA ZIP: 94588-8618 SC 14D9/A 1 f03438a7sc14d9za.htm AMENDMENT NO. 51 TO SCHEDULE 14D-9 sc14d9za

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. 51)

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)

David A. Duffield, Chief Executive Officer

Kevin T. Parker, Co-President and Chief Financial Officer

W. Philip Wilmington, Co-President

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

Purpose of Amendment

The purpose of this amendment is to amend and supplement Items 2, 3, 4 and 7 in the Solicitation/ Recommendation Statement on Schedule 14D-9 previously filed by PeopleSoft, Inc. (“PeopleSoft” or the “Company”) on June 12, 2003 and subsequently amended, and to add additional exhibits to Item 9 and amend the exhibit index accordingly.


Item 2.	*Identity and Background of Filing Person.*

Item 2 is hereby amended and supplemented by the addition of the following new paragraphs:

      On December 13, 2004, the Company issued a press release announcing that the Company, Oracle Corporation (“Oracle”) and Pepper Acquisition Corp., a wholly owned subsidiary of Oracle (“Merger Sub”), entered into an agreement and plan of merger dated as of December 12, 2004 (the “Merger Agreement”). The press release also announced that, pursuant to the Merger Agreement, Oracle and Merger Sub would amend the terms and conditions of the offer to purchase all outstanding shares of PeopleSoft common stock (together with the associated preferred stock purchase rights) by (a) increasing the price to be paid per share of PeopleSoft common stock (and the associated preferred stock purchase rights) from $24.00, as provided in the Offer as amended and restated on November 3, 2004 (the “$24.00 Offer”), to $26.50 per share and (b) amending certain conditions (the offer to purchase, as so amended, the “$26.50 Offer”). On December 13, 2004, Oracle and Merger Sub filed an amendment to their Tender Offer Statement on Schedule TO reflecting the terms of the $26.50 Offer, and on December 15, 2004, filed an amended and restated offer to purchase reflecting the $26.50 Offer as exhibit (a)(1)(xxi) to Amendment No. 83 to their Tender Offer Statement on Schedule TO (the “$26.50 Offer to Purchase”).

      The $26.50 Offer is being made pursuant to the Merger Agreement. The Merger Agreement provides that, among other things, following consummation of the $26.50 Offer and subject to other conditions contained in the Merger Agreement, including the approval and adoption of the Merger Agreement by the Company stockholders if required by Delaware law, Merger Sub will be merged with and into the Company (the “Merger”) and each outstanding share of PeopleSoft common stock (and the associated preferred stock purchase rights) not tendered and purchased pursuant to the $26.50 Offer (other than shares held by the Company, Oracle, Merger Sub or stockholders who properly perfect appraisal rights under Delaware law) will be converted into the right to receive the cash price per share paid in the tender offer, net to the stockholder in cash, without interest. The terms of the Merger Agreement are described in greater detail in Item 3 below and in Section 12 entitled “Purpose of the Offer; Plans for the Company; Stockholder Approval; Appraisal Rights; The Merger Agreement” in the $26.50 Offer to Purchase, which is being mailed to Company stockholders together with this Schedule 14D-9.

      The initial expiration date for the $26.50 Offer is 12:00 midnight, New York City time, on Tuesday December 28, 2004, subject to extension in certain limited circumstances as required or permitted under the Merger Agreement. Also, Oracle may elect to conduct a subsequent offering period of between three and 20 business days after the expiration of the $26.50 Offer. During the subsequent offering period, if Oracle elects to provide one, shares of PeopleSoft common stock (and the associated preferred stock purchase rights) not tendered and purchased prior to the expiration of the $26.50 Offer may be tendered to Merger Sub for the same consideration paid in the $26.50 Offer.


Item 3.	*Past Contacts, Transactions, Negotiations and Agreements.*

Item 3 is hereby amended and supplemented with the following:

Except (a) as described or incorporated by reference in this Schedule 14D-9, as amended, (b) as described or incorporated by reference in the Information Statement pursuant to Rule 14f-1 of the Securities Exchange Act of 1934, as amended, attached as Annex A (and filed as exhibit (e)(34) to this Schedule 14D-9) and incorporated herein by this reference, or (c) as set forth in the excerpts from the

Company’s Definitive Proxy Statements dated April 28, 2003 and February 20, 2004 filed as exhibits (e)(1) and (e)(12) respectively to this Schedule 14D-9 and incorporated by reference herein, to the knowledge of the Company, as of the date of this Schedule 14D-9 there are no material agreements, arrangements or understandings, or any actual or potential conflicts of interest between the Company or its affiliates and (i) the Company or its executive officers, directors or affiliates or (ii) Oracle or Merger Sub or their respective executive officers, directors or affiliates.

Merger Agreement

A summary of the Merger Agreement is contained in Section 12 entitled “Purpose of the Offer; Plans for the Company; Stockholder Approval; Appraisal Rights; The Merger Agreement” in the $26.50 Offer to Purchase, which is being mailed to Company stockholders together with this Schedule 14D-9. The summary of the Merger Agreement contained in the $26.50 Offer to Purchase summary is incorporated herein by this reference, but is qualified in its entirety by reference to the Merger Agreement, which is the actual legal document governing the Merger and the parties’ respective rights and obligations with respect thereto. A copy of the Merger Agreement is filed as exhibit (e)(35) to this Schedule 14D-9 and is incorporated herein by this reference.

Certain Effects of the $26.50 Offer and the Merger

The Co-Presidents, Executive Vice Presidents and Senior Vice Presidents of the Company have interests in the transactions contemplated by the Merger Agreement that are in addition to their interests as Company stockholders generally. In particular, consummation of the $26.50 Offer will constitute a change in control of the Company under the Company’s Amended Executive Severance Policy — Presidents, Co-Presidents and Executive Vice Presidents and Amended Executive Severance Policy — Senior Vice Presidents, each as in effect on the date of the Merger Agreement, that will entitle those officers to certain severance and related benefits. The Board was aware of these interests and considered them, among other matters described in Item 4 below, in approving the $26.50 Offer, the Merger and the Merger Agreement and in making the recommendations in Item 4 below.

All of the severance and other benefits in favor of the Company’s executive officers previously have been disclosed in prior amendments and exhibits to this Schedule 14D-9, and are summarized in the section entitled “Employment Agreements and Severance Arrangements” in the Information Statement attached as Annex A (and filed as exhibit (e)(34) to this Schedule 14D-9) and incorporated herein by this reference.

In addition, to the extent that PeopleSoft executive officers and directors hold options to purchase PeopleSoft common stock or hold shares of PeopleSoft restricted stock, they will be entitled to receive the consideration payable with respect to those securities pursuant to the Merger Agreement. Under the terms of the stock option agreements with the Company’s directors, all unvested stock options will automatically vest upon a change of control, which would include the consummation of the $26.50 Offer. Under the terms of the Merger Agreement, all options to purchase PeopleSoft common stock outstanding immediately prior to the Merger will be converted into options to purchase Oracle common stock on substantially the same terms and conditions as applied to the PeopleSoft stock options prior to the Merger (except that each option will be exercisable for the number of Oracle shares equal to the number of PeopleSoft shares for which the PeopleSoft option had been exercisable multiplied by the “option exchange ratio” and the exercise price per Oracle share will be equal to the exercise price per PeopleSoft share divided by the option exchange ratio, as specified in the Merger Agreement), and all PeopleSoft restricted stock outstanding immediately prior to the Merger will be canceled in exchange for an obligation of Oracle to pay the cash price per restricted share equal to the price paid per share of PeopleSoft common stock in the tender offer, with such cash payment subject to substantially the same terms and conditions as applied to the Company restricted stock (including vesting schedules and terms of acceleration of vesting). The option exchange ratio is defined in the Merger Agreement as a fraction, the numerator of which is the cash price per PeopleSoft share paid in the tender offer and the denominator of which is the average closing price of Oracle common stock on the Nasdaq National Market over the ten trading days preceding (but not including) the date the Merger becomes effective.

Consulting Agreement

On September 30, 2004, director Aneel Bhusri was elected Vice Chairman and became a full time consultant to the Company. In these capacities, he became responsible for leading the development of PeopleSoft’s corporate strategy, technology vision and long-term product roadmap and strategy. Mr. Bhusri reports to the Chief Executive Officer of the Company and is responsible for supervising the activities of the Executive Vice President of Products and Technology and the Chief Technology Officer. On December 6, 2004, the Corporate Governance/ Nominating Committee of the Board approved the Company entering into a consulting agreement with Mr. Bhusri (the “Consulting Agreement”), setting forth the basis of this relationship. Pursuant to the Consulting Agreement, the Company agreed to pay Mr. Bhusri $125,000 per month for these services beginning October 1, 2004, and will reimburse him for reasonable out of pocket expenses. Such payments are in addition to directors’ fees to which Mr. Bhusri is entitled as a member of the Board. Pursuant to the mutual agreement of Mr. Bhusri and the Company, the Consulting Agreement will be terminated effective December 31, 2004. Mr. Bhusri remains a General Partner with Greylock Partners. A copy of the Consulting Agreement is attached as exhibit (e)(36) to this Schedule 14D-9 and is incorporated herein by this reference.


Item 4.	*The Solicitation or Recommendation*

Item 4 is hereby amended and supplemented with the following information:

Solicitation/ Recommendation

After careful consideration, including a thorough review of the terms and conditions of the Merger Agreement (including the terms and conditions of the $26.50 Offer and the Merger) with the Company’s legal and financial advisors, the transaction committee of independent directors (the “Transaction Committee”) and the full Board of Directors determined at a meeting on December 12, 2004 that the terms of the $26.50 Offer, the Merger and the Merger Agreement are fair to and in the best interests of the Company’s stockholders, and based on the unanimous recommendation of the Transaction Committee, the Board of Directors unanimously (with Messrs. Aneel Bhusri and David Duffield abstaining) approved and declared advisable the $26.50 Offer, the Merger and the Merger Agreement.

Accordingly, the Board of Directors recommends that the Company’s stockholders accept the $26.50 Offer, tender their shares to Merger Sub for purchase pursuant to the $26.50 Offer and, if required by applicable Delaware law, approve and adopt the Merger Agreement.

A press release and a joint letter from the Company and Oracle to the Company’s stockholders announcing the Merger Agreement and communicating the recommendation of the Board of Directors are filed as exhibits (a)(141) and (a)(142) to this Schedule 14D-9, respectively, and are incorporated herein by this reference.

Item 4 is hereby further amended and supplemented by adding the following new paragraphs to Item 4(b):

Background of the Offer; Reasons for Recommendation


	*Background*

On September 9, 2004, the United States District Court for the Northern District of California ruled against the United States Department of Justice in its case challenging Oracle’s proposed acquisition of PeopleSoft as anti-competitive. Shortly thereafter, Oracle’s advisors contacted PeopleSoft’s advisors and suggested that Oracle might have some “flexibility.” During the week of September 12, 2004, PeopleSoft’s legal and financial advisors had several conversations with Oracle’s advisors to determine if there was a basis to begin negotiations with Oracle. Based on those conversations, PeopleSoft concluded that at that time Oracle did not have the necessary flexibility to negotiate a transaction that would be both at an appropriate price and provide PeopleSoft’s stockholders with reasonable certainty of consummation (given the uncertainty that still existed as to whether the Department of Justice would appeal the antitrust ruling) and also would have

reasonable protections for PeopleSoft’s business if the transaction were never consummated. There was no discussion of specific prices during these conversations.

During the trial in the Delaware Chancery Court in which Oracle requested that the Court enjoin PeopleSoft’s use of the Customer Assurance Program and require the Company’s Board of Directors to redeem the Rights issued under the Company’s First Amended and Restated Preferred Shares Rights Agreement, effective as of December 16, 1997 and amended as of December 26, 2002 (the “Rights Plan”), two Oracle executives testified that Oracle was spending more time considering reducing its tender offer price below the then-current $21.00 price than considering increasing the $21.00 offer price. On November 1, 2004, Oracle announced the $24.00 Offer and extended the expiration date of its amended tender offer to midnight, New York City time on Friday, November 19, 2004. In connection with the $24.00 Offer, Oracle stated that the $24.00 Offer was Oracle’s “best and final offer,” and if a majority of the outstanding PeopleSoft shares on a fully diluted basis were not tendered by the November 19th expiration date, Oracle would withdraw its tender offer. On November 10, 2004, after the Company’s Board of Directors voted unanimously to recommend that PeopleSoft stockholders reject the $24.00 Offer, members of the Transaction Committee contacted Ms. Safra Catz and Mr. Charles Phillips, the Co-Presidents of Oracle, to inform them of the Board’s recommendation and to reiterate that, as members of the Company’s Board had testified in the Delaware trial, the Board would be willing to discuss an offer at an appropriate price that reflected both the Company’s intrinsic value and the fact that the Company was more valuable to Oracle than when it made its $26.00 per share offer in February 2004. Oracle indicated they understood the Company’s position and appreciated the call.

Promptly following the November 19th expiration date, Oracle announced that approximately 60.8% of the outstanding shares of PeopleSoft common stock were tendered by the November 19th expiration date, and sent a letter to the Company’s Board of Directors in which Oracle reiterated that the $24.00 Offer was its “best and final” offer, and again requested that the Company’s Board redeem the Rights issued under the Rights Plan, and take action to render Section 203 of the Delaware General Corporation Law inapplicable to the Oracle tender offer. Oracle also advised the Company that it was separately transmitting a draft merger agreement to the Company’s legal advisors.

In response to Oracle’s letter, the Company’s Board of Directors met and determined, given Oracle’s repeated statements that the $24.00 Offer was its “best and final” offer and the Board’s unanimous determination that the $24.00 Offer was inadequate and did not reflect the true value of the Company or the increased value of the Company to Oracle since Oracle’s $26.00 tender offer price was announced February 4, 2004, that negotiating other terms of an agreement at an inadequate $24.00 price would not be in the best interests of the Company’s stockholders. Thereafter, on November 20, 2004, Mr. A. George “Skip” Battle, a PeopleSoft director and chairman of the Transaction Committee, sent a letter to Messrs. Lawrence Ellison and Jeff Henley, the Chief Executive Officer and Chairman of Oracle, respectively, acknowledging receipt of Oracle’s letter and reiterating that, as members of the Company’s Board had testified in the Delaware trial and as previously conveyed to Oracle’s Co-Presidents, the Company’s Board would be willing to discuss an offer at an appropriate price above $24.00 that reflected both the Company’s intrinsic value and its increased value to Oracle. The Transaction Committee also authorized the Company’s financial advisors to contact Oracle’s financial advisors to convey the same message, which they did on November 23, 2004.

At a conference on November 24, 2004 relating to the Delaware litigation, the Vice Chancellor decided not to approve the proposed settlement in the consolidated putative stockholder class action previously filed as exhibit (e)(21) to Amendment No. 29 to this Schedule 14D-9, and scheduled additional testimony for December 13 and 14, 2004 with respect to Oracle’s request for an order requiring the Company’s Board to redeem the Rights issued under the Rights Plan in order to permit the consummation of the $24.00 Offer. On December 3, 2004, Mr. Battle testified in his deposition in the Delaware case that, prior to November 24, 2004, he had been advised by a major PeopleSoft stockholder that an Oracle official had indicated to the stockholder that Oracle could see its way to paying $26.50 per share in cash (or $27.00 in a combination of cash and stock). Mr. Battle then consulted with several other members of the Board and its advisors and determined to recommend to the Board at a meeting to be held the following week that it authorize a meeting with Oracle to discuss a transaction, if it could be confirmed that Oracle understood that the Company’s price

of $26.50 per share was firm and Oracle confirmed it was willing to negotiate a merger agreement on that basis. However, on November 29, Mr. Battle was advised by the same major stockholder that the Oracle official was no longer suggesting a willingness by Oracle to increase its offer price above $24.00 per share.

On November 24, 2004, Oracle delivered notice to the Company of its intent to nominate four nominees for election to the Company’s Board of Directors at the Company’s 2005 Annual Meeting of Stockholders. On December 10, 2004, the Company announced that the 2005 Annual Meeting would be held on March 25, 2005 and announced it was nominating four current PeopleSoft directors for re-election at that meeting.

On December 7, 2004, the Company sent a letter to the Vice Chancellor enclosing portions of the transcript of Mr. Battle’s December 3, 2004 deposition relating to the stockholder conversations described above, in connection with an application to close the courtroom to non-parties during the portions of the December 13 and 14 hearings relating to Mr. Battle’s conversations with the major stockholder. PeopleSoft made the request to close the courtroom to avoid potential damage to the Company’s financial results for the fourth quarter of 2004 that might have resulted from customer reactions to testimony regarding those conversations. In a December 9, 2004 conference with the parties’ counsel with respect to the application to close the courtroom, the Vice Chancellor encouraged both parties’ legal counsel to consult with their respective clients as to whether there was any basis for discussions. The Vice Chancellor also authorized Oracle’s counsel to show the relevant portions of Mr. Battle’s deposition transcript to Oracle’s officers and directors.

Later on December 9, 2004, the Transaction Committee met and determined to authorize the Company’s outside legal advisors to contact Oracle’s outside legal advisor on December 10. On December 10, the Company’s outside legal advisors contacted Oracle’s legal advisor, referred to Mr. Battle’s deposition testimony described above, and advised Oracle’s legal advisor that if Oracle were prepared to make a firm, unconditional offer at a $26.50 per share price in cash (or $27.00 in cash and stock), Mr. Battle remained prepared to meet to negotiate a transaction on that basis, and that Mr. Battle continued to believe that it was likely that the other members of the Transaction Committee would be of the same view. The Company’s legal advisors also stated that the call should not be construed as an invitation to negotiate below $26.50, but that if Oracle confirmed its interest in a transaction at that price, discussions on other terms or conditions could be arranged. The Company’s legal advisors also advised Oracle’s counsel that the Company’s Board remained absolutely convinced that the Company was worth more than when Oracle made its $26.00 offer in February 2004.

Later on December 10, 2004, Oracle’s legal advisor contacted the Company’s legal advisors to confirm that Oracle would be willing to negotiate a merger agreement at a $26.50 per share price. Thereafter and until the Merger Agreement was executed, legal advisors to the Company and Oracle negotiated the terms and conditions of the Merger Agreement.

On December 11, 2004, the Company authorized certain information that had been produced or disclosed to Oracle’s counsel in the Delaware case and designated as for attorneys eyes only to be made available to Oracle’s executives and representatives. On that same day, the Company and Oracle entered into a confidentiality agreement with Oracle, a copy of which is attached as exhibit (e)(37) to this Schedule 14D-9, and thereafter PeopleSoft provided certain additional non-public information to Oracle.

On the evening of December 12, 2004, following negotiations of the other terms of the Merger Agreement by the respective legal advisors, Mr. Battle had a conversation with Mr. Donald L. Lucas, an independent director of Oracle and a member of the Acquisition Committee of Oracle’s Board of Directors. Both men confirmed their expectations that their respective Boards would approve the Merger Agreement based on the $26.50 per share price and the other terms contained in the Merger Agreement as negotiated.

Later in the evening on December 12, 2004, the Company’s Board of Directors met with the Company’s management and its legal and financial advisors to discuss the proposed $26.50 Offer, the Merger and the Merger Agreement, and the legal, financial and other considerations relevant thereto. The Company’s legal advisors presented a summary of the terms and conditions of the proposed Merger Agreement. Citigroup Global Markets Inc. (“Citigroup”) and Goldman, Sachs & Co. (“Goldman Sachs”), the Company’s

financial advisors, reviewed with the Board financial aspects of the proposed $26.50 Offer and Merger, and each of Citigroup and Goldman Sachs rendered to the Board of Directors an oral opinion (which was confirmed by delivery of each financial advisor’s separate written opinion dated December 12, 2004) to the effect that, as of December 12, 2004, the $26.50 per share cash consideration to be received in the Offer and the Merger by holders of PeopleSoft common stock (other than Oracle, Merger Sub and their respective affiliates) was fair, from a financial point of view, to such holders. At the conclusion of these discussions, the Transaction Committee unanimously determined to recommend that (a) the full Board approve the $26.50 Offer, the Merger and the Merger Agreement, (b) the Board approve the acquisition of Company stock pursuant to the $26.50 Offer and the Merger for purposes of Section 203 of the Delaware General Corporation Law, (c) the Board amend the Rights Plan to render the Rights Plan inapplicable to the $26.50 Offer, the Merger Agreement and the Merger, and (d) the Board recommend that Company stockholders accept the $26.50 Offer, tender their shares to Merger Sub pursuant to the $26.50 Offer and, if required by applicable Delaware law, approve and adopt the Merger Agreement.

After careful consideration, including consultation with the Company’s management and the Company’s legal and financial advisors, and taking into account the unanimous recommendations of the Transaction Committee described above and the factors described under “Reasons for the Recommendation of the Board” below, the Board of Directors unanimously (with Messrs. Bhusri and Duffield, who were not members of the Transaction Committee, abstaining) determined that the terms of the $26.50 Offer, the Merger and the Merger Agreement were fair to and in the best interests of the Company’s stockholders and approved and declared advisable the $26.50 Offer, the Merger and the Merger Agreement. The Board unanimously (with the two directors abstaining) determined to recommend that the Company’s stockholders accept the $26.50 Offer, tender their shares to Merger Sub pursuant to the $26.50 Offer and, if required by applicable Delaware law, approve and adopt the Merger Agreement. The Board of Directors also unanimously (with the two directors abstaining) approved the acquisition of PeopleSoft common stock pursuant to the $26.50 Offer and the Merger for purposes of Section 203 and approved an amendment to the Rights Plan rendering the Rights Plan inapplicable to the $26.50 Offer, the Merger and the Merger Agreement. This amendment was filed by the Company as an exhibit to a Current Report on Form 8-K filed December 15, 2004.

Subsequently, Oracle advised that its Board of Directors had also approved the Merger Agreement, and the Company, Oracle and Merger Sub executed the Merger Agreement. On December 13, 2004 the Company issued a press release announcing the $26.50 Offer and the execution of the Merger Agreement. A copy of the Company’s press release is filed as exhibit (a)(141) to this Schedule 14D-9 and is incorporated herein by this reference.


	*Reasons for the Recommendation of the Board*

In reaching the conclusion that the $26.50 Offer, the Merger and the Merger Agreement are fair to and in the best interests of the Company’s stockholders, and in making the recommendations described above, the Board of Directors consulted with the Company’s management and legal and financial advisors, and considered a number of reasons, including the following reasons:

• The Board believed that $26.50 was the highest price that Oracle would be willing to pay and that Oracle would be unlikely to be willing to pay a higher price in the future. In this respect, the Board believed that there were no more desirable strategic or other transaction alternatives to the Oracle transaction that could likely be consummated before the Company’s 2005 Annual Meeting of Stockholders, noting the 18-month period that Oracle’s tender offer had been outstanding and the significant related publicity, and the fact that the Company had made inquiries of other potential acquirers or strategic partners, but none had led to negotiations or agreements for an alternative transaction.

• The fact that the holders of a majority of PeopleSoft common stock tendered their shares by the November 19, 2004 expiration time for the $24.00 Offer, that Company representatives had conversations with various Company stockholders in which the stockholders, including stockholders who tendered into the $24.00 Offer but indicated to PeopleSoft that they believed the Company was worth

more than $24.00 per share, expressed the view that a sale of the Company at an appropriate price above $24.00 would be advisable, and the Board’s belief that the holders of a majority of PeopleSoft shares would support and tender into the $26.50 Offer.

• The $26.50 Offer reflects:

• a 54.8% premium to the 30-day average trading price of PeopleSoft common stock prior to September 9, 2004, the date the United States District Court for the Northern District of California ruled against the United States Department of Justice in its antitrust challenge to Oracle’s proposed acquisition of PeopleSoft;

• a 75.4% premium to the closing price of PeopleSoft common stock on June 5, 2003, the last trading day prior to the announcement of Oracle’s initial $16.00 offer;

• a 33.3% premium to the last 12-months average trading price of PeopleSoft common stock; and

• a 35.6% premium to the average closing price of PeopleSoft common stock since Oracle’s initial offer was announced.

• The Board’s view, despite its confidence in management’s financial plan for the fourth quarter of 2004 and for 2005, that there remained a risk that the continued unpredictability and uncertainty surrounding the Oracle tender offer, the pending litigation in Delaware and the imminent trial in PeopleSoft’s California lawsuit against Oracle, the potential for a proxy contest (during which Oracle might maintain or raise its $24.00 Offer, but was not likely to raise it to $26.50 or higher), and other risks and uncertainties relating to the industry and the Company’s business, could adversely affect the Company’s business, operations and performance, and thereafter there would be a risk that an acquisition might be concluded at a price lower than $26.50 per share.

• The separate opinions of Citigroup and Goldman Sachs, each dated December 12, 2004, as to the fairness, from a financial point of view and as of such date, of the $26.50 per share cash consideration to be received in the Offer and the Merger by holders of PeopleSoft common stock (other than Oracle, Merger Sub and their respective affiliates). The full text of the written opinions of Citigroup and Goldman Sachs, which set forth the assumptions made, matters considered and limitations on the review undertaken by Citigroup and Goldman Sachs, are attached hereto as Annexes B and C and are filed as exhibits (a)(143) and (a)(144) to this Schedule 14D-9, respectively, and are incorporated herein by reference. Citigroup’s and Goldman Sachs’ opinions are directed only to the fairness from a financial point of view of the $26.50 per share cash consideration to be received in the Offer and the Merger by holders of PeopleSoft common stock (other than Oracle, Merger Sub and their respective affiliates) and are not intended to constitute, and do not constitute, recommendations as to whether any stockholder should tender shares of PeopleSoft common stock pursuant to the Offer or as to any other actions to be taken by any stockholder in connection with the Offer or the Merger. Holders of PeopleSoft common stock are encouraged to read each of these opinions carefully in its entirety.

• Under the Merger Agreement, the obligations of Oracle and Merger Sub to consummate the $26.50 Offer and the Merger would be subject to a very limited number of conditions, with no financing condition and no “material adverse change” condition or other condition relating to the performance of the Company following the execution of the Merger Agreement. Therefore, for the first time in the 18 months that Oracle was seeking to acquire the Company, there would be negligible risk to the Company that approving an acquisition might damage the Company’s business to an extent that would permit Oracle not to complete the transaction and that such approval and non-consummation would leave the Company in a damaged position.

• The Board’s belief that entering into the Merger Agreement, which by its terms permits the Board to terminate the Merger Agreement to accept a “Superior Proposal” on payment of a $200 million fee to Oracle, was unlikely to prevent any realistic opportunity for an acquisition of the Company on terms more favorable to those in the Merger Agreement.

The Transaction Committee and the Board of Directors viewed the items above as specific reasons for determining that the $26.50 Offer, the Merger Agreement and the Merger are fair to and in the best interests of the Company stockholders, and for recommending that the stockholders of the Company accept the $26.50 Offer, tender their shares to Merger Sub pursuant to the $26.50 Offer and, if required by applicable Delaware law, approve and adopt the Merger Agreement.

Considerations of the Board

The foregoing discussion of the information and factors considered and reasons cited by the Transaction Committee and the Board of Directors is not meant to be exhaustive, but includes the material information, factors and reasons considered by the Transaction Committee and the Board of Directors in reaching their respective conclusions and recommendations with respect to the $26.50 Offer, the Merger Agreement and the Merger. The members of the Board of Directors evaluated the various factors listed above in light of their knowledge of the business, financial condition and prospects of the Company and after taking into account the views of the Company’s management and legal and financial advisors. In light of the number and variety of factors and amount of information that the Transaction Committee and the Board of Directors considered, and the varied reasons that supported their opinions and conclusions, the members of the Transaction Committee and the Board of Directors did not find it practicable to assign relative weights to the foregoing factors or reasons. However, the recommendations of the Transaction Committee and Board of Directors were made after considering the totality of the information and factors involved. In addition, individual members of the Board of Directors may have given different weight to different factors and, in arriving at these recommendations, the directors of the Company were aware of the interests of certain officers and directors of the Company as described under “Past Contacts, Transactions, Negotiations and Agreements.”

Messrs. Bhusri and Duffield, the two directors who were not members of the Transaction Committee, abstained from voting on the approvals and recommendations described above in view of the conflicts of interest created by their positions at the Company.

Recommendation of the Board

After considering the factors and in light of the reasons described above, the Transaction Committee and the Board of Directors (with the two directors abstaining) each determined that the $26.50 Offer and the Merger Agreement are fair to and in the best interests of the Company’s stockholders and approved and declared advisable the $26.50 Offer, the Merger Agreement and the Merger.

Therefore, the Board of Directors unanimously (with two directors abstaining) recommends that the Company’s stockholders accept the $26.50 Offer, tender their shares to Merger Sub for purchase pursuant to the $26.50 Offer and, if required by applicable Delaware law, approve and adopt the Merger Agreement.

Intent to Tender

To the best knowledge of the Company, each of the Company’s executive officers, directors, affiliates or subsidiaries currently intends to tender shares of PeopleSoft common stock held of record or beneficially by such person for purchase pursuant to the $26.50 Offer, or in a subsequent offering period if Oracle elects to provide one. Pursuant to the Merger Agreement, each option to purchase PeopleSoft common stock held by such individuals automatically will be converted in the Merger into options to purchase Oracle common stock, and each share of PeopleSoft restricted stock held by such individuals will be canceled in exchange for an obligation of Oracle to pay $26.50 per share, as described in Item 3 above.


Item 7.	*Purposes of the Transaction and Plans or Proposals.*

The information disclosed above under Items 2, 3, and 4 is hereby incorporated by reference into this Item 7.


Item 9.	*Materials to Be Filed as Exhibits*


Exhibit No.		Document

	(a)(1)	Press release issued by PeopleSoft on June 12, 2003(1)
	(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)(1)
	(a)(3)	Letter, dated June 13, 2003, to PeopleSoft’s stockholders(2)
	(a)(4)	Letter to customers issued June 16, 2003 (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)(3)
	(a)(5)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 17, 2003 425 filing)(3)
	(a)(6)	Press release issued by CRN (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(7)	Press release issued by CNET News.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(8)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s June 13, 2003 425 filing)(4)
	(a)(9)	Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(4)
	(a)(10)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)(4)
	(a)(11)	Press release issued by ComputerWeekly.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(12)	Press release issued by The Motley Fool (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(13)	Press release issued by the Higher Education User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(14)	Text of information posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)(4)
	(a)(15)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)(4)
	(a)(16)	Press release issued by the Distributors & Manufacturers’ User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(17)	Press release issued by the Connecticut Attorney General’s Office(4)
	(a)(18)	Press release issued by PeopleSoft on June 20, 2003(4)
	(a)(19)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(20)	Letter to PeopleSoft employees (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(21)	Press release issued by eWeek (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(22)	Press release issued by the Healthcare Industry User Group (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)(5)
	(a)(23)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(24)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)(5)
	(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)(5)
	(a)(26)	Press release issued by Quest (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)(5)


Exhibit No.		Document

	(a)(27)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)(5)
	(a)(28)	Transcript of TriNet webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)(5)
	(a)(29)	Transcript of CNBC webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)(5)
	(a)(30)	Press release issued by the International Customer Advisory Board (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(31)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)(5)
	(a)(32)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)(5)
	(a)(33)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)(5)
	(a)(34)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)(5)
	(a)(35)	Advertisement placed by PeopleSoft on July 2, 2003 (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)(5)
	(a)(36)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 7, 2003 425 filing)(6)
	(a)(37)	Press release issued by InformationWeek (incorporated by reference to PeopleSoft’s July 8, 2003 425 filing)(6)
	(a)(38)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 14, 2003 425 filing)(6)
	(a)(39)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)(6)
	(a)(40)	Press release issued by CRMDaily.com (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)(6)
	(a)(41)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 18, 2003 425 filing)(6)
	(a)(42)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 22, 2003 425 filing)(6)
	(a)(43)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)(6)
	(a)(44)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)(6)
	(a)(45)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 28, 2003 425 filing)(7)
	(a)(46)	Press release issued by International Customer Advisory Board and Quest (incorporated by reference to PeopleSoft’s July 29, 2003 425 filing)(7)
	(a)(47)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s August 13, 2003 425 filing)(7)
	(a)(48)	Redacted version of First Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(7)
	(a)(49)	Press release issued by PeopleSoft on August 29, 2003(9)
	(a)(50)	Press release issued by PeopleSoft on September 4, 2003(9)
	(a)(51)	Unredacted version of First Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(9)
	(a)(52)	Transcript of PeopleSoft Analyst Day conference held by PeopleSoft on September 4, 2003(9)


Exhibit No.		Document

	(a)(53)	PeopleSoft Analyst Day Power Point presentation materials(9)
	(a)(54)	PeopleSoft Analyst Day reconciliation of Non-GAAP to GAAP financial measures(9)
	(a)(55)	Excerpts from transcript of conference call held by PeopleSoft on October 23, 2003(10)
	(a)(56)	Order entered by the Superior Court of California, County of Alameda(11)
	(a)(57)	Press release issued by PeopleSoft on November 17, 2003(12)
	(a)(58)	Press release issued by PeopleSoft on December 2, 2003(13)
	(a)(59)	Second Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(14)
	(a)(60)	Text of background information provided to PeopleSoft sales force to respond to customer inquiries following Oracle statements of November 24, 2003(15)
	(a)(61)	Press release issued by PeopleSoft on December 19, 2003(16)
	(a)(62)	Press release issued by PeopleSoft on January 12, 2004(16)
	(a)(63)	E-mail sent to PeopleSoft employees(17)
	(a)(64)	Letter to the Wall Street Journal dated January 22, 2004(17)
	(a)(65)	Press release issued by PeopleSoft on January 24, 2004(17)
	(a)(66)	Press release issued by PeopleSoft on January 30, 2004(17)
	(a)(67)	Excerpts from transcript of conference call held by PeopleSoft on January 29, 2004(17)
	(a)(68)	Order entered by the Superior Court of California, County of Alameda(17)
	(a)(69)	Oracle and Pepper Acquisition Corp. Notice of Demurrer and Demurrer(17)
	(a)(70)	Oracle and Pepper Acquisition Corp. Notice of Motion to Strike and Motion to Strike(17)
	(a)(71)	Advertisement placed by PeopleSoft on February 3, 2004(17)
	(a)(72)	Press release issued by PeopleSoft on February 4, 2004(18)
	(a)(73)	Message sent to PeopleSoft employees(18)
	(a)(74)	Press release issued by PeopleSoft on February 9, 2004(19)
	(a)(75)	Letter to employees dated February 9, 2004(19)
	(a)(76)	Letter to customers dated February 9, 2004(19)
	(a)(77)	E-mail sent to PeopleSoft employees on February 25, 2004(20)
	(a)(78)	E-mail sent to PeopleSoft employees on February 27, 2004(20)
	(a)(79)	Investor presentation materials(20)
	(a)(80)	Press release issued by PeopleSoft on February 10, 2004(20)
	(a)(81)	Press release issued by U.S. Department of Justice on February 26, 2004(20)
	(a)(82)	Press release issued by PeopleSoft on February 26, 2004(20)
	(a)(83)	Order entered by the Superior Court of California, County of Alameda, overruling Defendants’ Demurrer to Plaintiffs’ Second Amended Complaint(20)
	(a)(84)	Order entered by the Superior Court of California, County of Alameda, denying Defendants’ Motion to Strike Portions of Plaintiffs’ Second Amended Complaint(20)
	(a)(85)	Letter to stockholders dated March 3, 2004(20)
	(a)(86)	OneVoice e-mail newsletter sent to PeopleSoft employees on March 4, 2004(21)
	(a)(87)	OneVoice e-mail newsletter sent to PeopleSoft employees on March 9, 2004(21)
	(a)(88)	OneVoice e-mail newsletter sent to PeopleSoft employees on March 12, 2004(21)
	(a)(89)	Press release issued by PeopleSoft on March 12, 2004(21)
	(a)(90)	Press release issued by PeopleSoft on March 12, 2004(21)
	(a)(91)	Press release issued by PeopleSoft on March 19, 2004(22)
	(a)(92)	Presentation given at PeopleSoft’s 2004 Annual Meeting of Stockholders(22)
	(a)(93)	Transcript of PeopleSoft’s 2004 Annual Meeting of Stockholders(22)


Exhibit No.		Document

	(a)(94)	Press release issued by PeopleSoft on March 25, 2004(22)
	(a)(95)	Transcript of conference call held by PeopleSoft on January 29, 2004 (incorporated by reference to Exhibit 99.2 to PeopleSoft’s February 4, 2004 Form 8-K)(22)
	(a)(96)	Redacted version of the Cross-complaint filed by Oracle in the Superior Court of the State of California, County of Alameda(23)
	(a)(97)	Press release issued by the Michigan Attorney General’s Office on April 7, 2004(23)
	(a)(98)	Press release issued by the Ohio Attorney General’s Office on April 9, 2004(23)
	(a)(99)	Excerpts from transcript of conference call held by PeopleSoft on April 22, 2004(24)
	(a)(100)	Press release issued by PeopleSoft on May 14, 2004(25)
	(a)(101)	Excerpts from transcript of PeopleSoft’s 2004 Leadership Summit News Conference held on May 18, 2004(25)
	(a)(102)	Press release issued by PeopleSoft on May 26, 2004(26)
	(a)(103)	Press release issued by PeopleSoft on May 26, 2004(26)
	(a)(104)	Redacted version of the Amended Complaint for Declaratory and Injunctive Relief filed by Oracle and Pepper Acquisition Corp. in the Delaware Court of Chancery(31)
	(a)(105)	E-mail sent to PeopleSoft employees on July 2, 2004(32)
	(a)(106)	Press release issued by PeopleSoft on July 7, 2004(33)
	(a)(107)	Transcript of conference call held by PeopleSoft on July 27, 2004 (incorporated by reference to Exhibit 99.1 to PeopleSoft’s August 2, 2004 Form 8-K)(34)
	(a)(108)	Excerpts from transcript of the Adams Harkness Annual Summer Seminar held on August 4, 2004(34)
	(a)(109)	Press release issued by PeopleSoft on September 9, 2004(35)
	(a)(110)	Letter sent to PeopleSoft employees on September 9, 2004(35)
	(a)(111)	Letter sent to PeopleSoft customers on September 9, 2004(36)
	(a)(112)	Letter sent to PeopleSoft prospective clients on September 10, 2004(36)
	(a)(113)	Excerpts from transcript of Connect 2004 keynote address(37)
	(a)(114)	Excerpts from transcript of Connect 2004 media and analyst news conference(37)
	(a)(115)	Press release issued by PeopleSoft on October 1, 2004(37)
	(a)(116)	Press release issued by PeopleSoft on September 23, 2004(37)
	(a)(117)	Press release issued by PeopleSoft on October 1, 2004(37)
	(a)(118)	E-mail sent to PeopleSoft employees on October 18, 2004(41)
	(a)(119)	Excerpts from transcript of conference call held by PeopleSoft on October 21, 2004(41)
	(a)(120)	Press release issued by PeopleSoft on October 26, 2004(41)
	(a)(121)	Press release issued by PeopleSoft on November 1, 2004(42)
	(a)(122)	Press release issued by PeopleSoft on November 10, 2004(43)
	(a)(123)	Transcript of conference call held by PeopleSoft on November 10, 2004(43)
	(a)(124)	Letter sent to PeopleSoft employees on November 10, 2004(43)
	(a)(125)	Letter sent to PeopleSoft customers on November 10, 2004(43)
	(a)(126)	Press release issued by PeopleSoft on November 11, 2004(43)
	(a)(127)	Investor presentation materials(43)
	(a)(128)	Investor presentation materials(44)
	(a)(129)	E-mail sent to PeopleSoft employees on November 15, 2004(44)
	(a)(130)	Press release issued by PeopleSoft on November 16, 2004(44)
	(a)(131)	Letter sent to Larry Ellison, Chief Executive Officer of Oracle Corporation, on November 18, 2004(45)
	(a)(132)	E-mail sent to PeopleSoft employees on November 17, 2004(46)


Exhibit No.		Document

	(a)(133)	Press release issued by PeopleSoft on November 20, 2004(47)
	(a)(134)	Press release issued by PeopleSoft on November 20, 2004(47)
	(a)(135)	Letter sent to PeopleSoft employees on November 20, 2004(47)
	(a)(136)	Letter sent to PeopleSoft customers on November 20, 2004(47)
	(a)(137)	Press release issued by PeopleSoft on November 24, 2004(48)
	(a)(138)	Letter sent to PeopleSoft employees on November 24, 2004(48)
	(a)(139)	Press release issued by PeopleSoft on December 10, 2004(49)
	(a)(140)	Investor presentation materials (also previously filed under cover of Schedule 14A by PeopleSoft on December 7, 2004)(49)
	(a)(141)	Press release issued by PeopleSoft on December 13, 2004 (incorporated by reference to exhibit 99.1 to PeopleSoft’s Current Report on Form 8-K, filed with the SEC December 13, 2004)
	(a)(142)	Joint letter from Oracle Corporation and PeopleSoft to PeopleSoft stockholders dated December 15, 2004
	(a)(143)	Opinion of Citigroup Global Markets Inc. dated December 12, 2004
	(a)(144)	Opinion of Goldman, Sachs & Co. dated December 12, 2004
	(e)(1)	Excerpts from PeopleSoft’s Definitive Proxy Statement dated April 28, 2003 relating to the 2003 Annual Meeting of Stockholders(1)
	(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)(1)
	(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)(1)
	(e)(4)	Executive Severance Policy — Executive Vice Presidents, effective as of January 1, 2003(8)
	(e)(5)	Executive Severance Policy — Senior Vice Presidents, effective as of January 1, 2003(8)
	(e)(6)	Terms of Customer Assurance Program (revised)(10)
	(e)(6)(i)	Terms of Customer Assurance Program (replacement version) +(11)
	(e)(7)	Form of letter sent to customers(11)
	(e)(8)	Terms of Customer Assurance Program(11)
	(e)(9)	Amendment No. 1 to the Bylaws of PeopleSoft(11)
	(e)(10)	Terms of Customer Assurance Program (extension term)(12)
	(e)(11)	Employment Agreement, dated January 30, 2004, by and between Craig Conway and PeopleSoft, Inc.(17)
	(e)(12)	Excerpts from PeopleSoft’s Definitive Proxy Statement dated February 20, 2004 relating to the 2004 Annual Meeting of Stockholders(22)
	(e)(13)	Memorandum of understanding regarding settlement of stockholder class actions(26)
	(e)(14)	Amendment to memorandum of understanding regarding settlement of stockholder class actions(27)
	(e)(15)	White paper dated February 1, 2004(28)
	(e)(16)	June 15, 2004 weblog postings(28)
	(e)(17)	Second amendment to memorandum of understanding regarding settlement of stockholder class actions(28)
	(e)(18)	Amended Executive Severance Policy — Executive Vice Presidents, amended as of June 14, 2004(29)
	(e)(19)	Amended Executive Severance Policy — Senior Vice Presidents, amended as of June 14, 2004(29)


Exhibit No.		Document

	(e)(20)	June 16 and 17, 2004 weblog postings(29)
	(e)(21)	Stipulation and Agreement of Compromise, Settlement and Release dated June 17, 2004(29)
	(e)(22)	June 20, 21 and 23, 2004 weblog postings(30)
	(e)(23)	June 26, 28 and 30, and July 1, 2004 weblog postings(31)
	(e)(23)(a)	Chart referred to in the ‘The Government Rests‘ weblog posting(31)
	(e)(24)	July 2, 2004 weblog postings(32)
	(e)(25)	Terms of Amended Customer Assurance Program approved July 6, 2004(32)
	(e)(26)	July 20, and August 4, 2004 weblog postings(34)
	(e)(27)	Addendum to Employment Contract between Guy Dubois and PeopleSoft France S.A. (incorporated by reference to Exhibit 10.8 filed with PeopleSoft’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004)(34)
	(e)(28)	Terms of Amended Customer Assurance Program approved October 11, 2004(38)
	(e)(28)(a)	Terms of Amended Customer Assurance Program approved October 11, 2004 (corrected)(39)
	(e)(29)	Separation Agreement and General Release, dated October 12, 2004, by and between Ram Gupta and PeopleSoft, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by PeopleSoft, Inc. on October 18, 2004)(40)
	(e)(30)	Retention Agreement, entered into on October 18, 2004, by and between Guy Dubois and PeopleSoft, Inc. (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by PeopleSoft, Inc. on October 18, 2004)(40)
	(e)(31)	Separation Agreement, dated October 18, 2004, by and between Craig Conway and PeopleSoft, Inc. (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by PeopleSoft, Inc. on October 18, 2004)(40)
	(e)(32)	Amended Executive Severance Policy — Presidents, Co-Presidents and Executive Vice Presidents, amended as of October 1, 2004 (incorporated by reference to Exhibit 10.8 to PeopleSoft’s Quarter Report on Form 10-Q for the Quarterly Period Ended September 30, 2004, filed with the SEC November 9, 2004)(43)
	(e)(33)	Amended Executive Severance Policy — Senior Vice Presidents, amended as of September 15, 2004 (incorporated by reference to Exhibit 10.9 to PeopleSoft’s Quarter Report on Form 10-Q for the Quarterly Period Ended September 30, 2004, filed with the SEC November 9, 2004)(43)
	(e)(34)	Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule 14f-1 promulgated thereunder
	(e)(35)	Agreement and Plan of Merger dated as of December 12, 2004 among PeopleSoft, Oracle Corporation and Pepper Acquisition Corp.
	(e)(36)	Consulting Agreement dated as of December 6, 2004 by and between PeopleSoft and Aneel Bhusri
	(e)(37)	Confidentiality Agreement dated December 11, 2004, by and between PeopleSoft and Oracle Corporation

(6) Previously filed as an exhibit to PeopleSoft’s Amendment No. 5 to Schedule 14D-9 filed with the SEC July 25, 2003.

(7) Previously filed as an exhibit to PeopleSoft’s Amendment No. 6 to Schedule 14D-9 filed with the SEC August 14, 2003.

(8) Previously filed as an exhibit to PeopleSoft’s Amendment No. 7 to Schedule 14D-9 filed with the SEC August 22, 2003.

(9) Previously filed as an exhibit to PeopleSoft’s Amendment No. 8 to Schedule 14D-9 filed with the SEC September 11, 2003.

(10) Previously filed as an exhibit to PeopleSoft’s Amendment No. 9 to Schedule 14D-9 filed with the SEC October 27, 2003.

† This exhibit replaces and supersedes exhibit (e)(6), which previously was filed in error.

(11) Previously filed as an exhibit to PeopleSoft’s Amendment No. 11 to Schedule 14D-9 filed with the SEC November 17, 2003.

(12) Previously filed as an exhibit to PeopleSoft’s Amendment No. 12 to Schedule 14D-9 filed with the SEC November 19, 2003.

(13) Previously filed as an exhibit to PeopleSoft’s Amendment No. 13 to Schedule 14D-9 filed with the SEC December 5, 2003.

(14) Previously filed as an exhibit to PeopleSoft’s Amendment No. 14 to Schedule 14D-9 filed with the SEC December 15, 2003.

(15) Previously filed as an exhibit to PeopleSoft’s Amendment No. 15 to Schedule 14D-9 filed with the SEC December 19, 2003.

(16) Previously filed as an exhibit to PeopleSoft’s Amendment No. 16 to Schedule 14D-9 filed with the SEC January 13, 2004.

(17) Previously filed as an exhibit to PeopleSoft’s Amendment No. 17 to Schedule 14D-9 filed with the SEC February 3, 2004.

(18) Previously filed as an exhibit to PeopleSoft’s Amendment No. 18 to Schedule 14D-9 filed with the SEC February 4, 2004.

(19) Previously filed as an exhibit to PeopleSoft’s Amendment No. 19 to Schedule 14D-9 filed with the SEC February 9, 2004.

(20) Previously filed as an exhibit to PeopleSoft’s Amendment No. 20 to Schedule 14D-9 filed with the SEC March 4, 2004.

(21) Previously filed as an exhibit to PeopleSoft’s Amendment No. 21 to Schedule 14D-9 filed with the SEC March 15, 2004.

(22) Previously filed as an exhibit to PeopleSoft’s Amendment No. 22 to Schedule 14D-9 filed with the SEC March 29, 2004.

(23) Previously filed as an exhibit to PeopleSoft’s Amendment No. 23 to Schedule 14D-9 filed with the SEC April 13, 2004.

(24) Previously filed as an exhibit to PeopleSoft’s Amendment No. 24 to Schedule 14D-9 filed with the SEC April 28, 2004.

(25) Previously filed as an exhibit to PeopleSoft’s Amendment No. 25 to Schedule 14D-9 filed with the SEC May 20, 2004.

(26) Previously filed as an exhibit to PeopleSoft’s Amendment No. 26 to Schedule 14D-9 filed with the SEC May 27, 2004.

(27) Previously filed as an exhibit to PeopleSoft’s Amendment No. 27 to Schedule 14D-9 filed with the SEC June 14, 2004.

(28) Previously filed as an exhibit to PeopleSoft’s Amendment No. 28 to Schedule 14D-9 filed with the SEC June 16, 2004.

(29) Previously filed as an exhibit to PeopleSoft’s Amendment No. 29 to Schedule 14D-9 filed with the SEC June 18, 2004.

(30) Previously filed as an exhibit to PeopleSoft’s Amendment No. 30 to Schedule 14D-9 filed with the SEC June 28, 2004.

(31) Previously filed as an exhibit to PeopleSoft’s Amendment No. 31 to Schedule 14D-9 filed with the SEC July 2, 2004.

(32) Previously filed as an exhibit to PeopleSoft’s Amendment No. 32 to Schedule 14D-9 filed with the SEC July 7, 2004.

(33) Previously filed as an exhibit to PeopleSoft’s Amendment No. 33 to Schedule 14D-9 filed with the SEC July 7, 2004.

(34) Previously filed as an exhibit to PeopleSoft’s Amendment No. 34 to Schedule 14D-9 filed with the SEC August 12, 2004.

(35) Previously filed as an exhibit to PeopleSoft’s Amendment No. 35 to Schedule 14D-9 filed with the SEC September 9, 2004.

(36) Previously filed as an exhibit to PeopleSoft’s Amendment No. 36 to Schedule 14D-9 filed with the SEC September 10, 2004.

(37) Previously filed as an exhibit to PeopleSoft’s Amendment No. 38 to Schedule 14D-9 filed with the SEC October 5, 2004.

(38) Previously filed as an exhibit to PeopleSoft’s Amendment No. 39 to Schedule 14D-9 filed with the SEC October 12, 2004.

(39) Previously filed as an exhibit to PeopleSoft’s Amendment No. 40 to Schedule 14D-9 filed with the SEC October 12, 2004.

(40) Previously filed as an exhibit to PeopleSoft’s Amendment No. 41 to Schedule 14D-9 filed with the SEC October 18, 2004.

(41) Previously filed as an exhibit to PeopleSoft’s Amendment No. 42 to Schedule 14D-9 filed with the SEC October 29, 2004.

(42) Previously filed as an exhibit to PeopleSoft’s Amendment No. 43 to Schedule 14D-9 filed with the SEC November 2, 2004.

(43) Previously filed as an exhibit to PeopleSoft’s Amendment No. 44 to Schedule 14D-9 filed with the SEC November 12, 2004.

(44) Previously filed as an exhibit to PeopleSoft’s Amendment No. 45 to Schedule 14D-9 filed with the SEC November 18, 2004.

(45) Previously filed as an exhibit to PeopleSoft’s Amendment No. 46 to Schedule 14D-9 filed with the SEC November 18, 2004.

(46) Previously filed as an exhibit to PeopleSoft’s Amendment No. 47 to Schedule 14D-9 filed with the SEC November 18, 2004.

(47) Previously filed as an exhibit to PeopleSoft’s Amendment No. 48 to Schedule 14D-9 filed with the SEC November 22, 2004.

(48) Previously filed as an exhibit to PeopleSoft’s Amendment No. 49 to Schedule 14D-9 filed with the SEC November 26, 2004.

(49) Previously filed as an exhibit to PeopleSoft’s Amendment No. 50 to Schedule 14D-9 filed with the SEC December 10, 2004.

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

Co-President and Chief Financial Officer

Date: December 14, 2004

EXHIBIT INDEX


Exhibit No.		Document

	(a)(1)		Press release issued by PeopleSoft on June 12, 2003	(1)
	(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)(1)
	(a)(3)	Letter, dated June 13, 2003, to PeopleSoft’s stockholders(2)
	(a)(4)	Letter to customers issued June 16, 2003 (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)(3)
	(a)(5)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 17, 2003 425 filing)(3)
	(a)(6)	Press release issued by CRN (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(7)	Press release issued by CNET News.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(8)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s June 13, 2003 425 filing)(4)
	(a)(9)	Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(4)
	(a)(10)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 16, 2003 425 filing)(4)
	(a)(11)	Press release issued by ComputerWeekly.com (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(12)	Press release issued by The Motley Fool (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(13)	Press release issued by the Higher Education User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(14)	Text of information posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)(4)
	(a)(15)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s June 18, 2003 425 filing)(4)
	(a)(16)	Press release issued by the Distributors & Manufacturers’ User Group (incorporated by reference to PeopleSoft’s June 19, 2003 425 filing)(4)
	(a)(17)	Press release issued by the Connecticut Attorney General’s Office(4)
	(a)(18)	Press release issued by PeopleSoft on June 20, 2003(4)
	(a)(19)	Investor presentation materials (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(20)	Letter to PeopleSoft employees (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(21)	Press release issued by eWeek (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(22)	Press release issued by the Healthcare Industry User Group (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)(5)
	(a)(23)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(24)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)(5)
	(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)(5)
	(a)(26)	Press release issued by Quest (incorporated by reference to PeopleSoft’s June 24, 2003 425 filing)(5)


Exhibit No.		Document

	(a)(27)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s June 25,
		2003 425 filing)(5)
	(a)(28)	Transcript of TriNet webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)(5)
	(a)(29)	Transcript of CNBC webcast posted on PeopleSoft’s website (incorporated by reference to PeopleSoft’s June 25, 2003 425 filing)(5)
	(a)(30)	Press release issued by the International Customer Advisory Board (incorporated by reference to PeopleSoft’s June 23, 2003 425 filing)(5)
	(a)(31)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)(5)
	(a)(32)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 1, 2003 425 filing)(5)
	(a)(33)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)(5)
	(a)(34)	Transcript of conference call held by PeopleSoft (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)(5)
	(a)(35)	Advertisement placed by PeopleSoft on July 2, 2003 (incorporated by reference to PeopleSoft’s July 2, 2003 425 filing)(5)
	(a)(36)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 7, 2003 425 filing)(6)
	(a)(37)	Press release issued by InformationWeek (incorporated by reference to PeopleSoft’s July 8, 2003 425 filing)(6)
	(a)(38)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 14, 2003 425 filing)(6)
	(a)(39)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)(6)
	(a)(40)	Press release issued by CRMDaily.com (incorporated by reference to PeopleSoft’s July 16, 2003 425 filing)(6)
	(a)(41)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 18, 2003 425 filing)(6)
	(a)(42)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 22, 2003 425 filing)(6)
	(a)(43)	Advertisement placed by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)(6)
	(a)(44)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 24, 2003 425 filing)(6)
	(a)(45)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s July 28, 2003 425 filing)(7)
	(a)(46)	Press release issued by International Customer Advisory Board and Quest (incorporated by reference to PeopleSoft’s July 29, 2003 425 filing)(7)
	(a)(47)	Press release issued by PeopleSoft (incorporated by reference to PeopleSoft’s August 13, 2003 425 filing)(7)
	(a)(48)	Redacted version of First Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(7)
	(a)(49)	Press release issued by PeopleSoft on August 29, 2003(9)
	(a)(50)	Press release issued by PeopleSoft on September 4, 2003(9)
	(a)(51)	Unredacted version of First Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(9)
	(a)(52)	Transcript of PeopleSoft Analyst Day conference held by PeopleSoft on September 4, 2003(9)
	(a)(53)	PeopleSoft Analyst Day Power Point presentation materials(9)
	(a)(54)	PeopleSoft Analyst Day reconciliation of Non-GAAP to GAAP financial measures(9)


Exhibit No.		Document

	(a)(55)	Excerpts from transcript of conference call held by PeopleSoft on October 23, 2003(10)
	(a)(56)	Order entered by the Superior Court of California, County of Alameda(11)
	(a)(57)	Press release issued by PeopleSoft on November 17, 2003(12)
	(a)(58)	Press release issued by PeopleSoft on December 2, 2003(13)
	(a)(59)	Second Amended Complaint filed by PeopleSoft in the Superior Court of the State of California, County of Alameda(14)
	(a)(60)	Text of background information provided to PeopleSoft sales force to respond to customer inquiries following Oracle statements of November 24, 2003(15)
	(a)(61)	Press release issued by PeopleSoft on December 19, 2003(16)
	(a)(62)	Press release issued by PeopleSoft on January 12, 2004(16)
	(a)(63)	E-mail sent to PeopleSoft employees(17)
	(a)(64)	Letter to the Wall Street Journal dated January 22, 2004(17)
	(a)(65)	Press release issued by PeopleSoft on January 24, 2004(17)
	(a)(66)	Press release issued by PeopleSoft on January 30, 2004(17)
	(a)(67)	Excerpts from transcript of conference call held by PeopleSoft on January 29, 2004(17)
	(a)(68)	Order entered by the Superior Court of California, County of Alameda(17)
	(a)(69)	Oracle and Pepper Acquisition Corp. Notice of Demurrer and Demurrer(17)
	(a)(70)	Oracle and Pepper Acquisition Corp. Notice of Motion to Strike and Motion to Strike(17)
	(a)(71)	Advertisement placed by PeopleSoft on February 3, 2004(17)
	(a)(72)	Press release issued by PeopleSoft on February 4, 2004(18)
	(a)(73)	Message sent to PeopleSoft employees(18)
	(a)(74)	Press release issued by PeopleSoft on February 9, 2004(19)
	(a)(75)	Letter to employees dated February 9, 2004(19)
	(a)(76)	Letter to customers dated February 9, 2004(19)
	(a)(77)	E-mail sent to PeopleSoft employees on February 25, 2004(20)
	(a)(78)	E-mail sent to PeopleSoft employees on February 27, 2004(20)
	(a)(79)	Investor presentation materials(20)
	(a)(80)	Press release issued by PeopleSoft on February 10, 2004(20)
	(a)(81)	Press release issued by U.S. Department of Justice on February 26, 2004(20)
	(a)(82)	Press release issued by PeopleSoft on February 26, 2004(20)
	(a)(83)	Order entered by the Superior Court of California, County of Alameda, overruling Defendants’ Demurrer to Plaintiffs’ Second Amended Complaint(20)
	(a)(84)	Order entered by the Superior Court of California, County of Alameda, denying Defendants’ Motion to Strike Portions of Plaintiffs’ Second Amended Complaint(20)
	(a)(85)	Letter to stockholders dated March 3, 2004(20)
	(a)(86)	OneVoice e-mail newsletter sent to PeopleSoft employees on March 4, 2004(21)
	(a)(87)	OneVoice e-mail newsletter sent to PeopleSoft employees on March 9, 2004(21)
	(a)(88)	OneVoice e-mail newsletter sent to PeopleSoft employees on March 12, 2004(21)
	(a)(89)	Press release issued by PeopleSoft on March 12, 2004(21)
	(a)(90)	Press release issued by PeopleSoft on March 12, 2004(21)
	(a)(91)	Press release issued by PeopleSoft on March 19, 2004(22)
	(a)(92)	Presentation given at PeopleSoft’s 2004 Annual Meeting of Stockholders(22)
	(a)(93)	Transcript of PeopleSoft’s 2004 Annual Meeting of Stockholders(22)
	(a)(94)	Press release issued by PeopleSoft on March 25, 2004(22)
	(a)(95)	Transcript of conference call held by PeopleSoft on January 29, 2004 (incorporated by reference to Exhibit 99.2 to PeopleSoft’s February 4, 2004 Form 8-K)(22)


Exhibit No.		Document

	(a)(96)	Redacted version of the Cross-complaint filed by Oracle in the Superior Court of the State of California, County of Alameda(23)
	(a)(97)	Press release issued by the Michigan Attorney General’s Office on April 7, 2004(23)
	(a)(98)	Press release issued by the Ohio Attorney General’s Office on April 9, 2004(23)
	(a)(99)	Excerpts from transcript of conference call held by PeopleSoft on April 22, 2004(24)
	(a)(100)	Press release issued by PeopleSoft on May 14, 2004(25)
	(a)(101)	Excerpts from transcript of PeopleSoft’s 2004 Leadership Summit News Conference held on May 18, 2004(25)
	(a)(102)	Press release issued by PeopleSoft on May 26, 2004(26)
	(a)(103)	Press release issued by PeopleSoft on May 26, 2004(26)
	(a)(104)	Redacted version of the Amended Complaint for Declaratory and Injunctive Relief filed by Oracle and Pepper Acquisition Corp. in the Delaware Court of Chancery(31)
	(a)(105)	E-mail sent to PeopleSoft employees on July 2, 2004(32)
	(a)(106)	Press release issued by PeopleSoft on July 7, 2004(33)
	(a)(107)	Transcript of conference call held by PeopleSoft on July 27, 2004 (incorporated by reference to Exhibit 99.1 to PeopleSoft’s August 2, 2004 Form 8-K)(34)
	(a)(108)	Excerpts from transcript of the Adams Harkness Annual Summer Seminar held on August 4, 2004(34)
	(a)(109)	Press release issued by PeopleSoft on September 9, 2004(35)
	(a)(110)	Letter sent to PeopleSoft employees on September 9, 2004(35)
	(a)(111)	Letter sent to PeopleSoft customers on September 9, 2004(36)
	(a)(112)	Letter sent to PeopleSoft prospective clients on September 10, 2004(36)
	(a)(113)	Excerpts from transcript of Connect 2004 keynote address(37)
	(a)(114)	Excerpts from transcript of Connect 2004 media and analyst news conference(37)
	(a)(115)	Press release issued by PeopleSoft on October 1, 2004(37)
	(a)(116)	Press release issued by PeopleSoft on September 23, 2004(37)
	(a)(117)	Press release issued by PeopleSoft on October 1, 2004(37)
	(a)(118)	E-mail sent to PeopleSoft employees on October 18, 2004(41)
	(a)(119)	Excerpts from transcript of conference call held by PeopleSoft on October 21, 2004(41)
	(a)(120)	Press release issued by PeopleSoft on October 26, 2004(41)
	(a)(121)	Press release issued by PeopleSoft on November 1, 2004(42)
	(a)(122)	Press release issued by PeopleSoft on November 10, 2004(43)
	(a)(123)	Transcript of conference call held by PeopleSoft on November 10, 2004(43)
	(a)(124)	Letter sent to PeopleSoft employees on November 10, 2004(43)
	(a)(125)	Letter sent to PeopleSoft customers on November 10, 2004(43)
	(a)(126)	Press release issued by PeopleSoft on November 11, 2004(43)
	(a)(127)	Investor presentation materials(43)
	(a)(128)	Investor presentation materials(44)
	(a)(129)	E-mail sent to PeopleSoft employees on November 15, 2004(44)
	(a)(130)	Press release issued by PeopleSoft on November 16, 2004(44)
	(a)(131)	Letter sent to Larry Ellison, Chief Executive Officer of Oracle Corporation, on November 18, 2004(45)
	(a)(132)	E-mail sent to PeopleSoft employees on November 17, 2004(46)
	(a)(133)	Press release issued by PeopleSoft on November 20, 2004(47)
	(a)(134)	Press release issued by PeopleSoft on November 20, 2004(47)
	(a)(135)	Letter sent to PeopleSoft employees on November 20, 2004(47)
	(a)(136)	Letter sent to PeopleSoft customers on November 20, 2004(47)


Exhibit No.		Document

	(a)(137)	Press release issued by PeopleSoft on November 24, 2004(48)
	(a)(138)	Letter sent to PeopleSoft employees on November 24, 2004(48)
	(a)(139)	Press release issued by PeopleSoft on December 10, 2004(49)
	(a)(140)	Investor presentation materials (also previously filed under cover of Schedule 14A by PeopleSoft on December 7, 2004)(49)
	(a)(141)	Press release issued by PeopleSoft on December 13, 2004 (incorporated by reference to exhibit 99.1 to PeopleSoft’s Current Report on Form 8-K, filed with the SEC December 13, 2004)
	(a)(142)	Joint letter from Oracle Corporation and PeopleSoft to PeopleSoft stockholders dated December 15, 2004
	(a)(143)	Opinion of Citigroup Global Markets Inc. dated December 12, 2004
	(a)(144)	Opinion of Goldman, Sachs & Co. dated December 12, 2004
	(e)(1)	Excerpts from PeopleSoft’s Definitive Proxy Statement dated April 28, 2003 relating to the 2003 Annual Meeting of Stockholders(1)
	(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)(1)
	(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)(1)
	(e)(4)	Executive Severance Policy — Executive Vice Presidents, effective as of January 1, 2003(8)
	(e)(5)	Executive Severance Policy — Senior Vice Presidents, effective as of January 1, 2003(8)
	(e)(6)	Terms of Customer Assurance Program (revised)(10)
	(e)(6)(i)	Terms of Customer Assurance Program (replacement version) +(11)
	(e)(7)	Form of letter sent to customers(11)
	(e)(8)	Terms of Customer Assurance Program(11)
	(e)(9)	Amendment No. 1 to the Bylaws of PeopleSoft (11)
	(e)(10)	Terms of Customer Assurance Program (extension term) (12)
	(e)(11)	Employment Agreement, dated January 30, 2004, by and between Craig Conway and PeopleSoft, Inc. (17)
	(e)(12)	Excerpts from PeopleSoft’s Definitive Proxy Statement dated February 20, 2004 relating to the 2004 Annual Meeting of Stockholders (22)
	(e)(13)	Memorandum of understanding regarding settlement of stockholder class actions(26)
	(e)(14)	Amendment to memorandum of understanding regarding settlement of stockholder class actions(27)
	(e)(15)	White paper dated February 1, 2004(28)
	(e)(16)	June 15, 2004 weblog postings(28)
	(e)(17)	Second amendment to memorandum of understanding regarding settlement of stockholder class actions(28)
	(e)(18)	Amended Executive Severance Policy — Executive Vice Presidents, amended as of June 14, 2004(29)
	(e)(19)	Amended Executive Severance Policy — Senior Vice Presidents, amended as of June 14, 2004(29)
	(e)(20)	June 16 and 17, 2004 weblog postings(29)
	(e)(21)	Stipulation and Agreement of Compromise, Settlement and Release dated June 17, 2004(29)
	(e)(22)	June 20, 21 and 23, 2004 weblog postings(30)
	(e)(23)	June 26, 28 and 30, and July 1, 2004 weblog postings(31)
	(e)(23)(a)	Chart referred to in the ‘The Government Rests‘ weblog posting(31)


Exhibit No.		Document

	(e)(24)	July 2, 2004 weblog postings(32)
	(e)(25)	Terms of Amended Customer Assurance Program approved July 6, 2004(32)
	(e)(26)	July 20, and August 4, 2004 weblog postings(34)
	(e)(27)	Addendum to Employment Contract between Guy Dubois and PeopleSoft France S.A. (incorporated by reference to Exhibit 10.8 filed with PeopleSoft’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004)(34)
	(e)(28)	Terms of Amended Customer Assurance Program approved October 11, 2004(38)
	(e)(28)(a)	Terms of Amended Customer Assurance Program approved October 11, 2004 (corrected)(39)
	(e)(29)	Separation Agreement and General Release, dated October 12, 2004, by and between Ram Gupta and PeopleSoft, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by PeopleSoft, Inc. on October 18, 2004)(40)
	(e)(30)	Retention Agreement, entered into on October 18, 2004, by and between Guy Dubois and PeopleSoft, Inc. (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by PeopleSoft, Inc. on October 18, 2004)(40)
	(e)(31)	Separation Agreement, dated October 18, 2004, by and between Craig Conway and PeopleSoft, Inc. (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by PeopleSoft, Inc. on October 18, 2004)(40)
	(e)(32)	Amended Executive Severance Policy — Presidents, Co-Presidents and Executive Vice Presidents, amended as of October 1, 2004 (incorporated by reference to Exhibit 10.8 to PeopleSoft’s Quarter Report on Form 10-Q for the Quarterly Period Ended September 30, 2004, filed with the SEC November 9, 2004)(43)
	(e)(33)	Amended Executive Severance Policy — Senior Vice Presidents, amended as of September 15, 2004 (incorporated by reference to Exhibit 10.9 to PeopleSoft’s Quarter Report on Form 10-Q for the Quarterly Period Ended September 30, 2004, filed with the SEC November 9, 2004)(43)
	(e)(34)	Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule 14f-1 promulgated thereunder
	(e)(35)	Agreement and Plan of Merger dated as of December 12, 2004 among PeopleSoft, Oracle Corporation and Pepper Acquisition Corp.
	(e)(36)	Consulting Agreement dated as of December 6, 2004 by and between PeopleSoft and Aneel Bhusri
	(e)(37)	Confidentiality Agreement dated December 11, 2004, by and between PeopleSoft and Oracle Corporation

(1) Previously filed as an exhibit to PeopleSoft’s Schedule 14D-9 filed with the SEC June 12, 2003.

(2) Previously filed as an exhibit to PeopleSoft’s Amendment No. 1 to Schedule 14D-9 filed with the SEC June 13, 2003.

(3) Previously filed as an exhibit to PeopleSoft’s Amendment No. 2 to Schedule 14D-9 filed with the SEC June 17, 2003.

(4) Previously filed as an exhibit to PeopleSoft’s Amendment No. 3 to Schedule 14D-9 filed with the SEC June 20, 2003.

(5) Previously filed as an exhibit to PeopleSoft’s Amendment No. 4 to Schedule 14D-9 filed with the SEC July 3, 2003.

(6) Previously filed as an exhibit to PeopleSoft’s Amendment No. 5 to Schedule 14D-9 filed with the SEC July 25, 2003.

(7) Previously filed as an exhibit to PeopleSoft’s Amendment No. 6 to Schedule 14D-9 filed with the SEC August 14, 2003.

(8) Previously filed as an exhibit to PeopleSoft’s Amendment No. 7 to Schedule 14D-9 filed with the SEC August 22, 2003.

(9) Previously filed as an exhibit to PeopleSoft’s Amendment No. 8 to Schedule 14D-9 filed with the SEC September 11, 2003.

(10) Previously filed as an exhibit to PeopleSoft’s Amendment No. 9 to Schedule 14D-9 filed with the SEC October 27, 2003.

† This exhibit replaces and supersedes exhibit (e)(6), which previously was filed in error.

(11) Previously filed as an exhibit to PeopleSoft’s Amendment No. 11 to Schedule 14D-9 filed with the SEC November 17, 2003.

(12) Previously filed as an exhibit to PeopleSoft’s Amendment No. 12 to Schedule 14D-9 filed with the SEC November 19, 2003.

(13) Previously filed as an exhibit to PeopleSoft’s Amendment No. 13 to Schedule 14D-9 filed with the SEC December 5, 2003.

(14) Previously filed as an exhibit to PeopleSoft’s Amendment No. 14 to Schedule 14D-9 filed with the SEC December 15, 2003.

(15) Previously filed as an exhibit to PeopleSoft’s Amendment No. 15 to Schedule 14D-9 filed with the SEC December 19, 2003.

(16) Previously filed as an exhibit to PeopleSoft’s Amendment No. 16 to Schedule 14D-9 filed with the SEC January 13, 2004.

(17) Previously filed as an exhibit to PeopleSoft’s Amendment No. 17 to Schedule 14D-9 filed with the SEC February 3, 2004.

(18) Previously filed as an exhibit to PeopleSoft’s Amendment No. 18 to Schedule 14D-9 filed with the SEC February 4, 2004.

(19) Previously filed as an exhibit to PeopleSoft’s Amendment No. 19 to Schedule 14D-9 filed with the SEC February 9, 2004.

(20) Previously filed as an exhibit to PeopleSoft’s Amendment No. 20 to Schedule 14D-9 filed with the SEC March 4, 2004.

(21) Previously filed as an exhibit to PeopleSoft’s Amendment No. 21 to Schedule 14D-9 filed with the SEC March 15, 2004.

(22) Previously filed as an exhibit to PeopleSoft’s Amendment No. 22 to Schedule 14D-9 filed with the SEC March 29, 2004.

(23) Previously filed as an exhibit to PeopleSoft’s Amendment No. 23 to Schedule 14D-9 filed with the SEC April 13, 2004.

EX-99.(A)(142) 2 f03438a7exv99wxayx142y.htm EXHIBIT (A)(142) exv99wxayx142y

Exhibit (a)(142)

Dear PeopleSoft stockholder:

We are pleased to inform you that Oracle and PeopleSoft have agreed to merge in a transaction valued at $10.3 billion. The Board of Directors of PeopleSoft, based upon the recommendation of its Transaction Committee composed of independent directors, has approved a definitive merger agreement dated December 12, 2004.

Pursuant to the merger agreement, Oracle has amended its cash tender offer as set forth in the enclosed amended and restated offer to purchase, and will now pay $26.50 in cash for all PeopleSoft shares validly tendered, including all shares already tendered to Oracle’s Depositary.

For Oracle, this merger marks a significant turning point in the evolution of the software industry. It will combine in one company what we think is the best and brightest talent in the enterprise software industry, and will enable the combined company to accelerate investments in innovation. Both companies’ customers will benefit from enhanced products and excellent support.

Stockholders are encouraged to act promptly, as the offer will expire at Midnight, New York City time, on Tuesday, December 28, 2004, unless extended. Completion of the tender offer and the merger is subject to at least a majority of the fully diluted outstanding shares of PeopleSoft being validly tendered into the offer and to a limited number of other customary conditions.

We urge you to read the enclosed materials carefully. If you have any questions regarding the offer or the merger or how to tender your shares, please contact MacKenzie Partners, Inc., Oracle’s information agent, toll-free at 800-322-2885 or 212-929-5500 (call collect).


Chief Executive Officer of Oracle		Co-President and Chief Financial Officer of PeopleSoft

EX-99.(A)(143) 3 f03438a7exv99wxayx143y.htm EXHIBIT (A)(143) exv99wxayx143y

Exhibit (a)(143)

[LETTERHEAD OF CITIGROUP GLOBAL MARKETS INC.]

December 12, 2004

The Board of Directors
PeopleSoft, Inc.
4460 Hacienda Drive
Pleasanton, California 94588

Members of the Board:

You have requested our opinion as to the fairness, from a financial point of view, to the holders of the common stock of PeopleSoft, Inc. (“PeopleSoft”), other than Oracle Corporation (“Oracle”), Pepper Acquisition Corp., a wholly owned subsidiary of Oracle (“Merger Sub”), and their respective affiliates, of the Cash Consideration (as defined below) provided for in the Agreement and Plan of Merger, dated as of December 12, 2004 (the “Agreement”), among PeopleSoft, Oracle and Merger Sub. As more fully described in the Merger Agreement, (i) Oracle will cause Merger Sub to offer to purchase all of the outstanding shares of the common stock, par value $0.01 per share, of PeopleSoft (“PeopleSoft Common Stock”) at a price of $26.50 per share, net to the seller in cash (the “Cash Consideration” and, such offer, the “Offer”), and (ii) subsequent to the Offer, Merger Sub will be merged with and into PeopleSoft (the “Merger” and, together with the Offer, the “Transaction”) and each outstanding share of PeopleSoft Common Stock not previously tendered in the Offer will be converted into the right to receive the Cash Consideration.

In arriving at our opinion, we reviewed the Agreement and held discussions with certain senior officers, directors and other representatives and advisors of PeopleSoft concerning the business, operations and prospects of PeopleSoft. We examined certain publicly available business and financial information relating to PeopleSoft, including publicly available financial forecasts relating to PeopleSoft which were discussed with us by the management of PeopleSoft, as well as certain financial forecasts and other information and data relating to PeopleSoft which were provided to or otherwise discussed with us by the management of PeopleSoft. We reviewed the financial terms of the Transaction as set forth in the Agreement in relation to, among other things: the current and historical market prices and trading volumes of PeopleSoft Common Stock; the historical and projected earnings and other operating data of PeopleSoft; and the financial condition and capitalization of PeopleSoft. We considered, to the extent publicly available, the financial terms of certain other transactions effected which we considered relevant in evaluating the Transaction and analyzed certain financial, stock market and other publicly available information relating to the businesses of other companies whose operations we considered relevant in evaluating those of PeopleSoft. In connection with our engagement and at the direction of PeopleSoft, we were requested to approach, and we held discussions with, selected third parties to solicit indications of interest in the possible acquisition of PeopleSoft. In addition to the foregoing, we conducted such other analyses and examinations and considered such other information and financial, economic and market criteria as we deemed appropriate in arriving at our opinion.

In rendering our opinion, we have assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with us and upon the assurances of the management of PeopleSoft that no relevant information has been omitted or remains undisclosed to us. With respect to financial forecasts and other information and data relating to PeopleSoft provided to or otherwise discussed with us, we have been advised by the management of PeopleSoft that such forecasts and other information and data were prepared on bases reflecting reasonable estimates and judgments as to the future financial performance of PeopleSoft. We have assumed, with your consent, that the Transaction will be consummated in accordance

The Board of Directors
PeopleSoft, Inc.
December 12, 2004
Page 2

with its terms without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary regulatory or third party approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on PeopleSoft or the Transaction. We have not made or been provided with an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of PeopleSoft nor have we made any physical inspection of the properties or assets of PeopleSoft. Our opinion does not address the relative merits of the Transaction as compared to any alternative business strategies that might exist for PeopleSoft or the effect of any other transaction in which PeopleSoft might engage. Our opinion is necessarily based upon information available to us, and financial, stock market and other conditions and circumstances existing and disclosed to us, as of the date hereof.

Citigroup Global Markets Inc. has acted as financial advisor to PeopleSoft in connection with the proposed Transaction and will receive a fee for such services, a significant portion of which is contingent upon the consummation of the Transaction. We and our affiliates in the past have provided services to PeopleSoft unrelated to the proposed Transaction, for which services we and our affiliates have received compensation. In the ordinary course of our business, we and our affiliates may actively trade or hold the securities of PeopleSoft and Oracle for our own account or for the account of our customers and, accordingly, may at any time hold a long or short position in such securities. In addition, we and our affiliates (including Citigroup Inc. and its affiliates) may maintain relationships with PeopleSoft, Oracle and their respective affiliates.

Our advisory services and the opinion expressed herein are provided for the information of the Board of Directors of PeopleSoft in its evaluation of the Transaction, and our opinion is not intended to be and does not constitute a recommendation to any stockholder as to whether such stockholder should tender shares of PeopleSoft Common Stock pursuant to the Offer or as to any other actions to be taken by such stockholder in connection with the Transaction.

Based upon and subject to the foregoing, our experience as investment bankers, our work as described above and other factors we deemed relevant, we are of the opinion that, as of the date hereof, the Cash Consideration to be received in the Transaction by the holders of PeopleSoft Common Stock (other than Oracle, Merger Sub and their respective affiliates) is fair, from a financial point of view, to such holders.

Very truly yours,

/s/ CITIGROUP GLOBAL MARKETS INC.

CITIGROUP GLOBAL MARKETS INC.

EX-99.(A)(144) 4 f03438a7exv99wxayx144y.htm EXHIBIT (A)(144) exv99wxayx144y

Exhibit (a)(144)

[LETTERHEAD OF GOLDMAN, SACHS & CO.]

PERSONAL AND CONFIDENTIAL

December 12, 2004

Board of Directors
PeopleSoft, Inc.
4460 Hacienda Drive
Pleasanton, CA 94588

Gentlemen:

You have requested our opinion as to the fairness from a financial point of view to the holders of the outstanding shares of common stock, par value $0.01 per share (the “Shares”), of PeopleSoft, Inc. (the “Company”) of the $26.50 per Share in cash proposed to be received by holders of Shares in the Tender Offer and the Merger (as defined below) pursuant to the Agreement and Plan of Merger, dated as of December 12, 2004 (the “Agreement”), among Oracle Corporation (“Oracle”), Pepper Acquisition Corp. (“Acquisition Sub”) and the Company. The Agreement provides for a tender offer for all of the Shares (the “Tender Offer”) pursuant to which Acquisition Sub will pay $26.50 per Share in cash for each Share accepted. The Agreement further provides that, following completion of the Tender Offer, Acquisition Sub will be merged with and into the Company (the “Merger”) and each outstanding Share (other than Shares already owned by Acquisition Sub) will be converted into the right to receive $26.50 in cash.

Goldman, Sachs & Co. and its affiliates, as part of their investment banking business, are continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions as well as for estate, corporate and other purposes. We have acted as financial advisor to the Company in connection with, and have participated in certain of the negotiations leading to, the transaction contemplated by the Agreement (the “Transaction”). We expect to receive fees for our services in connection with the Transaction, the principal portion of which are contingent upon consummation of the Transaction, and the Company has agreed to reimburse our expenses and indemnify us against certain liabilities arising out of our engagement. In addition, we have provided certain investment banking services to the

Board of Directors
PeopleSoft, Inc.
December 12, 2004
Page Two

Company from time to time, including having acted as financial advisor in the acquisition of J.D. Edwards which closed on July 18, 2003. We have provided certain investment banking services to Oracle from time to time, including having transacted in foreign currency exchanges on behalf of Oracle in July 2004. We also may provide investment banking services to the Company and Oracle in the future. In connection with the above-described investment banking services we have received, and may receive, compensation.

Goldman, Sachs & Co. is a full service securities firm engaged, either directly or through its affiliates, in securities trading, investment management, financial planning and benefits counseling, risk management, hedging, financing and brokerage activities for both companies and individuals. In the ordinary course of these activities, Goldman, Sachs & Co. and its affiliates may provide such services to the Company, Oracle and their respective affiliates, may actively trade the debt and equity securities (or related derivative securities) of the Company and Oracle for their own account and for the accounts of their customers and may at any time hold long and short positions of such securities.

In connection with this opinion, we have reviewed, among other things, the Agreement; annual reports to stockholders and Annual Reports on Form 10-K of the Company for the five fiscal years ended December 31, 2003; certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company; certain other communications from the Company to its respective stockholders; and certain internal financial analyses and forecasts for the Company prepared by its management. We also have held discussions with members of the senior management of the Company regarding their assessment of the past and current business operations, financial condition and future prospects of the Company. In addition, we have reviewed the reported price and trading activity for the Shares, compared certain financial and stock market information for the Company with similar information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the software industry specifically and in other industries generally and performed such other studies and analyses, and considered such other factors, as we considered appropriate.

We have relied upon the accuracy and completeness of all of the financial, accounting, legal, tax and other information discussed with or reviewed by us and have assumed such accuracy and completeness for purposes of rendering this opinion. In addition, we have not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of the Company or any of subsidiaries and we have not been furnished with any such evaluation or appraisal. Our opinion does not address the underlying business decision of the Company to engage in the Transaction. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Board of Directors of the Company in connection with its consideration of the Transaction and such opinion does not constitute a recommendation as to whether or not any holder of Shares should tender such Shares in connection with the Tender Offer or how any holder of Shares should vote with respect to the Merger.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the $26.50 in cash to be received by the holders of Shares in the Tender Offer and the Merger is fair from a financial point of view to such holders.

Very truly yours,

/s/ Goldman, Sachs & Co.

(GOLDMAN, SACHS & CO.)

EX-99.(E)(34) 5 f03438a7exv99wxeyx34y.htm EXHIBIT (E)(34) exv99wxeyx34y

EXHIBIT (e)(34)

PEOPLESOFT, INC.

4460 Hacienda Drive

Pleasanton, CA 94588

INFORMATION STATEMENT PURSUANT TO SECTION 14(f)

OF THE SECURITIES EXCHANGE ACT OF 1934

AND RULE 14f-1 THEREUNDER

This Information Statement is being mailed on or about December 16, 2004 with Amendment No. 51 to the Solicitation/ Recommendation Statement on Schedule 14D-9 (as amended, the “Schedule 14D-9”) of PeopleSoft, Inc. (the “Company” or “PeopleSoft”). You are receiving this Information Statement in connection with the possible election of persons designated by Oracle Corporation (“Oracle”) to a majority of the seats on the Board of Directors of the Company (the “Board”). You are urged to read this Information Statement carefully. You are not, however, required to take any action. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Schedule 14D-9.

Pepper Acquisition Corp., a wholly-owned subsidiary of Oracle (“Merger Subsidiary”), is offering to purchase any and all of the outstanding shares of Common Stock, par value $0.01 per share, of the Company (the “Company Common Stock”), together with the associated preferred stock purchase rights, at a purchase price of $26.50 per share (the “Revised Offer”). The Revised Offer is scheduled to expire at 12:00 midnight, New York City time, on December 28, 2004. The Revised Offer is made upon the terms and subject to the conditions set forth in Oracle and Merger Subsidiary’s Amended and Restated Offer to Purchase, dated December 15, 2004, in the related Amended and Restated Letter of Transmittal, and in any supplements or amendments thereto (the “Offer Documents”). The Offer Documents have been filed by Oracle and Merger Subsidiary under Schedule TO with the Securities and Exchange Commission, and are being sent to the Company’s stockholders together with this Information Statement. Pursuant to the Agreement and Plan of Merger, dated as of December 12, 2004, among Oracle, Merger Subsidiary and the Company (the “Merger Agreement”), at the expiration of the Revised Offer, upon the terms and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, it is contemplated that Merger Subsidiary will purchase all of the Company Common Stock validly tendered pursuant to the Revised Offer and not withdrawn. The consummation of the Revised Offer pursuant to the terms of the Merger Agreement would result in a change of control of the Company. Following the consummation of the Revised Offer and subject to the other conditions contained in the Merger Agreement, including, if required by Delaware law, obtaining the necessary vote of the Company’s stockholders in favor of the Merger Agreement, Merger Subsidiary will be merged with and into the Company (the “Merger”) and each outstanding share of Company Common Stock not tendered into the Revised Offer (other than shares held by the Company, Oracle or its subsidiaries or stockholders who properly perfect appraisal rights under Delaware law) will be converted into the right to receive $26.50 in cash, or any higher price paid in the Revised Offer, without interest. Following the consummation of the Merger, the Company will continue as the surviving corporation.

The information contained in this Information Statement concerning Oracle, Merger Subsidiary and the Oracle Designees (as defined below) has been furnished to the Company by Oracle and Merger Subsidiary, and the Company assumes no responsibility for the accuracy or completeness of such information.

BOARD OF DIRECTORS

General

The Company Common Stock is the only class of voting stock of the Company outstanding, and the holders of the Common Stock are entitled to one vote per share. As of November 30, 2004, there were 375,494,375 shares of Company Common Stock issued and outstanding. The Board currently consists of seven members, and there are currently no vacancies; the size and composition of the Board are subject to certain contractual commitments set forth in the Merger Agreement and described below. The Company’s Board of Directors is divided into four Class I directors and three Class II directors serving staggered two-year terms.

The term of the four Class I directors expires at the Company’s annual meeting of stockholders in 2005 and the term of the three Class II directors expires at the Company’s annual meeting of stockholders in 2006.

Right to Designate Directors

The Merger Agreement provides that, effective upon the acceptance for payment of any shares of Company Common Stock by Merger Subsidiary pursuant to the Revised Offer, Oracle shall be entitled to designate, subject to Section 14(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the number of directors, rounded up to the next whole number, on the Board (the “Oracle Designees”) that equals the product of (a) the total number of directors on the Board (after giving effect to directors elected pursuant to this sentence) and by (b) the percentage that the number of shares of Company Common Stock beneficially owned by Oracle or Merger Subsidiary (including shares of Company Common Stock accepted for payment) bears to (ii) the total number of such shares outstanding. The Company shall take all action necessary to cause the Oracle Designees to be elected or appointed to the Board, including increasing the number of directors and seeking and accepting resignations of its current directors. In addition, at such time as the Oracle Designees constitute a majority of the Board (the “Control Date”), the Company shall also use its best efforts to cause individuals designated by Oracle to constitute the number of directors, rounded up to the next whole number, on (i) each committee of the Board other than the Transaction Committee and (ii) each board of directors of each subsidiary of the Company (and each committee thereof) that represents the same percentage as such individuals represent on the Board.

Following the election or appointment of the Oracle Designees and until the consummation of the Merger, the approval of a majority of the directors of the Company then in office who were not Oracle Designees will be required to authorize (and such authorization shall constitute the authorization of the Board and no other action on the part of the Company, including any action by any other director of the Company, will be required to authorize) any termination of the Merger Agreement by the Company, any amendment of the Merger Agreement, any extension of time for performance of any obligation or action under the Merger Agreement by Oracle or Merger Subsidiary and any waiver of compliance with any of the agreements or conditions contained in the Merger Agreement for the benefit of the Company.

The Oracle Designees

Oracle has informed the Company that the Oracle Designees will be selected by Oracle from among any of the directors and executive officers of Oracle set forth below. The following table sets forth certain information with respect to individuals Oracle may designate as the Oracle Designees (including age as of the date hereof, current principal occupation or employment and five-year employment history). Unless otherwise indicated below, each occupation set forth opposite each person relates to employment with Oracle. The business address of each person is c/o Oracle at 500 Oracle Parkway, Redwood City, California 94065, their telephone number at that address is (650) 506-7000 and each such person is a citizen of the United States.


			Present Principal Occupation or Employment;
Name	Age		Material Positions Held During the Past Five Years

Daniel Cooperman		54	Mr. Cooperman has been Senior Vice President, General Counsel and Secretary since February 1997. Prior to joining Parent, Mr. Cooperman had been associated with the law firm of McCutchen, Doyle, Brown & Enersen (which has since become Bingham McCutchen LLP) from October 1977 and had served as a partner since June 1983. From September 1995 until February 1997, Mr. Cooperman was Chair of the law firm’s Business and Transactions Group and from April 1989 through September 1995, he served as Managing Partner of the law firm’s San Jose office.
Charles E. Phillips, Jr.		45	Mr. Phillips has been a President since January 2004 and has been a director since January 2004. Mr. Phillips was Executive Vice President, Strategy, Partnerships, Business Development from May 2003 to January 2004. Prior to joining Parent, Mr. Phillips was with Morgan Stanley & Co, Incorporated, where he was a Managing Director from November 1995 to May 2003 and a Principal from December 1994 to November 1995. From 1986 to 1994, Mr. Phillips worked at various investment banking firms on Wall Street. Prior to that, Mr. Phillips served as a Captain in the United States Marine Corps as an information technology officer. Mr. Phillips also serves as a director of Viacom Inc. and 51job, Inc.
Harry L. You		45	Mr. You has been Executive Vice President and Chief Financial Officer since July 2004. Prior to joining Parent, Mr. You was Chief Financial Officer of Accenture Ltd, a global management consulting, technology services and outsourcing company, from June 2001 to July 2004. Prior to Accenture, Mr. You was with Morgan Stanley & Co., Incorporated, a global investment bank, where he was a Managing Director from December 2000 to June 2001 and a Principal from March 1996 to December 2000.

Oracle has informed the Company that each of the individuals listed above has consented to act as a director, if so designated. If necessary, Oracle may choose additional or other Oracle Designees, subject to the requirements of Rule 14f-1 of the Exchange Act.

None of the Oracle Designees is currently a director of, or holds any position with, the Company. Oracle and Merger Subsidiary have advised the Company that none of the Oracle Designees or any of his or her affiliates (i) has a familial relationship with any directors or executive officers of the Company, or (ii) has been involved in any transactions with the Company or any of its directors, officers, or affiliates which are required to be disclosed pursuant to the rules and regulations of the Securities and Exchange Commission, except as may be disclosed herein.

Oracle and Merger Subsidiary have advised the Company that none of the Oracle Designees during the past five years, has (i) been party to federal bankruptcy law or state insolvency law proceedings, whereby a petition was filed by or against such designee or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such designee, (ii) been convicted in a criminal proceeding (excluding traffic misdemeanors) or (iii) been a party to any judicial or administrative proceeding that resulted in a judgment, decree or final order with respect to engaging in any type of business practice or enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws or federal commodities laws, or a finding of any violation of federal or state securities laws.

Current Board of Directors

To the extent the Board will consist of persons who are not Oracle Designees, the Board is expected to continue to consist of those persons who are currently directors of the Company who do not resign.

The names of the current members of the Board and certain information about them are set forth below:


							Expiration
					Director		of Term
Name of Nominee	Age		Position(s) with the Company		Since		of Office

Class I Directors
David A. Duffield		64		CEO and Chairman of the Board		1987		2005
Aneel Bhusri		38	Vice Chairman of the Board and Consultant			1999		2005
Steven D. Goldby(1)(2)(3)(4)		64		Director		2000		2005
Michael J. Maples(3)(4)		62		Director		2003		2005

Class II Directors
A. George “Skip” Battle(1)(2)(3)		60		Director		1995		2006
Frank J. Fanzilli, Jr.(1)(3)(4)		48		Director		2001		2006
Cyril J. Yansouni(1)(2)(3)		62		Director		1992		2006

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

(3) Member of the Transaction Committee.

(4) Member of the Corporate Governance/ Nominating Committee.

David A. Duffield is a founder of PeopleSoft and is the Chief Executive Officer and Chairman of the Board. He has served as Chairman of the Board since PeopleSoft’s incorporation in 1987. He has been the Chief Executive Officer since October 2004 and also previously served as Chief Executive Officer from August 1987 through September 1999 and as President from August 1987 through May 1999. Prior to founding PeopleSoft, he was a founder and Chairman of the Board of Integral, a supplier of human resource and financial applications software, from 1972 through 1987. Mr. Duffield also served as Integral’s Chief Executive Officer. Mr. Duffield was the co-founder of Information Associates (now a subsidiary of Systems and Computer Technology). He holds a B.S. degree in electrical engineering and an M.B.A. degree from Cornell University.

A. George “Skip” Battle became a director of PeopleSoft in December 1995. Mr. Battle has served on the Board of Directors of Ask Jeeves, Inc., a publicly-traded internet search engine company, since December 2000, currently serving as Executive Chairman. He served as its Chief Executive Officer from December 2000 through December 2003. He is currently a Senior Fellow at the Aspen Institute, an international research firm. From 1968 until his retirement in June 1995, Mr. Battle served in various roles of increasing responsibility with Andersen Consulting. At the time of his retirement, Mr. Battle was Managing Partner of Market Development and was serving as a member of Andersen Consulting’s Executive Committee, Global Management Council and Partner Income Committee. Mr. Battle holds a B.A. degree in economics with highest distinction from Dartmouth College and an M.B.A. degree from the Stanford Business School where he held McCarthy and University Fellowships. Mr. Battle is also the Chairman of the Board of Directors of Fair Isaac Corporation and a director of the following mutual funds: Masters’ Select Equity, Masters’ Select Value, Masters’ Select Smaller Companies and Masters’ Select International.

Aneel Bhusri has been a director of PeopleSoft since March 1999 and has served as Vice Chairman of the Board and as a consultant to PeopleSoft since October 2004. He also is currently a General Partner with Greylock Partners, an early stage venture capital firm with offices in San Mateo, California and Waltham, Massachusetts. Aneel served in a variety of management positions at PeopleSoft from August 1993 through December 2002, including Senior Vice President, Product Strategy, Marketing and Business Development.

Prior to joining PeopleSoft, Mr. Bhusri served as an associate at Norwest Venture Partners and spent several years in Morgan Stanley’s corporate finance organization working with the firm’s high-tech clients. He holds a B.S. degree in electrical engineering and economics from Brown University and an M.B.A. degree from Stanford University.

Frank J. Fanzilli, Jr., became a director of PeopleSoft in May 2001. Mr. Fanzilli was Managing Director and the Chief Information Officer of Credit Suisse First Boston until his retirement in April 2002. Mr. Fanzilli joined the First Boston Corporation in 1985 as an Analyst in the Information Services Department and held a variety of positions within Information Technology, including Head of European Information Services and Head of Global Application Development. Prior to joining Credit Suisse First Boston, Mr. Fanzilli spent seven years at IBM where he managed systems engineering and software development for Fortune 50 accounts. Mr. Fanzilli received a B.S. degree in management, cum laude, from Fairfield University and an M.B.A. degree in finance, with distinction, from New York University, where he was the Marcos Nadler Scholar. Mr. Fanzilli is also a director of Interwoven, Inc.

Steven D. Goldby was appointed as a director of PeopleSoft in February 2000. Mr. Goldby has served as Chairman and Chief Executive Officer of Symyx Technologies, Inc., a leading company applying combinatorial methods to materials science, since July 1998. Prior to joining Symyx, he served for more than ten years as Chairman of the Board and Chief Executive Officer of MDL Information Systems, Inc., a pharmaceutical software company. Before joining MDL, Mr. Goldby held various management positions, including Senior Vice President, at ALZA Corporation, from 1968 to 1973, and was President of Dynapol, a specialty chemical company, from 1973 to 1981. Mr. Goldby holds a B.S. degree in chemistry from the University of North Carolina and a J.D. degree from Georgetown University Law Center.

Michael J. Maples has served as a Director of PeopleSoft since July 2003 and previously served as Director of J.D. Edwards & Company from January 1997 to July 2003. Mr. Maples held various management positions at Microsoft Corporation from April 1988 to July 1995, the most recent of which was Executive Vice President of the Worldwide Products Group. Mr. Maples also served as a member of the Office of the President at Microsoft. Prior to his time at Microsoft, he served as Director of Software Strategy for International Business Machines Corp. Mr. Maples also serves as a director of Lexmark International, Inc., Motive, Inc., and Mutli-Media Games, Inc. Mr. Maples holds a B.S. in electrical engineering from the University of Oklahoma and an M.B.A. from Oklahoma City University.

Cyril J. Yansouni has been a director of PeopleSoft since 1992. From June 2000 to June 2003, Mr. Yansouni was the Chairman of the Board of Directors of Read-Rite Corporation, a supplier of magnetic recording heads for data storage drives, which sought protection under Chapter 7 of the U.S. Bankruptcy Code in June 2003. From March 1991 to June 2000, Mr. Yansouni also served as the Chief Executive Officer of Read-Rite Corporation. From 1988 to 1991, Mr. Yansouni was with Unisys Corporation, a manufacturer of computer systems, where he served in various senior management capacities, last serving as an Executive Vice President. From 1986 to 1988, Mr. Yansouni was President of Convergent Technologies, a manufacturer of computer systems that was acquired by Unisys Corporation in December 1988. From 1967 to 1986, Mr. Yansouni was employed by Hewlett-Packard Company, where he served in a variety of technical and management positions, last serving as Vice President and General Manager of the Personal Computer Group. Mr. Yansouni received his B.S. degree in electrical and mechanical engineering from the University of Louvain, Belgium and his M.S. degree in electrical engineering from Stanford University. Mr. Yansouni is also a director of Tektronix, Inc. and Solectron Corporation.

Director Independence

A. George (“Skip”) Battle, Frank J. Fanzilli, Jr., Cyril J. Yansouni, Steven D. Goldby and Michael J. Maples are independent directors, as defined in the corporate governance listing requirements applicable to companies whose securities are listed on the Nasdaq National Market (the “Nasdaq listing standards”).

Board Meetings

The Board of PeopleSoft held a total of 25 meetings during 2003. No director attended fewer than 75% of the total number of meetings of the Board and committees of the Board, if any, on which he served during 2003. All the current directors attended the 2004 annual stockholders’ meeting, and all the current directors attended the 2003 annual stockholders’ meeting, with the exception of Michael J. Maples, who was not a PeopleSoft director at that time. The Board has a policy that all directors attend PeopleSoft’s annual stockholder meetings.

Communications with the Board

Stockholders may communicate with the Board by sending an email to BoardofDirectors@peoplesoft.com or by sending a letter to PeopleSoft Board of Directors, c/o the Office of the Corporate Secretary, 4460 Hacienda Drive, Pleasanton, California 94588. The Office of the Corporate Secretary will receive the correspondence and forward it to the Chairman of the Corporate Governance/ Nominating Committee or to any individual director or directors to whom the communication is directed, unless the communication is unduly hostile, threatening, illegal, does not reasonably relate to PeopleSoft or its business, or is similarly inappropriate. The Office of the Corporate Secretary has the authority to discard or disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications.

Board Compensation

Each non-employee director receives an annual retainer of $30,000 plus $5,000 per annum for each committee membership (with an additional $5,000 per annum paid for service as a chairman of a committee). Since June 2003, each non-employee director also has received a payment of $7,500 per month in connection with increased Board activities resulting in part from the Oracle tender offer, and will be paid $1,500 per day when attending or preparing for legal proceedings involving PeopleSoft. Mr. Bhusri, who terminated employment with PeopleSoft in 2002, received in 2003 approximately $621,000 in compensation resulting from the exercise of stock options and a distribution of approximately $2,000 from his 401(k) plan account, both of which related to his former service as an employee. In addition, Mr. Bhusri is entitled to certain payments in consideration of his service as a consultant pursuant to a consulting agreement, as described below under “Certain Business Relationships and Transactions with Management.” Mr. Duffield served as an employee of PeopleSoft working on special projects during 2003 and was paid $12,000 in such capacity. His current salary as Chief Executive Officer is $1.00 and he also receives benefits.

The Board of Directors has the authority to determine stock compensation for non-employee directors. In addition to cash compensation, pursuant to guidelines established by the Board, each non-employee director receives an initial stock option grant upon joining the Board or otherwise becoming eligible (for example at the time an employee director becomes a non-employee director) as well as additional options annually for continued service. The initial option grant is 60,000 shares, which vests over a period of four years. Each non-employee director also receives a quarterly option grant of 6,250 shares, or 25,000 option shares per year. These quarterly grants become fully vested one year after the date of grant. The exercise prices of options granted to non-employee directors are set at the market value of the underlying stock on the date of grant. Since its approval by stockholders in May 2003, options granted to non-employee directors are made under the 2003 Directors Stock Plan. Under the terms of the stock option agreements with the Company’s directors, all unvested stock options will automatically vest upon a change of control, which would include the consummation of the Revised Offer.

Certain Business Relationships and Transactions with Management

During 2003 and 2004, Gary Conway, the brother of former director and CEO Craig Conway, served as Vice President, Corporate Marketing, and received salary and bonuses totaling approximately $376,000 in 2003 and approximately $265,000 in 2004 through September 30. He departed the Company in October 2004 and received payments (prior to income tax withholding) of $150,000 and $50,000, equal to six months salary

and target bonus, and payments for six months’ health coverage under COBRA, pursuant to the terms of the Executive Severance Policy — Group Vice Presidents, for which he was eligible. Also during 2003, Chairman and CEO David A. Duffield’s son and daughter-in-law, Michael D. Duffield and Michelle M. Duffield, were employed by PeopleSoft as an Account Executive and Senior Direct Marketing Specialist, respectively. They received, in the aggregate, salary, commissions and bonuses totaling approximately $677,000 in 2003 and approximately $627,000 in 2004 through September 30.

On September 30, 2004, director Aneel Bhusri was elected Vice Chairman and became a full time consultant to the Company. In these capacities, he is responsible for leading the development of PeopleSoft’s corporate strategy, technology vision and long-term product roadmap and strategy. Mr. Bhusri reports to the Chief Executive Officer of the Company and is responsible for supervising the activities of the Executive Vice President of Products and Technology and the Chief Technology Officer. On December 6, 2004, the Corporate Governance/ Nominating Committee of the Board approved the Company entering into a consulting agreement with Mr. Bhusri, setting forth the basis of this relationship. Pursuant to the agreement, beginning October 1, 2004, the Company has agreed to pay Mr. Bhusri for these services $125,000 per month and will reimburse him for reasonable out of pocket expenses. Such payments are in addition to directors’ fees to which Mr. Bhusri is entitled as a member of the Board. Pursuant to the mutual agreement of Mr. Bhusri and the Company, the consulting agreement will be terminated effective December 31, 2004. Mr. Bhusri remains a General Partner with Greylock Partners. Portfolio companies of Greylock Partners paid license and services fees to the Company of approximately $322,000 from January 1, 2004 through September 30, 2004.

CORPORATE GOVERNANCE

In December 2003, the PeopleSoft Board of Directors adopted a Corporate Governance Policy and an updated Code of Business Ethics, both of which are posted, together with the charters for the Audit Committee, Compensation Committee, and Corporate Governance/ Nominating Committee of the Board, on the corporate governance page of our website. The corporate governance page can be accessed under About PeopleSoft — Investor Relations — Corporate Governance on our website at www.peoplesoft.com.

Code of Business Ethics

PeopleSoft’s Code of Business Ethics applies to all directors, officers and employees of PeopleSoft, including the Chief Executive Officer, Chief Financial Officer and Corporate Controller. The three key principles of the Code are to act with integrity, to act legally and to act responsibly with respect to work for PeopleSoft.

Corporate Governance Policy

The PeopleSoft corporate governance policy provides guidelines which govern the qualifications and conduct of the Board. The PeopleSoft corporate governance policy is consistent with the corporate governance requirements of the Sarbanes-Oxley Act of 2002, and the Nasdaq listing standards. The PeopleSoft corporate governance policy addresses:

• the independence and other qualifications of PeopleSoft board members. The corporate governance policy provides that a majority of the directors shall be independent of PeopleSoft and its management;

• the regular meetings of the independent directors;

• how persons are nominated by the Board for election as directors;

• the evaluation of performance of the Board and its committees;

• limitations on Board service;

• the functions of the Board in relation to oversight of PeopleSoft;

• the approval of the selection and compensation of the CEO and other executive officers;

• the organization and basic function of Board committees; and

• the authority to engage outside advisors.

BOARD COMMITTEES AND THEIR FUNCTIONS

The Board has an Audit Committee, a Compensation Committee, a Corporate Governance/ Nominating Committee and a Transaction Committee, each composed solely of independent directors as defined in the Nasdaq listing standards. The charters of the Audit Committee, Compensation Committee, and the Corporate Governance/ Nominating Committee are posted under About PeopleSoft — Investor Relations on PeopleSoft’s website at www.peoplesoft.com.

Audit Committee

The members of the Audit Committee are Messrs. Battle, Fanzilli, Goldby and Yansouni, who is the Chairman of the Committee. The Audit Committee is comprised solely of directors who meet all the independence standards for audit committee members, as set forth in the Sarbanes-Oxley Act of 2002 and the Nasdaq listing standards. The Board has designated Messrs. Battle and Yansouni as “audit committee financial experts” as that term is defined in the SEC rules adopted pursuant to the Sarbanes-Oxley Act. The Audit Committee is responsible for retaining and overseeing PeopleSoft’s independent auditors, approving the services performed by them and for reviewing PeopleSoft’s financial reporting process, accounting principles and its system of internal accounting controls. The Audit Committee also provides oversight of the internal audit function. The Audit Committee operates under the amended written charter adopted by the Board on January 28, 2004. The Audit Committee held 14 meetings in 2003. See the “Report of the Audit Committee” below.

Compensation Committee

The Compensation Committee currently consists of Messrs. Goldby, Yansouni and Battle, who is the Chairman of the Committee. This Committee operates pursuant to a written charter adopted by the Board on January 28, 2004. The Compensation Committee is responsible for reviewing and approving PeopleSoft’s compensation, including policies and programs, base salaries, incentive and bonus plans and payments and equity incentive awards. The Compensation Committee is also responsible for administering PeopleSoft’s stock plans, except to the extent that such responsibilities have been retained by the Board. The Compensation Committee has delegated to management certain day-to-day operational activities related to the stock plans. The Compensation Committee held eight meetings in 2003. See the “Report of the Compensation Committee” below.

Corporate Governance/ Nominating Committee

The Corporate Governance/ Nominating Committee currently consists of Messrs. Fanzilli, Maples and Goldby, who is the Chairman of the Committee. All members of the Corporate Governance/ Nominating Committee are independent. The Corporate Governance/ Nominating Committee evaluates and recommends candidates for election as directors, and also has responsibility for developing and implementing PeopleSoft’s corporate governance policies and assessing the independence and effectiveness of the Board and its committees. The Corporate Governance/ Nominating Committee also is responsible for reviewing related party transactions for potential conflicts of interest. The Corporate Governance/ Nominating Committee held one meeting during 2003 and otherwise conducted its business at Board meetings in 2003.


	*Consideration of Director Nominees*

The Corporate Governance/ Nominating Committee operates pursuant to a written charter adopted by the Board on January 28, 2004. In evaluating and determining whether to recommend a person as a candidate for election as a director, the Committee considers the qualifications set forth in PeopleSoft’s corporate governance policy, which include relevant management and/or technology experience; certain values such as

integrity, accountability, judgment and adherence to high performance standards; independence pursuant to the guidelines set forth in the corporate governance policy; ability and willingness to undertake the requisite time commitment to Board functions; and an absence of conflicts of interest with PeopleSoft.


	*Identifying Director Nominees; Consideration of Nominees of the Stockholders*

The Corporate Governance/ Nominating Committee may employ a variety of methods for identifying and evaluating nominees for director. The Committee regularly assesses the size of the Board, the need for particular expertise on the Board, the upcoming election cycle of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Committee considers various potential candidates for director which may come to the Committee’s attention through current Board members, professional search firms, stockholders or other persons. These candidates are evaluated at regular or special meetings of the Committee, and may be considered at any point during the year.

The Corporate Governance/ Nominating Committee will consider candidates recommended by stockholders, when the nominations are properly submitted, under the criteria summarized above in “Consideration of Director Nominees.” The deadlines and procedures for stockholder submissions of director nominees are described below under “Deadline for Submitting Stockholder Proposals and Director Nominations for the Next Annual Meeting.” Following verification of the stockholder status of persons proposing candidates, the Committee makes an initial analysis of the qualifications of any candidate recommended by stockholders or others pursuant to the criteria summarized above to determine whether the candidate is qualified for service on the PeopleSoft Board before deciding to undertake a complete evaluation of the candidate. If any materials are provided by a stockholder or professional search firm in connection with the nomination of a director candidate, such materials are forwarded to the Committee as part of its review. Other than the verification of compliance with procedures and stockholder status, and the initial analysis performed by the Committee, a potential candidate nominated by a stockholder is treated like any other potential candidate during the review process by the Committee.

Transaction Committee

In June 2003, the Board established a Transaction Committee, which currently consists of the following independent directors: Messrs. Fanzilli, Goldby, Maples, Yansouni and Battle, who is the Chairman of the Committee. The Transaction Committee is responsible for evaluating the Oracle tender offer, including any amendments thereto, and any related activities of Oracle in connection with its announced intent to acquire PeopleSoft. The Transaction Committee is also responsible for advising the Board on making recommendations to stockholders and any other actions the Board make take in response to Oracle’s offer. The Transaction Committee met eight times in 2003.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act and regulations of the SEC thereunder, require PeopleSoft’s executive officers and directors, and persons who own more than 10% of a registered class of PeopleSoft’s equity securities, to file reports of initial ownership and changes in ownership with the SEC. Based solely on its review of copies of such forms received by PeopleSoft, or on written representations from certain reporting persons that no other reports were required for such persons, PeopleSoft believes that, during or with respect to the period from January 1, 2004 to December 10, 2004, its executive officers and directors complied with all of the applicable Section 16(a) filing requirements.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of December 10, 2004 (except as noted below), certain information with respect to the beneficial ownership of PeopleSoft’s Common Stock by (i) each person known by PeopleSoft to own beneficially more than 5% of the outstanding shares of our Common Stock (“Principal Stockholder”), (ii) each director of PeopleSoft, (iii) each executive officer named in the Summary Compensation Table on page 13 of this information statement, and (iv) all directors and executive officers as a group. PeopleSoft knows of no agreements among its stockholders that relate to voting or investment power of its Common Stock.



		Shares of Common Stock
		Beneficially Owned(1)

Directors, Named Executive Officers				Percentage
and Principal Stockholders		Number		Ownership

Named Executive Officers
Craig A. Conway(2)(3)			3,078,142		*
Guy E. Dubois(2)(3)			1,149,929		*
Ram Gupta(2)(3)			294,791		*
Kevin T. Parker(2)(3)			1,165,614		*
W. Philip Wilmington(2)(3)			1,027,459		*
Directors
A. George “Skip” Battle(2)			166,066		*
Aneel Bhusri(2)			91,125		*
David A. Duffield(4)			26,559,093		7.07	%
Frank J. Fanzilli, Jr.(2)			81,250		*
Steven D. Goldby(2)			121,250		*
Michael J. Maples(2)			65,544		*
Cyril J. Yansouni(2)			138,000		*
All directors and executive officers as a group(5)			35,427,937		9.24	%
Principal Stockholders
Capital Group International, Inc.(6)			37,407,740		9.96	%
	11100 Santa Monica Blvd.
	Los Angeles, California 90025
Capital Research and Management Company(7)			21,303,630		5.67	%
	333 South Hope Street, 55th Floor
	Los Angeles, California
	90071-1447

* Less than 1%

(1) The percentage of ownership indicated is based on 375,494,375 shares of Common Stock outstanding as of November 30, 2004, together with applicable options for such stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to such shares. Each person holds sole voting and investment power over the shares reported for him unless otherwise indicated. Shares subject to options exercisable on December 10, 2004 or by April 1, 2005 (more than 60 days thereafter) have been deemed outstanding for computing the percentage ownership of the person holding such options, but are not deemed outstanding for computing the percentage ownership of any other person.

(2) Includes the following numbers of shares issuable upon exercise of options that were exercisable on December 10, 2004 or by April 1, 2005; Mr. Dubois: 1,036,241; Mr. Parker: 1,009,685; Mr. Wilmington: 1,011,357; Mr. Battle: 163,000; Mr. Bhusri: 65,000; Mr. Fanzilli: 81,250; Mr. Goldby: 121,250; Mr. Maples: 56,742; and Mr. Yansouni: 138,000. Includes 3,000,000 shares issuable upon the exercise of

options held by Mr. Conway that expire December 30, 2004 and 281,249 shares issuable upon the exercise of options held by Mr. Gupta that expire January 9, 2005. Messrs. Conway and Gupta departed employment with the Company effective October 1, 2004 and October 12, 2004, respectively.

(3) Includes the following numbers of unvested shares held subject to a forfeiture restriction pursuant to restricted stock awards as of April 1, 2005: Mr. Dubois: 89,250; Mr. Parker: 88,500; and Mr. Wilmington: 82,938.

(4) Mr. Duffield has served as the Chief Executive Officer of the Company since October 1, 2004. Mr. Duffield is also a Principal Stockholder. His address is c/o PeopleSoft, Inc., 4460 Hacienda Drive, Pleasanton, CA 94588. The stock shown includes 26,461,663 shares held by trusts or accounts of which Mr. Duffield is trustee or director and 97,430 shares held by Mr. Duffield’s wife. Mr. Duffield disclaims beneficial ownership of 3,597,438 shares of PeopleSoft Common Stock held in the Duffield Family Foundation, a charitable foundation.

(5) Includes 8,118,523 shares subject to stock options held by directors, named executive officers and other executive officers (16 persons) that were exercisable on December 10, 2004 or by April 1, 2005, and 531,064 unvested shares held subject to a forfeiture restriction pursuant to restricted stock awards.

(6) Shares beneficially owned are determined solely from information reported on an amended Schedule 13G dated November 10, 2004. Additionally, Capital Guardian Trust Company, a wholly owned subsidiary of Capital Group International, Inc., is deemed to be the beneficial owner of 21,750,580 shares of PeopleSoft’s Common Stock.

(7) Shares beneficially owned are determined solely from information reported on an amended Schedule 13G dated February 10, 2004.

EXECUTIVE OFFICERS

The Board of Directors designated the following persons as executive officers for the 2004 fiscal year:

David A. Duffield is a founder of PeopleSoft and is the Chief Executive Officer and Chairman of the Board. See additional information about Mr. Duffield in the section entitled “Current Board of Directors” above.

Kevin T. Parker, 45, Co-President and Chief Financial Officer, joined PeopleSoft in October 2000 as Senior Vice President and Chief Financial Officer. In January 2002, Mr. Parker was promoted to Executive Vice President of Finance and Administration, Chief Financial Officer, and in October 2004, he was promoted to Co-President and Chief Financial Officer. Mr. Parker served as Senior Vice President and Chief Financial Officer from 1999 to 2000 for Aspect Communications Corporation, a customer relationship management software company. From 1996 to 1999, Mr. Parker was Senior Vice President of Finance and Administration at Fujitsu Computer Products of America. Previous posts include Chief Financial Officer, Controller and other financial management positions at Standard Microsystems, O’Neil Data Systems, Toshiba America Information Systems, CalComp and Price Waterhouse. Mr. Parker attended Clarkson University where he received a bachelor’s degree in accounting.

Phil Wilmington, 46, joined PeopleSoft in December 1992. Before being promoted to his current position as Co-President, Mr. Wilmington held various positions including Executive Vice President, Americas, President of the Services Division, Vice President of Emerging Markets, General Manager of the Financial Services business unit, and General Manager of the Midwest Region. Prior to joining PeopleSoft, Mr. Wilmington served as Executive Vice President of Field Operations at Trinet, Inc. and as Vice President of Sales and Operations at Tesseract Corporation. Mr. Wilmington received a bachelor’s degree in marketing and business administration from Bradley University.

Nanci Caldwell, 46, joined PeopleSoft in April 2001 as Senior Vice President and Chief Marketing Officer. In January 2002, Ms. Caldwell was promoted to her current position as Executive Vice President and Chief Marketing Officer. Ms. Caldwell worked for Hewlett-Packard Company from 1982 to 2001, where she held a number of senior management roles, including: Vice President of Marketing-HP Services, Vice

President of North American Sales and Vice President of Worldwide Enterprise Marketing and Global Alliances. Ms. Caldwell received a degree in psychology from Canada’s Queen’s University and completed the University of Western Ontario’s Executive Marketing Management program.

Guy Dubois, 50, joined PeopleSoft in January 2000 as Executive Vice President, International. Mr. Dubois served as Executive Vice President, Worldwide Field Operations of The Vantive Corporation from 1999 to 2000. From 1995 to 1999, Mr. Dubois was Vice President and General Manager of the Europe, Middle East, Africa operations of Sybase Inc. From 1994 to 1995, Mr. Dubois was Vice President of Southern Europe at Sybase. Prior to that, he was Deputy Managing Director of Digital Equipment Corporation France. He serves as a director of Infovista Corporation. Mr. Dubois holds a master’s degree in science and is a chartered engineer, and graduated from Lille Business Management School (“EUDIL”) in France.

Michael Gregoire, 38, joined PeopleSoft in April 2000 as Senior Vice President, PeopleSoft Consulting, North America. In January 2003, he was promoted to Executive Vice President, PeopleSoft Global Services, and is in charge of all of PeopleSoft’s professional services, training and hosting. Prior to his employment at PeopleSoft, Mr. Gregoire spent 13 years at Electronic Data Systems Corporation, where he held a variety of management positions, last serving as Managing Director of Services for the Global Financial Markets Group. Mr. Gregoire has a Bachelor of Science degree in physics and computing from Wilfred Laurier University in Ontario, Canada, and an MBA from California Coast University. He is a graduate of the Thunderbird American School for International Business, International Executive Program. Mr. Gregoire serves on the Board of Directors of the Association of Management Consulting Firms (“AMCF”) in New York City.

James P. Shaughnessy, 50, Senior Vice President, General Counsel and Corporate Secretary, joined PeopleSoft in June 2004. From May 2002 to June 2004, he was Vice President & Deputy General Counsel of Hewlett-Packard Company, a computer manufacturing and software firm. In that role he supported HP’s Enterprise Systems Group, which develops, manufactures and sells servers, storage and software products and innovative enterprise solutions; and was responsible for HP’s international legal operations. Prior to that time, he served as Vice President & Deputy General Counsel for Compaq’s Worldwide Sales & Services organization. Before Compaq, he spent 10 years with Digital Equipment Corporation, where he was responsible for litigation, antitrust and competition and corporate compliance on a global basis.

Stan Swete, 44, Executive Vice President, Products & Technology, joined PeopleSoft in October 2004. Mr. Swete previously had worked at PeopleSoft from 1992 to July 2002, serving in various roles, including manager of PeopleTools Development, manager of PeopleTools Product Strategy, Vice President of PeopleSoft Product Development, and general manager for PeopleSoft Financial Management solutions. Mr. Swete graduated from Stanford University with bachelor’s and master’s degrees in industrial engineering.

EXECUTIVE COMPENSATION

The Board of Directors designated eight persons as executive officers for the 2003 fiscal year.

Summary Compensation Table

The following table sets forth the annual and long-term compensation (1) earned in each of the last three full fiscal years by PeopleSoft’s Chief Executive Officer and each of the other four most highly compensated executive officers (the “Named Executive Officers”) (note that Mr. Conway’s employment with the Company was terminated on October 1, 2004):



											Long-Term Compensation
											Award(s)
				Annual Compensation
														Securities
Name and								Other Annual			Restricted Stock			Underlying		All Other
Principal Position		Year		Salary		Bonus(2)		Compensation			Award(s)($)(3)			Options(#)		Compensation($)

Craig A. Conway			2003	$	1,000,000	$	2,325,000		—			—			1,500,000		—
	President and		2002		1,000,000		1,920,000		—		$	14,645,000	(4)		4,125,000		—
	Chief Executive Officer/ Director		2001		1,000,000		2,325,000		—			—			1,000,000		—
Guy E. Dubois			2003		356,000		725,000		72,000	(5)		730,000	(6)		300,000		—
	Executive Vice		2002		364,000		338,000		142,000	(5)		1,465,000	(7)		525,000		—
	President, EMEA		2001		281,000		891,000		153,000	(5)		—			60,000		—
Ram Gupta			2003		425,000		980,000		—			730,000	(6)		300,000		—
	Executive Vice		2002		425,000		1,386,000		—			1,465,000	(7)		525,000		—
	President, Products & Technology		2001		325,000		1,483,000		—			—			—		—
Kevin T. Parker			2003		425,000		1,100,000		—			837,000	(6)		300,000	$	3,000	(9)
	Executive Vice		2002		400,000		464,000		—			1,025,000	(7)		437,500		—
	President, Finance and Administration, Chief Financial Officer		2001		330,000		475,000		—			1,795,000	(8)		130,000		—
W. Philip Wilmington			2003		425,000		765,000		1,000			338,000	(6)		300,000		5,000	(9)
	Executive Vice		2002		425,000		391,000		—			1,465,000	(7)		525,000		8,000	(12)
	President, Americas		2001		350,000		1,057,000		17,000	(10)		449,000	(11)		130,000		8,000	(12)

(1) Dollar amounts are reported to the nearest $1,000.00.

(2) Payments of bonuses are made pursuant to PeopleSoft’s employee bonus plan, annual discretionary bonus program, and, as applicable, individual retention arrangements.

(3) On December 31, 2003, the number of unvested shares held pursuant to restricted stock awards, and their aggregate value on that date, was as follows: Mr. Conway: 500,000 shares valued at $11,395,000; Mr. Dubois: 69,125 shares valued at $1,575,359; Mr. Gupta: 69,125 shares valued at $1,575,359; Mr. Parker: 100,021 shares valued at $2,279,479; and Mr. Wilmington: 59,625 shares valued at $1,358,854. Dividends, if any, are payable to the holders of restricted stock under our plans.

(4) These shares vest 100% on February 1, 2006, or will vest pro rata if Mr. Conway leaves PeopleSoft under certain circumstances prior to February 2006.

(5) In 2001, Mr. Dubois received auto reimbursement, travel compensation and a sales excellence award of $4,095, $147,804 and $957, respectively. In 2002, he received auto reimbursement and travel compensation of $3,887 and $137,705, respectively. In 2003, he received auto reimbursement and travel compensation of $3,221 and $68,654, respectively.

(6) These shares vested 1/4 on January 30, 2004, then vest 1/16th per quarter thereafter, for a total vesting period of four years.

(7) These shares vested 1/4 on February 5, 2003, then vest 1/16th per quarter thereafter, for a total vesting period of four years.

(8) These shares vested 1/3 on October 30, 2002, then vest 1/12th per quarter thereafter, for a total vesting period of three years.

(9) The amounts represent PeopleSoft contributions made to the 401(k) plan accounts of the designated individuals.

(10) In 2001, Mr. Wilmington received sales commissions of $15,000 and a sales excellence award of $1,541. In 2003, he received a sales excellence award of $724.

(11) These shares vested 1/4 on October 30, 2002, then vest 1/16th per quarter thereafter, for a total vesting period of four years.

(12) The amounts represent PeopleSoft contributions made to the deferred compensation plan account of Mr. Wilmington.

Option Grants in Last Fiscal Year

The following table sets forth each grant of stock options made during the year ended December 31, 2003, to each of the Named Executive Officers. Each option was granted at the closing market price per share as reported on the Nasdaq National Market on the date of grant:



	Individual Grants
											Potential Realizable Value at
	Number of			% of Total							Assumed Annual Rates of
	Securities			Options							Stock Price Appreciation for
	Underlying			Granted to			Exercise				Option Term(2)
	Options			Employees in			Price		Expiration
Name	Granted(#)			Fiscal Year(1)			($/share)		Date		5%($)		10%($)

Craig A. Conway		375,000	(3)		2.56	%	$	17.81		01/16/2013	$	4,200,230	$	10,644,207
		375,000	(4)		2.56	%		16.67		05/04/2013		3,931,378		9,962,883
		375,000	(5)		2.56	%		16.56		08/04/2013		3,905,436		9,897,141
		375,000	(6)		2.56	%		20.79		11/16/2013		4,903,020		12,425,215
Guy E. Dubois		75,000	(3)		0.51	%		17.81		01/16/2013		840,046		2,128,841
		75,000	(4)		0.51	%		16.67		05/04/2013		786,276		1,992,577
		75,000	(5)		0.51	%		16.56		08/04/2013		781,087		1,979,428
		75,000	(6)		0.51	%		20.79		11/16/2013		980,604		2,485,043
Ram Gupta		75,000	(3)		0.51	%		17.81		01/16/2013		840,046		2,128,841
		75,000	(4)		0.51	%		16.67		05/04/2013		786,276		1,992,577
		75,000	(5)		0.51	%		16.56		08/04/2013		781,087		1,979,428
		75,000	(6)		0.51	%		20.79		11/16/2013		980,604		2,485,043
Kevin T. Parker		75,000	(3)		0.51	%		17.81		01/16/2013		840,046		2,128,841
		75,000	(4)		0.51	%		16.67		05/04/2013		786,276		1,992,577
		75,000	(5)		0.51	%		16.56		08/04/2013		781,087		1,979,428
		75,000	(6)		0.51	%		20.79		11/16/2013		980,604		2,485,043
W. Philip Wilmington		75,000	(3)		0.51	%		17.81		01/16/2013		840,046		2,128,841
		75,000	(4)		0.51	%		16.67		05/04/2013		786,276		1,992,577
		75,000	(5)		0.51	%		16.56		08/04/2013		781,087		1,979,428
		75,000	(6)		0.51	%		20.79		11/16/2013		980,604		2,485,043

(1) Options to purchase an aggregate of 14,673,030 shares of PeopleSoft’s Common Stock were granted to employees in 2003.

(2) These columns show the hypothetical gains or “option spreads” of the options granted based on assumed annual compound stock price appreciation rates of 5% and 10% over the full ten-year term of the options. The 5% and 10% assumed rates of appreciation are specified in the rules of the SEC and do not represent PeopleSoft’s estimated or projected future prices of PeopleSoft’s Common Stock.

(3) These shares vest 1/16 per quarter over four years, commencing January 16, 2003.

(4) These shares vest 1/16 per quarter over four years, commencing May 4, 2003.

(5) These shares vest 1/16 per quarter over four years, commencing August 4, 2003.

(6) These shares vest 1/16 per quarter over four years, commencing November 16, 2003.

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

The following table sets forth, for each of the Named Executive Officers, certain information concerning the exercise of stock options during 2003, including the year-end value of unexercised options:

Number of Securities

Underlying

Value of Unexercised

Unexercised Options at

In-the-Money Options at

Shares

Fiscal Year-End (#)

Fiscal Year-End(2) ($)

Acquired on

Value

Name

Exercise (#)

Realized(1) ($)

Exercisable/ Unexercisable

Craig A. Conway

200,000

1,772,500

4,017,186/4,007,814

17,234,975/$12,040,400

Guy E. Dubois

734,609/620,391

1,209,345/$2,194,980

Ram Gupta

512,998/642,275

1,668,784/$2,428,533

Kevin T. Parker

676,092/641,408

824,931/$2,244,019

W. Philip Wilmington

667,920/668,439

2,327,310/$2,311,743

(1) “Value Realized” is calculated by determining the difference between the closing price of PeopleSoft’s Common Stock as reported on the Nasdaq National Market on the date of exercise, and the exercise price of the shares.

(2) “Value of Unexercised In-the-Money Options at Fiscal Year-End” is calculated by determining the difference between the closing price per share of PeopleSoft’s Common Stock as reported on the Nasdaq National Market on December 31, 2003 ($22.79) and the exercise price of such options.

Employment Agreements and Severance Arrangements


	*Employment Agreements*

PeopleSoft has an employment agreement with one of its executive officers, Mr. Dubois, and previously had in place an employment agreement with its former chief executive officer, Mr. Conway, each as described below.

Mr. Conway and PeopleSoft entered into an employment agreement in May 1999. The Compensation Committee approved the material amendments to Mr. Conway’s employment agreement on May 27, 2003 and August 20, 2003, and a formal restated employment agreement was executed on January 30, 2004. The agreement provided for an annual base salary, subject to annual review by the Compensation Committee, which was then set at $1,000,000. In addition, the agreement provided that Mr. Conway’s bonuses would be determined by the Compensation Committee of the Board of Directors based on performance criteria established by the Compensation Committee. Pursuant to the employment agreement, in May 1999 the Compensation Committee granted Mr. Conway options to acquire 2,000,000 shares of PeopleSoft Common Stock at an exercise price of $12.6875 per share with monthly vesting over a four year period, conditioned on Mr. Conway’s continued employment or consulting relationship with PeopleSoft. Also pursuant to the employment agreement, Mr. Conway purchased 500,000 restricted shares of PeopleSoft’s Common Stock at $0.01 per share in 1999. Such restricted stock was subject to repurchase by PeopleSoft at its original purchase price, which right expired as to 25% of the shares each year over four years, conditioned on Mr. Conway’s continued employment or consulting relationship with PeopleSoft. All repurchase rights with respect to these restricted shares expired. Mr. Conway was eligible to receive additional grants of options and restricted stock as determined by the Compensation Committee.

Mr. Conway was entitled to severance pay and accelerated vesting of stock options and restricted stock awards under certain circumstances. If Mr. Conway was involuntarily terminated other than for cause, or if

Mr. Conway voluntarily terminated his employment with PeopleSoft for good reason, the vesting of his stock options and restricted stock was to be accelerated to the same extent as such options or restricted stock would have vested had Mr. Conway remained employed by PeopleSoft for an additional twenty-four months. However, the 500,000 shares of restricted stock granted to Mr. Conway in February 2002 were not subject to accelerated vesting upon termination of his employment, but instead vested pro rata based on the number of months from the date of grant through the date of termination. Mr. Conway also was entitled to severance equal to two years’ base salary plus target bonus. In the event of a change of control, Mr. Conway’s unvested stock options were to become fully vested and exercisable and his unvested restricted stock would also fully vest. If the vesting of Mr. Conway’s restricted stock could not be accelerated as described above, PeopleSoft was obligated to make a cash payment equal to the fair market value of the unvested restricted stock owned by Mr. Conway on the date of termination of employment or on the date of the change of control, as applicable.

On October 1, 2004, Mr. Conway’s employment was terminated by PeopleSoft’s Board and on October 18, 2004, PeopleSoft entered into a separation agreement with Mr. Conway. Pursuant to the separation agreement, Mr. Conway received the severance benefits provided for in his employment agreement, except that Mr. Conway received a discounted lump sum cash payment rather than continued payments for 24 months of base salary and target bonus. Accordingly, in October 2004, in fulfillment of PeopleSoft’s obligations under the employment agreement, Mr. Conway received severance payments of approximately $4.8 million in salary and benefits (prior to income tax withholding as required by law) and a cash settlement of a portion of his unvested restricted stock grants of approximately $8.9 million (prior to income tax withholding as required by law), which amount is equal to the fair market value of the applicable unvested shares on September 30, 2004.

PeopleSoft has an employment agreement with Mr. Dubois that was entered into in January 2000. He had previously been employed by The Vantive Corporation, which was acquired by PeopleSoft in 1999. The agreement provided for an initial base salary and a target bonus, both of which are subject to annual adjustment and were set at $425,000, inclusive of a travel hardship allowance, and $400,000, respectively, for 2003, and at $425,000, inclusive of a travel hardship allowance, and $400,000, respectively, for 2004. Either Mr. Dubois or PeopleSoft may terminate the agreement upon three months’ notice at any time. On October 18, 2004, PeopleSoft entered into a retention agreement with Mr. Dubois which provides for the payment of a $500,000 retention bonus if, on May 15, 2005, Mr. Dubois is employed, and has been continuously employed since the date of the retention agreement, by PeopleSoft and/or its divisions, subsidiaries or affiliates or any successors to any such entities. The retention agreement implements a bonus that was approved by PeopleSoft’s Compensation Committee in early 2004. Mr. Dubois’ retention bonus was awarded in lieu of the deferred stock bonuses that were awarded to other comparable executives based in the United States in June 2004. Mr. Dubois’ agreement was further amended effective September 2004 to add provisions to ensure that Mr. Dubois is entitled to the benefits of the severance policy for Presidents, Co-Presidents and Executive Vice Presidents, as described below, which supersede the severance benefits provisions in the original contract, providing for severance pay equal to nine months’ salary and nine months’ target bonus if his employment is terminated by PeopleSoft without cause.

As of October 1, 2004, the Board appointed Mr. Duffield as Chief Executive Officer of the Company, Messrs. Parker and Wilmington as Co-Presidents, and Mr. Bhusri as Vice Chairman of the Board. In connection with such appointments, the Compensation Committee approved an annual salary of $750,000 for each of Messrs. Parker and Wilmington and a guaranteed $500,000 initial annual bonus, with annual bonuses thereafter subject to the achievement of performance criteria to be set by the Compensation Committee. Messrs. Parker and Wilmington did not receive any additional equity awards in connection with their appointments. Mr. Duffield receives a salary of $1 per year plus benefits for serving as Chief Executive Officer.


	*Severance Arrangements*

The Compensation Committee approved severance policies for PeopleSoft executive officers in January 2003, and amended such policies in May, June, September and October 2004. The severance policies apply to Presidents, Co-Presidents, Executive Vice Presidents and Senior Vice Presidents. During 2003, the Board designated all six Executive Vice Presidents and one Senior Vice President as executive officers of PeopleSoft,

and currently the two Co-Presidents, all four Executive Vice Presidents and one Senior Vice President have been designated by the Board as executive officers of PeopleSoft. Pursuant to the severance policy applicable to Presidents, Co-Presidents and Executive Vice Presidents, each is eligible to receive twelve months’ salary, health insurance continuation payments, and target bonus under an employee bonus plan (see “Report of the Compensation Committee — Components of Executive Compensation” below for a description of the bonus plan), and credit for twelve months’ vesting with respect to equity awards, in the event of termination of employment for other than “Cause” as defined in the policy. Senior Vice Presidents are eligible for the same provisions, except that the benefits extend for nine months. The aggregate target bonus potentially payable to eligible officers as a group under the severance policy is $3,958,000 for fiscal year 2004.

In addition, in the event of termination of employment under certain circumstances following a “Change of Control” as defined in the policies, each eligible executive officer also will be entitled to additional benefits. Presidents, Co-Presidents and Executive Vice Presidents will be eligible to receive twenty-four months’ salary and target bonus (instead of twelve months) and Senior Vice Presidents will be eligible to receive eighteen months’ salary and target bonus (instead of nine months). In addition, each eligible executive officer will receive 100% vesting of his/her outstanding unvested options (but not any restricted stock awards or executive stock bonuses), and payments for up to twenty-four months of health care coverage. In lieu of acceleration of restricted stock awards, PeopleSoft will make a cash payment equal to the fair market value of the unvested restricted stock owned by the executive on the date of termination of employment. In order to receive benefits under this policy, an eligible executive must elect to forego all rights to compensation or accelerated vesting available upon termination of employment under the terms of any other agreement or arrangement with PeopleSoft. Messrs. Parker and Wilmington have each elected to forego such rights. In connection with such amendment, the definition of “Constructive Discharge” in the severance policy for Presidents, Co-Presidents and Executive Vice Presidents also was amended to provide that any person serving as a President or Co-President prior to a Change of Control will be deemed to have experienced a Constructive Discharge after a Change of Control, even if he continues to be employed by the Company or its acquiror, and regardless of his job description or duties and responsibilities after a change of control. Mr. Parker also has a retention bonus arrangement that contains acceleration of service provisions if his employment is terminated without cause or in connection with a change of control of PeopleSoft.

On October 12, 2004, the Company entered into a separation agreement and general release with Ram Gupta, former Executive Vice President, Products and Technology. Pursuant to the separation agreement, Mr. Gupta received the severance benefits provided for in the Company’s Executive Severance Policy for Presidents, Co-Presidents and Executive Vice Presidents. In addition, Mr. Gupta received $124,147 (prior to income tax withholding as required by law), in lieu of accelerated vesting of shares of restricted stock that were scheduled to vest in October and November 2004.

REPORT OF THE COMPENSATION COMMITTEE

Set forth below is the report of the Compensation Committee with respect to 2003, the last full fiscal year of the Company.

General

The PeopleSoft Board of Directors has delegated to the Compensation Committee of the Board (the “Committee”) the responsibility of reviewing and approving PeopleSoft’s compensation programs, including the base salaries, bonus targets and payments, and equity incentive awards of executive officers. The Committee is also responsible for administering PeopleSoft’s stock plans, except to the extent that such responsibilities have been retained by the Board. The Committee has delegated to management certain day-to-day operational activities related to the stock plans.

The Committee is comprised solely of “independent” directors, as that term is defined in the Nasdaq listing standards, as well as under Rule 16b-3 of the Exchange Act and Section 162(m) of the Internal Revenue Code. In 2003, the members of the Compensation Committee were A. George (“Skip”) Battle

(chair), Steven D. Goldby and Cyril J. Yansouni. The Board adopted a charter for the Committee in January 2004.

Compensation Philosophy

PeopleSoft’s executive compensation programs are designed to attract, motivate and reward superior executive performance that will create long-term stockholder value — and to encourage executives who deliver that performance to remain with PeopleSoft and to continue that level of performance. In setting executives’ compensation, the Committee weighs a range of factors, taking into account both PeopleSoft’s performance and individual achievement. The Committee also considers salary survey data from selected peer group companies, including competitors, to ensure that PeopleSoft’s compensation programs are competitive in the industry. Generally, the Compensation Committee approves the compensation programs for executive officers for a given year at the beginning of the year. The compensation programs for the executive officers for 2003 were determined at a January 2003 meeting of the Committee.

Components of Executive Compensation

The executive compensation program consists primarily of four elements: (a) base salary, (b) cash incentive compensation, (c) stock options and (d) restricted stock awards. Other equity incentives may be considered for executives from time to time. Executive officers also have the opportunity to participate in various benefits generally available to all full-time employees of PeopleSoft, including health and welfare plans. In addition, PeopleSoft’s executives are eligible to participate in a non-qualified deferred compensation plan and the PeopleSoft 401(k) Plan. The CEO and two other executive officers also received cash retention bonuses during 2003.

Base Salary. Salary is paid for ongoing performance throughout the year. PeopleSoft has targeted base salary for executive officers that is above the average of a selected group of companies within the information technology industry. These peer companies are considered to be actual or potential competitors of PeopleSoft for executive talent. Executives’ performance and base salaries are reviewed annually by the Compensation Committee and may be adjusted at that time based principally on the following factors: PeopleSoft’s overall performance; the executive’s contributions to corporate goals; changes in the executive’s scope of responsibilities; published pay data for comparable positions in the industry; and internal compensation equity considerations.

Annual Bonus. To reinforce the attainment of PeopleSoft’s corporate goals and objectives, the Compensation Committee believes that a substantial portion of the annual cash compensation of each executive officer should be in the form of variable incentive pay. The maximum target cash incentive compensation for each executive officer is determined based on the same factors applicable to the determination of base salaries as described above. Executives other than the CEO are eligible to receive quarterly bonuses under a broad-based employee bonus plan (“Bonus Plan”) based on a combination of Company performance and the achievement of individual goals and objectives. Company performance factors include achievement of revenue and operating income targets and attainment of customer satisfaction objectives; individual objectives or goals may include business unit revenue, margin, operating goals and objectives and management of operating expenses. The CEO’s cash incentive compensation is awarded annually based on Company and individual performance criteria as discussed below.

At the end of each year, the Committee reviews the overall performance of each executive and the role the executive played in PeopleSoft’s overall performance. Based on exceptional Company and individual performance, the Committee may award a discretionary cash bonus, paid in addition to the Annual Bonus amount.

Restricted Stock and Stock Options. PeopleSoft’s executive compensation policy emphasizes longer-term incentives through restricted stock and stock options. Such awards compensate executives who achieve excellent performance that advances stockholder interests. Restricted stock awards and stock options may be awarded to individual executives based on the individual’s performance and achievement of goals, the executive’s contributions to PeopleSoft’s performance, and the Committee’s assessment of the executive’s

potential to contribute to PeopleSoft’s long-term success. Other factors include an evaluation of market survey data for peer group companies, and the retention and incentive value of equity awards currently held by the executive.

All stock options granted by PeopleSoft in 2003 had an exercise price equal to the market price of PeopleSoft’s Common Stock on the date of grant. As a result, those stock options will only have value if the stock price increases after the grant date and the executive remains employed by PeopleSoft on the vesting date. In 2002 and 2003, stock option grants were made to each executive in quarterly increments, rather than in a single grant. Restricted stock grants, if made, are generally made in a single, annual award.

CEO Compensation Philosophy

The Compensation Committee has established a policy of compensating the CEO based on PeopleSoft’s overall performance relative to PeopleSoft’s objectives and its competitors. Performance measures include achievement of revenue and operating income targets and expense management, and investor return. The Compensation Committee also considers Mr. Conway’s individual performance in providing PeopleSoft with short and long-term direction and vision, developing strategy, and meeting or exceeding operating goals based on the execution of those strategies. As with all executive compensation decisions, the Committee considers the current market pay levels for peer group companies.

CEO Cash Compensation

Based upon these factors, in January 2003, the Committee established Mr. Conway’s base salary for 2003 at $1,000,000; his base salary has remained unchanged since 2001. Although the CEO does not participate in the Bonus Plan, the Committee establishes an annual target cash incentive for Mr. Conway, also based on the factors described above. For 2003, Mr. Conway’s annual bonus target remained at $1,500,000, unchanged since 2001. Upon its review of PeopleSoft’s overall financial and business performance during the year as well as its performance relative to competitors, and the Committee’s evaluation of Mr. Conway’s outstanding performance in leading PeopleSoft, Mr. Conway was awarded a cash incentive bonus at 100% achievement of his target, or $1,500,000.

In addition, based on the successful acquisition of J.D. Edwards & Company and progress of its integration with PeopleSoft, the extraordinary performance in successfully meeting or exceeding stockholder expectations in an extremely challenging environment and PeopleSoft’s consistently strong performance, the Committee awarded Mr. Conway an additional $500,000 discretionary bonus for 2003. Mr. Conway also received a $325,000 retention bonus payment in 2003.

CEO Equity Compensation

In 2003, the Committee granted to Mr. Conway options to purchase an aggregate of 1,500,000 shares of PeopleSoft’s Common Stock, a significant decrease from the equity incentives granted to Mr. Conway in 2002. These options have exercise prices ranging from $16.56 to $20.79 per share. The shares subject to each option vest in equal quarterly increments over a four-year period. In awarding these options, the Compensation Committee considered Mr. Conway’s contribution to the long-term success of PeopleSoft, and the stock and option positions of peer company CEOs. These options are intended to continue to align Mr. Conway’s compensation with stockholder interests, to maintain Mr. Conway’s compensation at a competitive level and to act as a reward and retention vehicle that reflects his continued contributions to increased company value over time.

Committee Actions for 2004

In an effort to maintain close alignment with PeopleSoft’s stockholder interests, the Compensation Committee and the full Board recently took a number of forward-looking actions regarding executive compensation and equity awards generally. These actions included the following:

• No changes were made to cash compensation levels for any executive officer. Based on the state of the competitive market, the Compensation Committee believes PeopleSoft executives are fairly and appropriately compensated for 2004.

• Equity awards in 2004 to executives will be solely in the form of restricted stock. We expect this action to further align the long-term interests of our stockholders and executives by providing rewards based on increased company value, by holding greater retention value for PeopleSoft executives and by the additional benefit of being less dilutive than pure option awards. In addition, the Compensation Committee, after consultation with one of our stockholders, is developing a policy that, commencing in 2005, PeopleSoft will tie vesting of 50% of the equity awards granted to PeopleSoft’s CEO and the four other most highly compensated officers to performance based metrics that the Compensation Committee will establish.

• Reduction in the annual refresh rate of the Amended and Restated 1989 Stock Plan from the lesser of 20 million shares or 5% of our outstanding Common Stock annually to the lesser of 20 million shares or 3% annually. PeopleSoft decided to further reduce the annual refresh rate to (i) the lesser of 20 million shares or 2% of our outstanding common stock annually, effective January 1, 2006, and (ii) the lesser of 20 million shares or 1% of our outstanding common stock annually, effective January 1, 2008 after consultation with one of our stockholders. The 1989 Plan is the primary vehicle from which stock options, restricted stock and other equity incentives are distributed to employees and executives. This decision will reduce the amount of equity available to grant to employees and executives, starting in 2004. This plan now provides an annual refresh rate that we believe is consistent with other firms in our industry and with stockholder expectations.

• Cancellation of approximately nine million shares available for equity awards at December 31, 2003 from the 1989 Plan. In further reducing the number of available shares being carried forward from year to year, the Board has acted in the best interests of stockholders while maintaining adequate equity incentives to attract and retain a valuable workforce.

• Reduction in the number and size of broad-based equity grants to both new and current employees. Taking into account leading practices for larger technology companies, the Compensation Committee has directed PeopleSoft management to emphasize awarding equity incentives to the Company’s top performers.

• Termination of the 2000 Nonstatutory Stock Option Plan, a plan providing for the grant of options that do not qualify for incentive stock option treatment. This plan was put into effect to address special retention issues and is no longer used. While currently outstanding options under the plan will continue to be exercisable, no new equity awards will be made under this plan.

Tax Deduction Limit

Current U.S. tax law has a $1 million annual tax deduction limit on compensation a company pays to its chief executive officer and to each of its four other most highly compensated executive officers. Compensation subject to this deduction limit includes: cash compensation; the difference between the exercise price of stock options granted and the value of the underlying stock on the date of exercise; and the difference between the purchase price of a restricted stock award and the value of the underlying stock on the vesting date. PeopleSoft may deduct compensation with respect to any of these individuals only to the extent that during any fiscal year such compensation does not exceed $1 million or meets certain other “performance based” criteria which must be approved by the stockholders (as defined under the Internal Revenue Code and related regulations).

To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Compensation Committee has not adopted a policy that all compensation must be deductible.

COMPENSATION COMMITTEE

A. George “Skip” Battle (Chair)

Steven D. Goldby

Cyril J. Yansouni

Compensation Committee Interlocks and Insider Participation

Messrs. Battle, Goldby and Yansouni served as members of the Compensation Committee during 2003 and none of them was an officer or employee of PeopleSoft or any of its subsidiaries during that time or an executive officer of any entity for which any executive officer of PeopleSoft serves as a director or a member of the compensation committee.

REPORT OF THE AUDIT COMMITTEE

Set forth below is the report of the Audit Committee with respect to 2003, the last full fiscal year of the Company.

The Audit Committee consists solely of independent directors as defined in the Nasdaq listing standards. Pursuant to the charter adopted by the Board in 2000, as amended and restated in 2004, the Audit Committee acts on behalf of the Board of Directors to oversee PeopleSoft’s financial reporting processes, accounting principles and the adequacy of its internal accounting controls. The Committee is responsible for selecting and retaining PeopleSoft’s independent auditors, approving the services they will perform, and reviewing the performance of PeopleSoft’s internal and independent auditors. The Committee reviews financial and operating reports and disclosures, including PeopleSoft’s reports filed on Forms 10-K and 10-Q.

The Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the independent auditors, nor can the Committee certify that the independent auditors are “independent” under applicable rules. The Committee serves in a board-level oversight role in which it provides advice, counsel and direction to management and the auditors based on the information it receives, on discussions with management and the auditors, and on the Committee members’ experience in business, financial and accounting matters. The Committee has the authority to engage its own outside advisors apart from counsel or advisors hired by management as it determines appropriate, including experts in particular areas of accounting. Management is responsible for the reporting processes and preparation and presentation of financial statements and the implementation and maintenance of internal controls. PeopleSoft’s independent auditors are responsible for expressing an opinion on the conformity of PeopleSoft’s audited financial statements to generally accepted accounting principles in the United States.

In 2003, the Committee met 14 times. The Committee meetings were attended by senior members of the financial management team and of the General Counsel’s office and representatives of PeopleSoft’s independent auditors; representatives of PeopleSoft’s internal auditors also attended many of the meetings. Nine of the meetings included executive sessions where the Committee met with PeopleSoft’s independent auditors without management representatives. The Committee provided opportunities for the internal auditors to meet in executive session with the Committee as well.

During 2003, the Committee reviewed with management and independent auditors the overall audit scope and plans, the results of external audit examinations, evaluations by the auditors of internal controls and the quality of PeopleSoft’s financial reporting. The Committee also reviewed with management and with PeopleSoft’s internal auditors the internal audit scope and plans, results of internal audits, and the progress of

PeopleSoft’s and the internal auditors’ in-depth review of PeopleSoft’s internal controls, in preparation for the year-end assessment that will occur at the end of the 2004 fiscal year.

The Committee has reviewed and discussed with management and the independent auditors the audited financial statements and interim financial reporting for the year ended December 31, 2003, as well as for prior years. The independent auditors’ presentations to the Committee included the matters required to be discussed in accordance with Statement on Auditing Standards No. 61 (Communication with Audit Committees). In addition, the Committee reviewed with the independent auditors the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees, as amended). Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board approved, that PeopleSoft’s audited financial statements for the year ended December 31, 2003 be included in the Annual Report on Form 10-K.

AUDIT COMMITTEE

Cyril J. Yansouni (Chair)

A. George “Skip” Battle

Frank J. Fanzilli, Jr.

Steven D. Goldby

PEOPLESOFT STOCK PERFORMANCE

The following graph compares the cumulative total return on a percentage basis to stockholders on PeopleSoft’s Common Stock from December 31, 1998 through December 31, 2003 to the cumulative total return of (i) the S&P 500 Index (ii) the Nasdaq Stock Market (U.S. Companies) Index, and (iii) the Nasdaq Computer and Data Processing Services Group Index, assuming the investment of $100 in PeopleSoft’s Common Stock and in each of the other indices, and reinvestment of all dividends.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN

AMONG PEOPLESOFT, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX,

THE S&P 500 INDEX AND THE NASDAQ COMPUTER & DTA PROCESSING INDEX

(PEOPLESOFT 5 YR CUMULATIVE TOTAL RTRN LINE GRAPH)

23 EX-99.(E)(35) 6 f03438a7exv99wxeyx35y.htm EXHIBIT (E)(35) exv99wxeyx35y

Exhibit (e)(35)

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER
dated as of

December 12, 2004

among

PEOPLESOFT, INC.,

ORACLE CORPORATION

and

PEPPER ACQUISITION CORP.

TABLE OF CONTENTS


		PAGE
ARTICLE I
DEFINITIONS

Section 1.01.	Definitions		1

Section 1.02.	Other Definitional and Interpretative Provisions		6

ARTICLE II
THE OFFER

Section 2.01.	The Offer		7

Section 2.02.	Company Action		8

Section 2.03.	Directors		9

ARTICLE III
THE MERGER

Section 3.01.	The Merger		10

Section 3.02.	Conversion of Shares		11

Section 3.03.	Surrender and Payment		11

Section 3.04.	Dissenting Shares		13

Section 3.05.	Stock Options and Restricted Stock		13

Section 3.06.	Adjustments		14

Section 3.07.	Withholding Rights		14

Section 3.08.	Lost Certificates		14

ARTICLE IV
THE SURVIVING CORPORATION

Section 4.01.	Certificate of Incorporation		15

Section 4.02.	Bylaws		15

Section 4.03.	Directors and Officers		15

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Section 5.01.	Corporate Existence and Power		15

Section 5.02.	Corporate Authorization		15

Section 5.03.	Governmental Authorization		16

Section 5.04.	Non-contravention		16

Section 5.05.	Capitalization		16

Section 5.06.	Subsidiaries		17

TABLE OF CONTENTS
(continued)


		PAGE
Section 5.07.	SEC Filings		18

Section 5.08.	Financial Statements and Internal Controls		19

Section 5.09.	Disclosure Documents		20

Section 5.10.	Absence of Certain Changes		21

Section 5.11.	No Undisclosed Material Liabilities		23

Section 5.12.	Customer Obligations		23

Section 5.13.	Compliance with Laws and Court Orders		23

Section 5.14.	Litigation		23

Section 5.15.	Finders’ Fees		24

Section 5.16.	Opinion of Financial Advisors		24

Section 5.17.	Change of Control Arrangements		24

Section 5.18.	Antitakeover Statutes and Rights Agreement		24

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT

Section 6.01.	Corporate Existence and Power		25

Section 6.02.	Corporate Authorization		25

Section 6.03.	Governmental Authorization		25

Section 6.04.	Non-contravention		26

Section 6.05.	Disclosure Documents		26

Section 6.06.	Finders’ Fees		27

Section 6.07.	Financing		27

ARTICLE VII
COVENANTS OF THE COMPANY

Section 7.01.	Conduct of the Company		27

Section 7.02.	Stockholder Meeting; Proxy Material		28

Section 7.03.	Access to Information		29

Section 7.04.	No Solicitation; Other Offers		29

Section 7.05.	Notices of Certain Events		31

Section 7.06.	Company ESPP		32

ARTICLE VIII
COVENANTS OF PARENT

TABLE OF CONTENTS
(continued)


		PAGE
Section 8.01.	Obligations of Merger Subsidiary		32

Section 8.02.	Voting of Shares		32

Section 8.03.	Director and Officer Liability		32

Section 8.04.	Severance and Benefit Plans; Bonuses		34

Section 8.05.	S-8 Registration		35

Section 8.06.	Parent Plans		36

ARTICLE IX
COVENANTS OF PARENT AND THE COMPANY

Section 9.01.	Reasonable Best Efforts		36

Section 9.02.	Certain Filings		36

Section 9.03.	Public Announcements		36

Section 9.04.	Merger Without Meeting of Stockholders		37

Section 9.05.	Dismissal of Litigation		36

Section 9.06.	Stockholder Litigation		37

Section 9.07.	Insider Restrictions		37

Section 9.08.	Integration Planning		38

ARTICLE X
CONDITIONS TO THE MERGER

Section 10.01.	Conditions to Obligations of Each Party		38

ARTICLE XI
TERMINATION

Section 11.01.	Termination		38

Section 11.02.	Effect of Termination		40

ARTICLE XII
MISCELLANEOUS

Section 12.01.	Notices		41

Section 12.02.	Survival of Representations, Warranties and Agreements		42

Section 12.03.	Amendments and Waivers		42

Section 12.04.	Expenses		43

Section 12.05.	Binding Effect; Benefit; Assignment		43

Section 12.06.	Governing Law		44

iii

TABLE OF CONTENTS
(continued)


		PAGE
Section 12.07.	Jurisdiction		43

Section 12.08.	WAIVER OF JURY TRIAL		43

Section 12.09.	Counterparts; Effectiveness		43

Section 12.10.	Entire Agreement		44

Section 12.11.	Severability		44

Section 12.12.	Specific Performance		45

Section 12.13.	Guarantee of Parent		45

EXHIBIT A: CONDITIONS TO THE OFFER
EXHIBIT B: FORM OF RESTATED CERTIFICATE OF INCORPORATION

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER dated as of December 12, 2004, among PeopleSoft, Inc., a Delaware corporation (the “Company”), Oracle Corporation, a Delaware corporation (“Parent”), and Pepper Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Subsidiary”).

WHEREAS, Merger Subsidiary has outstanding an offer (the “Existing Offer”) to purchase any and all the outstanding shares of common stock, par value $0.01 per share, of the Company (the “Shares”), including the associated Company Rights (as defined herein), on the terms and subject to the conditions set forth in the Amended and Restated Offer to Purchase dated November 3, 2004, and in the related letter of transmittal;

WHEREAS, the parties hereto have agreed to the acquisition of the Company at a price of $26.50 per share and Parent has agreed to cause Merger Subsidiary to amend the Existing Offer to reflect such agreement (the “Amended Offer”, and as it may be amended from time to time in accordance with this Agreement, the “Offer”);

WHEREAS, the board of directors of the Company (the “Company Board”) has approved the acquisition of the Company by Parent and resolved and agreed to recommend that holders of Shares tender their Shares pursuant to the Offer;

WHEREAS, in furtherance of such transaction, the respective Boards of Directors of Parent, Merger Subsidiary and the Company have approved the merger of Merger Subsidiary with and into the Company (the “Merger”) on the terms and subject to the conditions set forth in this Agreement, whereby each issued Share not owned directly by Parent, Merger Subsidiary or the Company (other than Dissenting Shares (as defined herein)) shall be converted into the right to receive the Offer Price (as defined herein); and

WHEREAS, Parent, Merger Subsidiary and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions. (a) The following terms, as used herein, have the following meanings:

“Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry relating to, or any indication of interest in, (i) any acquisition or purchase, direct or indirect, of (A) assets of the Company or any

Subsidiary of the Company constituting 15% or more of the consolidated assets of the Company and its Subsidiaries or accounting for 15% or more of the consolidated revenue of the Company and its Subsidiaries or (B) 15% or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company or account for 15% or more of the consolidated revenue of the Company and its Subsidiaries, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any Person beneficially owning 15% or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company or account for 15% or more of the consolidated revenue of the Company and its Subsidiaries or (iii) a merger, consolidation, share exchange, business combination, sale of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company or account for 15% or more of the consolidated revenue of the Company and its Subsidiaries.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.

“Business Day” means a day other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

“Code” means the Internal Revenue Code of 1986.

“Company Balance Sheet” means the consolidated balance sheet of the Company as of September 30, 2004 and the footnotes thereto set forth in the Company 10-Q.

“Company Balance Sheet Date” means September 30, 2004.

“Company Plan” means any of the following stock option or compensation plans or arrangements: PeopleSoft, Inc. Amended and Restated 1989 Stock Plan, PeopleSoft, Inc. 1992 Employee Stock Purchase Plan, PeopleSoft, Inc. Amended and Restated 2001 Stock Plan, PeopleSoft, Inc. 2000 Nonstatutory Stock Option Plan, PeopleSoft, Inc. 2003 Directors Stock Plan, Teamscape Corporation 1998 Stock Plan, SkillsVillage, Inc. 1999 Stock Plan, Advance Planning Solutions, Inc. 1998 Stock Plan, Intrepid Systems, Inc. 1992 Stock Option Plan, Red Pepper Software Company 1993 Stock Option Plan, Trimark Technologies, Inc. 1993 Stock Option Plan, Trimark Technologies, Inc. 1995 Employee and Consultants Stock Option Plan, Trimark Technologies 1998 Directors and Executive Officers Non-Statutory Stock Option Plan, Trimark Technologies 1995 Directors and Executive Officers Stock Option Plan, The Vantive Corporation Amended and Restated 1991 Stock Option Plan, The Vantive Corporation 1997 Nonstatutory Stock Option Plan, J.D. Edwards & Company 1992 Incentive Stock Option Plan, J.D. Edwards & Company 1992 Nonqualified Stock Option

Plan, J.D. Edwards & Company 1997 Employee Stock Purchase Plan, J.D. Edwards & Company 1997 Equity Incentive Plan, J.D. Edwards & Company 1997 Employee Stock Purchase Plan for Non-United States Employees, J.D. Edwards & Company 2003 Equity Incentive Plan, J.D. Edwards & Company YOUcentric 2000 Equity Compensation Plan.

“Company 10-K” means the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2003.

“Company 10-Q” means the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 2004.

“Customer Assurance Program” means all Customer Assurance Provisions.

“Customer Assurance Provision” means a provision of a license agreement between the Company or any Subsidiary of the Company and a customer entered into during or after June 2003, pursuant to which the customer might become entitled to a payment from the Company, such Subsidiary or Parent as a result of the consummation of the transactions contemplated by this Agreement if, after such consummation, the Company, such Subsidiary or Parent acts or fails to act in the manner described in such provision.

“Delaware Law” means the General Corporation Law of the State of Delaware.

“Employee Plan” means each “employee benefit plan,” as defined in Section 3(3) of ERISA, each employment, severance or similar contract, plan, arrangement or policy and each other plan or arrangement (written or oral) providing for compensation, bonuses, profit sharing, stock option or other stock related rights or other forms of incentive or deferred compensation (including each Company Plan), vacation benefits, insurance (including any self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, workers’ compensation, supplemental unemployment benefits, severance benefits and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits) which is maintained, administered or contributed to by the Company or any ERISA Affiliate and covers any employee or former employee of the Company or any of its Subsidiaries, or with respect to which the Company or any of its Subsidiaries has any liability.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” of any entity means any other entity that, together with such entity, would be treated as a single employer under Section 414 of the Code.

“Exchange Act” means the Securities Exchange Act of 1934.

“Governmental Entity” means any government or governmental authority, body, agency or official, domestic, foreign or supranational, or any court, domestic, foreign or supranational.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien, any property or asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.

“Material Adverse Effect” means, with respect to any Person, a material adverse effect on the condition (financial or otherwise), business, liabilities, properties, assets or results of operations of such Person and its Subsidiaries, taken as a whole, except, in the case of the Company, for any such effect resulting from or arising in connection with (i) the making, pendency or consummation of the Existing Offer or the Amended Offer (and any earlier offer since June 6, 2003 by Merger Subsidiary to purchase all of the Shares), this Agreement or the transactions contemplated hereby or the negotiation of this Agreement or any disclosures with respect to any of the foregoing, (ii) changes, circumstances or conditions generally affecting the industry in which the Company or its Subsidiaries operates and not substantially disproportionately affecting the Company or its Subsidiaries, (iii) changes in general economic or political conditions or in the financial markets (including any changes resulting from terrorist activities, war or other armed hostilities) or (iv) changes in law or accounting principles; and provided that any reduction of the Company’s revenue from and after the date hereof shall not constitute or be deemed to constitute a Material Adverse Effect.

“Minimum Condition” means there being validly tendered and not withdrawn before the expiration of the Offer a number of Shares which, together with the Shares then owned by Parent and its Subsidiaries (including Merger Subsidiary) represents a majority of the total number of Shares then outstanding on a fully diluted basis.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933.

“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly owned by such Person.

“Third Party” means any Person as defined in this Agreement or in Section 13(d) of the Exchange Act, other than Parent or any of its Affiliates.

Any reference in this Agreement to a statute shall be to such statute, as amended from time to time, and to the rules and regulations promulgated thereunder.

(b) Each of the following terms is defined in the Section set forth opposite such term:


Term		Section
Certificates		3.03(a)
Closing		3.01(b)
Closing Date		3.01(b)
Company		Recitals
Company Board		Recitals
Company Disclosure Documents		5.09(a)
Company Disclosure Schedule		Article V
Company ESPP		7.06
Company Option		3.05(a)
Company Proxy Statement		5.09(a)
Company Rights		5.05(b)
Company SEC Documents		5.07(a)
Company Securities		5.05(b)
Company Stockholder Meeting		7.02
Company Subsidiary Securities		5.06(b)
Confidentiality Agreement		7.03(a)
Control Date		2.03(a)
Dismissal Date		9.05
Dissenting Shares		3.04
Effective Time		3.01(c)
e-mail		12.01
End Date		11.01(b)(i)
Exchange Agent		3.03(a)
Existing Offer		Recitals
Financial Advisor		5.15
Financial Advisor Opinion		5.16
Foreign Severance Plans		5.17
GAAP		5.08(a)
Indemnified Person		8.03 (a)
Information Statement		2.03 (b)
Initial Expiration Date		2.01(a)
Maximum Premium		8.02(b)
Merger		Recitals
Merger Consideration		3.02(a)
Merger Subsidiary		Recitals
Offer		Recitals
Offer Documents		2.01(b)


Term		Section
Offer Price		2.01(a)
Option Exchange Ratio		3.05(a)
Parent		Recitals
Parent Plans		8.04(b)
Parent Shares		3.05(a)
Payment Event		12.04(b)
Restricted Stock		3.05(b)
Rights Agreement		5.05(b)
Schedule 14D-9		2.02(b)
Schedule 14D-9 Amendment		2.02(b)
Schedule TO		2.01(b)
Schedule TO Amendment		2.01(b)
Section 16		9.07
Severance Plans		8.04(a)
Shares		Recitals
Subsequent Offering Period		2.01(a)
Superior Proposal		7.04(c)
Surviving Corporation		3.01(a)
Transaction Committee		2.02(a)
Uncertificated Shares		3.03(a)

Section 1.02. Other Definitional and Interpretative Provisions. Unless specified otherwise, in this Agreement the obligations of any party consisting of more than one person are joint and several. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

ARTICLE II

THE OFFER

Section 2.01. The Offer. (a) Subject to the conditions of this Agreement, as promptly as practicable (and, in any event, not later than the third Business Day following the date hereof) after the date of this Agreement, Merger Subsidiary shall, and Parent shall cause Merger Subsidiary to, amend the Existing Offer to reflect the terms and conditions of this Agreement, including the purchase price of $26.50 per Share (including the associated Company Rights), net to the seller in cash, without interest thereon (the “Offer Price”), and to set December 28, 2004 or such later date that is 10 Business Days after the date of such amendment (the “Initial Expiration Date”), as the expiration date for the Offer. The obligations of Merger Subsidiary to, and of Parent to cause Merger Subsidiary to, accept for payment and pay for any Shares tendered pursuant to the Offer are subject only to the satisfaction or waiver by Merger Subsidiary of the conditions set forth in Exhibit A. Merger Subsidiary expressly reserves the right to waive any condition to the Offer or modify the terms of or conditions to the Offer, except that, without the consent of the Company, Merger Subsidiary shall not (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) waive or change the Minimum Condition, (iv) add to the conditions set forth in Exhibit A, (v) modify any condition set forth in Exhibit A or amend any term of the Offer set forth in this Agreement, in each case, in any manner adverse to the holders of Shares, (vi) extend the Offer or (vii) change the form of consideration. Notwithstanding the foregoing, (A) Merger Subsidiary shall extend the Offer (x) from time to time, for a period not to exceed 5 Business Days on each occasion, if at the scheduled or extended expiration date of the Offer the Minimum Condition shall not have been satisfied until such time as such condition is satisfied or waived or this Agreement is terminated or (y) from time to time for a period of 5 Business Days at a time (or such other period as the Company shall approve) if condition (a) set forth in Exhibit A shall not have been satisfied at the scheduled or any extended expiration date of the Offer, until such time as such condition is satisfied or waived or this Agreement is terminated and (B) without the consent of the Company, Merger Subsidiary shall have the right to extend the Offer (i) from time to time, for a period not to exceed 10 Business Days on each such occasion, if, at the scheduled or extended expiration date of the Offer, any of the other conditions to the Offer shall not have been satisfied or waived, until such conditions are satisfied or waived and (ii) for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer or any period required by applicable law. Following expiration of the Offer, Merger Subsidiary may, in its sole discretion, provide a subsequent offering period (“Subsequent Offering Period”) in accordance with Rule 14d-11 of the Exchange Act. Subject to the foregoing, including the requirements of Rule 14d-11, and upon the terms and subject to the conditions of the Offer, Merger Subsidiary shall, and Parent shall cause it to, accept for payment and pay for (i) all Shares validly tendered and not withdrawn pursuant to the Offer as promptly as practicable after the expiration of the Offer and (ii) all Shares validly tendered in the Subsequent Offering Period promptly following the valid tender thereof.

(b) As promptly as practicable after the date of this Agreement, Parent and Merger Subsidiary shall (i) amend the Tender Offer Statement on Schedule TO with respect to the Offer (together with all amendments and supplements thereto and including exhibits thereto, the “Schedule TO”) that was originally filed on June 9, 2003 to reflect the terms and conditions of this Agreement, and file such amendment (the “Schedule TO Amendment”) with the SEC, which shall contain an Amended and Restated Offer to Purchase reflecting the terms and conditions of this Agreement, and a revised form of the letter of transmittal and summary advertisement (collectively, together with any amendments or supplements thereto, the “Offer Documents”) and (ii) cause the Offer Documents to be disseminated to holders of Shares. Each of Parent, Merger Subsidiary and the Company shall promptly correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and each of Parent and Merger Subsidiary shall take all steps necessary to amend or supplement the Offer Documents and to cause the Offer Documents as so amended or supplemented to be filed with the SEC and to be disseminated to the Company’s stockholders, in each case as and to the extent required by applicable federal securities laws. Parent and Merger Subsidiary shall provide the Company and its counsel with any comments or other communications, whether written or oral, that Parent, Merger Subsidiary or their counsel may receive after the date of this Agreement from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments or other communications.

(c) Parent shall provide or cause to be provided to Merger Subsidiary on a timely basis the funds necessary to purchase any Shares that Merger Subsidiary becomes obligated to purchase pursuant to the Offer.

Section 2.02. Company Action. (a) The Company hereby consents to the Offer and represents that the Company Board, at a meeting duly called and held and acting on the unanimous recommendation of a special committee of the Company Board comprised entirely of independent directors (the “Transaction Committee”), has (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are fair to and in the best interests of the Company’s stockholders, (ii) approved and adopted this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance with the requirements of Delaware Law and (iii) subject to Section 7.04(b), resolved to recommend acceptance of the Offer and approval and adoption of this Agreement and the Merger by its stockholders.

The Company has been advised that all of its directors and executive officers who own Shares intend to tender their Shares pursuant to the Offer either prior to the Initial Expiration Date or prior to the expiration date of the Subsequent Offering Period, if any. The Company shall promptly furnish Parent with an updated list of its stockholders, mailing labels and any available listing or computer file containing the names and addresses of all record holders of Shares and lists of securities positions of Shares held in stock depositories, in each case as of the most recent practicable date, and

shall provide to Parent such additional information (including updated lists of stockholders, mailing labels and lists of securities positions) and such other assistance as Parent may reasonably request in connection with the Offer.

(b) As promptly as practicable (and, in any event, not later than the later of (i) the third Business Day following the date hereof and (ii) the date the Schedule TO Amendment is filed with the SEC), the Company shall file with the SEC an amendment reflecting the Company Board’s recommendation that the Company’s stockholders accept the Offer, the Company Board’s approval of this Agreement and otherwise reflecting the terms and conditions of this Agreement (the “Schedule 14D-9 Amendment”) to its Solicitation/Recommendation Statement on Schedule 14D-9 originally filed on June 12, 2003, with respect to the Offer, including (if Parent shall have theretofore provided the information required by the final sentence of Section 2.03(b)) an Information Statement (such Schedule 14D-9, as amended or supplemented from time to time, the “Schedule 14D-9”), and shall mail the Schedule 14D-9 Amendment and the Information Statement to the holders of Shares. Each of the Company, Parent and Merger Subsidiary shall promptly correct any information provided by it for use in the Schedule 14D-9 (including the Information Statement) if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall take all steps necessary to amend or supplement the Schedule 14D-9 (including the Information Statement) and to cause the Schedule 14D-9 (including the Information Statement) as so amended or supplemented to be filed with the SEC and disseminated to the Company’s stockholders, in each case as and to the extent required by applicable federal securities laws. The Company shall provide Parent and its counsel in writing with any comments or other communications, whether written or oral, that the Company or its counsel may receive after the date of this Agreement from the SEC or its staff with respect to the Schedule 14D-9 or the Information Statement promptly after the receipt of such comments or other communications.

Section 2.03. Directors. (a) Effective upon the acceptance for payment of any Shares pursuant to the Offer, Parent shall be entitled to designate the number of directors, rounded up to the next whole number, on the Company Board that equals the product of (i) the total number of directors on the Company Board (giving effect to the election of any additional directors pursuant to this Section) and (ii) the percentage that the number of Shares beneficially owned by Parent and/or Merger Subsidiary (including Shares accepted for payment) bears to the total number of Shares outstanding, and the Company shall take all action necessary to cause Parent’s designees to be elected or appointed to the Company Board, including increasing the number of directors, and seeking and accepting resignations of incumbent directors. At such time as such designees constitute a majority of the Board (the “Control Date”), the Company shall also use its best efforts to cause individuals designated by Parent to constitute the number of members, rounded up to the next whole number, on (i) each committee of the Company Board other than the Transaction Committee and (ii) each board of directors of each Subsidiary of the Company (and each committee thereof) that represents the same percentage as such individuals represent on the Company Board. (If Parent does not

exercise its rights under this Section, all references in this Agreement to the Control Date shall be deemed references to the Effective Time.) Notwithstanding the foregoing, until Parent and/or Merger Subsidiary acquires a majority of the outstanding Shares on a fully diluted basis, the Company shall use its reasonable efforts to ensure that all of the members of the Company Board and such committees and boards as of the date hereof who are not employees of the Company shall remain members of the Company Board and such committees and boards.

(b) The Company’s obligations to appoint Parent’s designees to the Company Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Subject to the Parent’s compliance with the final sentence of this Section 2.03(b), the Company shall promptly take all actions, and shall include in the Schedule 14D-9 an information statement (the “Information Statement”) containing such information with respect to the Company and its officers and directors, as Section 14(f) and Rule 14f-1 require in order to fulfill its obligations under this Section. Parent shall timely supply to the Company in writing and be solely responsible for any information with respect to itself and its nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1.

(c) Following the election or appointment of Parent’s designees pursuant to Section 2.03(a) and until the Effective Time, the approval of a majority of the directors of the Company then in office who were not designated by Parent shall be required to authorize (and such authorization shall constitute the authorization of the Company Board and no other action on the part of the Company, including any action by any other director of the Company, shall be required to authorize) any termination of this Agreement by the Company, any amendment of this Agreement, any extension of time for performance of any obligation or action hereunder by Parent or Merger Subsidiary and any waiver of compliance with any of the agreements or conditions contained herein for the benefit of the Company.

ARTICLE III

THE MERGER

Section 3.01. The Merger. (a) At the Effective Time, Merger Subsidiary shall be merged with and into the Company in accordance with Delaware Law, whereupon the separate existence of Merger Subsidiary shall cease, and the Company shall be the surviving corporation (the “Surviving Corporation”). At its election, Parent may substitute any of its direct or indirect wholly owned Delaware subsidiaries of Parent for Merger Subsidiary as a constituent corporation in the Merger (unless such substitution would prevent or delay a merger of Merger Subsidiary and the Company in accordance with Section 253 of Delaware Law that could otherwise occur). In such an event, the parties agree to execute an appropriate amendment to this Agreement in order to reflect such substitution.

(b) Upon the terms and subject to the conditions of this Agreement, the closing of the Merger (the “Closing”) shall take place at 10:00 a.m. on a date to be specified by the parties (the “Closing Date”), but in no event more than 2 Business Days after satisfaction of all conditions to the Merger, at the offices of Davis Polk & Wardwell, 1600 El Camino Real, Menlo Park, California 94025, unless the parties hereto agree in writing to another time, date or place.

(c) Upon the Closing, the Company and Merger Subsidiary shall file a certificate of merger with the Delaware Secretary of State and make all other filings or recordings required by Delaware Law in connection with the Merger. The Merger shall become effective at such time as the certificate of merger is duly filed with the Delaware Secretary of State or at such later time as is specified in the certificate of merger (the “Effective Time”).

(d) From and after the Effective Time, the Surviving Corporation shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Subsidiary, all as provided under Delaware Law.

Section 3.02. Conversion of Shares. At the Effective Time:

(a) except as otherwise provided in Section 3.02(b) or Section 3.04, each Share outstanding immediately prior to the Effective Time, together with the associated Company Rights, shall be converted into the right to receive $26.50 in cash or any higher price paid for each Share in the Offer, without interest (the “Merger Consideration”);

(b) each Share held by the Company as treasury stock (other than Shares in an Employee Plan of the Company) or owned directly by Parent or any of its Subsidiaries immediately prior to the Effective Time shall be canceled, and no payment shall be made with respect thereto;

(c) each Share held by any Subsidiary of the Company immediately prior to the Effective Time shall remain outstanding; and

(d) each share of common stock of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become one share of common stock of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

Section 3.03. Surrender and Payment. (a) Prior to the Effective Time, Parent shall appoint an agent (the “Exchange Agent”) for the purpose of exchanging for the Merger Consideration (i) certificates representing Shares (the “Certificates”) or (ii) uncertificated Shares (the “Uncertificated Shares”). Parent shall make available to the Exchange Agent, at or prior to the Effective Time, cash in amount sufficient to pay the Merger Consideration in respect of all Certificates and Uncertificated Shares (other than Dissenting Shares). Promptly after the Effective Time, Parent shall

send, or shall cause the Exchange Agent to send, to each holder of Shares at the Effective Time a letter of transmittal and instructions (which shall specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of the Certificates or transfer of the Uncertificated Shares to the Exchange Agent) for use in such exchange.

(b) Each holder of Shares that have been converted into the right to receive the Merger Consideration shall be entitled to receive, upon (i) surrender to the Exchange Agent of a Certificate, together with a properly completed letter of transmittal, or (ii) receipt of an “agent’s message” by the Exchange Agent (or such other evidence, if any, of transfer as the Exchange Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, the Merger Consideration payable for each Share represented by a Certificate or for each Uncertificated Share. Until so surrendered or transferred, as the case may be, each such Certificate or Uncertificated Share shall represent after the Effective Time for all purposes only the right to receive such Merger Consideration.

(c) If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate or the transferred Uncertificated Share is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Uncertificated Share shall be properly transferred and (ii) the Person requesting such payment shall pay to the Exchange Agent any transfer or other taxes required as a result of such payment to a Person other than the registered holder of such Certificate or Uncertificated Share or establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.

(d) After the Effective Time, there shall be no further registration of transfers of Shares. If, after the Effective Time, Certificates or Uncertificated Shares are presented to the Surviving Corporation, they shall be canceled and exchanged for the Merger Consideration provided for, and in accordance with the procedures set forth, in this Article III.

(e) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 3.03(a) (and any interest or other income earned thereon) that remains unclaimed by the holders of Shares six months after the Effective Time shall be returned to Parent, upon demand, and any such holder who has not exchanged such Shares for the Merger Consideration in accordance with this Section 3.03 prior to that time shall thereafter look only to Parent for payment of the Merger Consideration in respect of such Shares without any interest thereon. Notwithstanding the foregoing, Parent shall not be liable to any holder of Shares for any amount paid to a public official pursuant to applicable abandoned property, escheat or similar laws. Any amounts remaining unclaimed by holders of Shares three years after the Effective Time (or such earlier date immediately prior to such time when the amounts would otherwise escheat to or become property of any governmental authority) shall become, to the extent permitted by applicable law, the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.

(f) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 3.03(a) to pay for Shares for which appraisal rights have been perfected shall be returned to Parent, upon demand.

Section 3.04. Dissenting Shares. Notwithstanding Section 3.02, Shares outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing and who has demanded appraisal for such Shares in accordance with Delaware Law (“Dissenting Shares”) shall not be converted into a right to receive the Merger Consideration, unless such holder fails to perfect, withdraws or otherwise loses the right to appraisal. If, after the Effective Time, such holder fails to perfect, withdraws or loses the right to appraisal, such Shares shall be treated as if they had been converted as of the Effective Time into a right to receive the Merger Consideration and Parent shall promptly make available to the Exchange Agent sufficient cash to make all required payments with respect to such Shares. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of Shares, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands. Except with the prior written consent of Parent, the Company shall not voluntarily make any payment with respect to, or offer to settle or settle, any such demands.

Section 3.05. Stock Options and Restricted Stock. (a) As of the Effective Time, each stock option outstanding under any stock option or compensation plan or arrangement of the Company (each, a “Company Option”) that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall cease to represent a right to acquire Shares and shall be converted automatically into an option to purchase shares of Parent’ s common stock, par value $0.01 per share (“Parent Shares”), on substantially the same terms and conditions (including vesting schedule and any acceleration thereof pursuant to an Employee Plan as in effect on the date hereof) as applied to such Company Option immediately prior to the Effective Time, except that (i) the number of Parent Shares subject to each assumed Company Option shall be determined by multiplying the number of Shares subject to such Company Option by the Option Exchange Ratio, rounded down to the nearest whole share, and (ii) the exercise price per Parent Share subject to each assumed Company Option shall be determined by dividing the per share exercise price for the Shares otherwise purchasable pursuant to such Company Option by the Option Exchange Ratio, rounded up to the nearest whole cent. The “Option Exchange Ratio” means a fraction, the numerator of which is the Merger Consideration and the denominator of which is the average closing price of Parent Shares on the Nasdaq National Market over the ten trading days immediately preceding (but not including) the date on which the Effective Time occurs. In the case of a Company Option that purports or is intended to be an incentive stock option under Section 422 of the Code, the adjustments in this Section 3.05 shall be modified if necessary to permit such Company Option to continue to comply with Section 422 of the Code.

(b) Effective as of the Effective Time, each Share of restricted stock that is outstanding under any Company Plan (each, a Share of “Restricted Stock”) immediately prior to the Effective Time to the extent not vested on or

prior to the Effective Time shall be cancelled in exchange for an obligation of the Company to pay an amount equal to the Merger Consideration. Such amount shall be paid to the holder of such Share of Restricted Stock on the later to occur of (i) the date that such Share of Restricted Stock would have vested pursuant to the terms of the applicable Company Plan and any agreement with the holder or (ii) the date required to avoid the imposition of a tax on such holder pursuant to section 409A of the Code.

(c) Prior to the Effective Time, the Company shall (i) provide to Parent a schedule in the form maintained by the Company’s human resources or stock administration department for internal record keeping purposes that identifies as of the Effective Time with respect to each holder of Company Options and Shares of Restricted Stock, (A) the name of the holder, (B) the total number of Company Options and Shares of Restricted Stock held by such holder, (C) the Company Plan under which each Company Option and each Share of Restricted Stock was issued, (D) the exercise price of each Company Option, (E) the number of Company Options and Shares of Restricted Stock vested, (ii) use reasonable efforts to obtain any necessary consents from holders of Company Options and Shares of Restricted Stock if and to the extent requested by Parent and (iii) pass any resolutions and make any amendments to the terms of the Company’s stock option or compensation plans or arrangements that if and to the extent requested by Parent are reasonably necessary to give effect to the transactions contemplated by Section 3.05(a) and (b).

Section 3.06. Adjustments. If, during the period between the date of this Agreement and the Effective Time, any change in the outstanding Shares shall occur, including by reason of any reclassification, recapitalization, stock split or combination, exchange or readjustment of Shares, or stock dividend thereon with a record date during such period, the cash payable pursuant to the Offer, the Merger Consideration and any other amounts payable pursuant to this Agreement shall be appropriately adjusted.

Section 3.07. Withholding Rights. Each of the Surviving Corporation and Parent shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Article III, such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of federal, state, local or foreign tax law. If the Surviving Corporation or Parent, as the case may be, so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares in respect of which the Surviving Corporation or Parent, as the case may be, made such deduction and withholding.

Section 3.08. Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made

against it with respect to such Certificate, the Exchange Agent shall pay, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the Shares represented by such Certificate, as contemplated by this Article III.

ARTICLE IV

THE SURVIVING CORPORATION

Section 4.01. Certificate of Incorporation. The certificate of incorporation of the Company in effect at the Effective Time shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with applicable law; provided that, at the Effective Time, such certificate of incorporation shall be amended as set forth in Exhibit B.

Section 4.02. Bylaws. The bylaws of Merger Subsidiary in effect at the Effective Time shall be the bylaws of the Surviving Corporation until amended in accordance with applicable law.

Section 4.03. Directors and Officers. From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable law, (i) the directors of Merger Subsidiary at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of the Company at the Effective Time shall be the officers of the Surviving Corporation.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to each of Parent and Merger Subsidiary, except as set forth under any item in the disclosure schedule delivered by the Company simultaneously with the execution hereof (the “Company Disclosure Schedule”) or in the Company SEC Documents:

Section 5.01. Corporate Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which would not have, individually or in the aggregate, a Material Adverse Effect on the Company. True and complete copies of the certificate of incorporation and bylaws of the Company as currently in effect have been filed with the SEC prior to the date hereof.

Section 5.02. Corporate Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby are within the Company’s corporate powers and, except for the affirmative vote of the holders of a majority of the outstanding Shares in connection with the consummation of the Merger (if required by law), have

been duly authorized by all necessary corporate action on the part of the Company. The affirmative vote of the holders of a majority of the outstanding Shares (if required by law) is the only vote of the holders of any of the Company’s capital stock necessary in connection with the consummation of the Merger. This Agreement constitutes a valid and binding agreement of the Company.

Section 5.03. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby require no action by or in respect of, or filing with, any governmental body, agency, official or authority, domestic, foreign or supranational, other than (i) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) compliance with any applicable requirements of laws, rules and regulations analogous to the HSR Act existing in foreign jurisdictions, (iii) compliance with any applicable requirements of the Exchange Act and (iv) any actions or filings the absence of which would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on the Company or to impair materially the ability of the Company to consummate the transactions contemplated by this Agreement.

Section 5.04. Non-contravention. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in Section 5.03, contravene, conflict with, or result in a violation or breach of any provision of any applicable law, statute, ordinance, rule, regulation, judgment, injunction, order or decree, (iii) require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would become a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any of its Subsidiaries is entitled under any provision of any agreement or other instrument binding upon the Company or any of its Subsidiaries or any license, franchise, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the assets or business of the Company and its Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries, except for such contraventions, conflicts and violations referred to in clause (ii) and for such failures to obtain any such consent or other action, defaults, terminations, cancellations, accelerations, changes, losses or Liens referred to in clauses (iii) and (iv) that would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on the Company or to impair materially the ability of the Company to consummate the actions contemplated by this Agreement.

Section 5.05. Capitalization. (a) The authorized capital stock of the Company consists of (i) 700,000,000 Shares, of which 375,494,375 Shares (including 1,132,568 Shares of Restricted Stock) were outstanding as of November 30, 2004 and (ii) 2,000,000 shares of preferred stock, par value $0.01 per share, none of which are

outstanding. As of November 30, 2004, there were outstanding Company Options to purchase an aggregate of 69,422,758 Shares (of which Company Options to purchase an aggregate of 43,279,336 Shares were exercisable). Each outstanding Company Option and each Share of Restricted Stock was issued pursuant to a Company Plan. All outstanding shares of capital stock of the Company have been, and all shares that may be issued pursuant to the Company Plans will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued and are or then will be fully paid and nonassessable.

(b) Except (x) as set forth in this Section 5.05, (y) for the rights (the “Company Rights”) issued pursuant to the Company’s First Amended and Restated Preferred Share Rights Agreement, effective as of December 16, 1997 and amended as of December 26, 2002, between the Company and EquiServe Trust Company, N.A. (the “Rights Agreement”) and (z) for changes since November 30, 2004 resulting from the exercise of Company Options outstanding on such date, there are no outstanding (i) shares of capital stock of or other voting securities or ownership interests in the Company, (ii) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or other voting securities or ownership interests in the Company or (iii) options, warrants, calls, subscriptions, preemptive or other rights to acquire from the Company or any of its Subsidiaries, or other obligation of the Company or any of its Subsidiaries to issue, any capital stock of or other voting securities or ownership interests in, or any securities convertible into or exchangeable for capital stock or other voting securities or ownership interests in, the Company (the items in clauses (i), (ii) and (iii) being referred to collectively as the “Company Securities”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Securities. There are no voting trusts, proxies or other similar agreements or understandings to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound with respect to the voting of any Company Securities. There are no contractual obligations or commitments of any character restricting the transfer of, or requiring the registration for sale of, any Company Securities.

Section 5.06. Subsidiaries. (a) Each Subsidiary of the Company is a corporation or other legal entity duly incorporated, validly existing and, if applicable, in good standing under the laws of its jurisdiction of incorporation or organization, has all corporate or similar powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for such failures which would not have, individually or in the aggregate, a Material Adverse Effect on the Company. All Significant Subsidiaries (as defined in Regulation S-X under the Exchange Act) of the Company and their respective jurisdictions of incorporation are identified in the Company 10-K.

(b) All of the outstanding capital stock of or other voting securities or ownership interests in each Subsidiary of the Company is owned by the Company, directly or indirectly, free and clear of any Lien and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities or ownership interests). There are no outstanding (i) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock of or other voting securities or ownership interests in any Subsidiary of the Company or (ii) options, warrants, calls, subscriptions, preemptive or other rights to acquire from the Company or any of its Subsidiaries, or other obligation of the Company or any of its Subsidiaries to issue, any capital stock of or other voting securities or ownership interests in, or any securities convertible into or exchangeable for any capital stock of or other voting securities or ownership interests in, any Subsidiary of the Company (the items in clauses (i) and (ii) being referred to collectively as the “Company Subsidiary Securities”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Subsidiary Securities. There are no voting trusts, proxies or other similar agreements or understandings to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound with respect to the voting of any Company Subsidiary Securities. There are no contractual obligations or commitments of any character restricting the transfer of, or requiring the registration for sale of, any Company Subsidiary Securities.

(c) Except for its Subsidiaries, the Company does not own, directly or indirectly, any material equity or other material ownership interest in any corporation, partnership, joint venture or other entity or enterprise.

Section 5.07. SEC Filings. (a) The Company has filed all required reports, schedules, forms, statements and other documents with the SEC since January 1, 2002 (collectively, the “Company SEC Documents”).

(b) As of its filing date, each Company SEC Document complied, and each such Company SEC Document filed subsequent to the date hereof but prior to the Control Date will comply, as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as the case may be.

(c) As of its filing date, each Company SEC Document filed pursuant to the Exchange Act did not, and each such Company SEC Document filed subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except that information as of a later date (but prior to the date hereof) shall be deemed to modify information as of an earlier date.

(d) Each Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such statement or amendment became effective, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(e) No Subsidiary of the Company is required to file any reports, schedules, forms, statements or other documents with the SEC.

Section 5.08. Financial Statements and Internal Controls. (a) The audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included in the Company SEC Documents fairly present, in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis (except as may be indicated in the notes thereto), the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject, in the case of interim financial statements, to the condensation or omission of certain information and footnote disclosures as permitted under the Exchange Act).

(b) The Company has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To the knowledge of the Company based on its evaluation of internal controls prior to the date hereof, such disclosure controls and procedures are currently effective in timely alerting the Company’s principal executive officer and principal financial officer to material information required to be included in the Company’s periodic reports required under the Exchange Act.

(c) The Company has established and maintains a system of internal control over financial reporting (as defined in Rule 13a-15 under the Exchange Act) (“internal controls”). To the knowledge of the Company based on its evaluation of internal controls prior to the date hereof, such internal controls are sufficient to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of Company financial statements for external purposes in accordance with GAAP. The Company has disclosed, based on its most recent evaluation of internal controls prior to the date hereof, to the Company’s auditors and audit committee (i) any significant deficiencies and material weaknesses known to the Company in the design or operation of internal controls which are reasonably likely to adversely affect in a material respect the Company’s ability to record, process, summarize and report financial information and (ii) any material fraud known to the Company that involves management or other employees who have a significant role in internal

controls. The Company has made available to Parent a summary of any such disclosure regarding material weaknesses and fraud made by management to the Company’s auditors and audit committee since December 31, 2003.

(d) There are no outstanding loans made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company.

(e) As of the date hereof, the Company has no reason to believe that, in connection with the audit of the Company’s financial statements that would be prepared in respect of the year ended December 31, 2004, an independent auditor would be unable to attest that the Company has maintained effective internal controls over financial reporting pursuant to Auditing Standard No. 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements (File No. PCAOB-2004-3).

Section 5.09. Disclosure Documents. (a) Each document required to be filed by the Company with the SEC or required to be distributed or otherwise disseminated to the Company’s stockholders after the date hereof in connection with the transactions contemplated by this Agreement (the “Company Disclosure Documents”), including the Schedule 14D-9 (including the Information Statement), the proxy or information statement of the Company (the “Company Proxy Statement”), if any, to be filed with the SEC in connection with the Merger, and any amendments or supplements thereto, when filed, distributed or disseminated, as applicable, will comply as to form in all material respects with the applicable requirements of the Exchange Act.

(b) (i) The Company Proxy Statement, as supplemented or amended, if applicable, at the time such Company Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company and at the time such stockholders vote on adoption of this Agreement, and (ii) any Company Disclosure Document (other than the Company Proxy Statement), at the time of the filing of such Company Disclosure Document or any supplement or amendment thereto, at the time of any distribution or dissemination thereof and at the time of the consummation of the Offer, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties contained in this Section 5.09(b) will not apply to statements or omissions included in the Company Disclosure Documents based upon information furnished to the Company in writing by Parent specifically for use therein.

(c) The information with respect to the Company or any of its Subsidiaries that the Company furnishes to Parent specifically for use in the Schedule TO and the Offer Documents, at the time of the filing of the Schedule TO, at the time of any distribution or dissemination of the Offer Documents and at the time of the consummation of the Offer, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to

make the statements made therein, in the light of the circumstances under which they were made, not misleading.

Section 5.10. Absence of Certain Changes. Since the Company Balance Sheet Date, the business of the Company and its Subsidiaries has been conducted in the ordinary course consistent with past practices (except in connection with the Offer and any earlier offer since June 6, 2003 by Merger Subsidiary to purchase all of the Shares), and there has not been:

(a) as of the date of this Agreement, any event, occurrence, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company;

(b) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company, or any repurchase, redemption or other acquisition by the Company or any of its Subsidiaries of any outstanding shares of capital stock or other securities of, or other ownership interests in, the Company or any of its Subsidiaries (other than in connection with the cashless exercise of any employee stock options or share withholding);

(d) any incurrence, assumption or guarantee by the Company or any of its Subsidiaries of any indebtedness for borrowed money other than in the ordinary course of business and in amounts and on terms consistent with past practices;

(e) any creation or other incurrence by the Company or any of its Subsidiaries of any Lien on any material asset other than in the ordinary course of business consistent with past practices;

(f) any making of any material loan, advance or capital contributions to or investment in any Person other than loans, advances or capital contributions to or investments in its wholly-owned Subsidiaries;

(g) as of the date of this Agreement, any damage, destruction or other casualty loss (whether or not covered by insurance) affecting the business or assets of the Company or any of its Subsidiaries that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company;

(h) any transaction or commitment made, or any contract or agreement entered into, by the Company or any of its Subsidiaries relating to its assets or business (including the acquisition or disposition of any assets and the licensing to or by the Company of intellectual property) or any relinquishment by the

Company or any of its Subsidiaries of any contract or other right, in either case, that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, other than transactions and commitments in the ordinary course of business consistent with past practices and those contemplated by this Agreement;

(i) any change in any method of accounting or accounting principles or practice by the Company or any of its Subsidiaries, except for any such change required by reason of a change in GAAP or Regulation S-X under the Exchange Act;

(j) any material capital expenditure, or commitment for a material capital expenditure, for additions or improvements to property, plant and equipment other than in the ordinary course of business consistent with the past practices;

(k) as of the date of this Agreement, any cancellation of any licenses, sublicenses, franchises, permits or agreements to which the Company or any of its Subsidiaries is a party, or any notification to the Company or any of its Subsidiaries that any party to any such arrangements intends to cancel or not renew such arrangements beyond their expiration date as in effect on the date hereof, which cancellation or notification has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company;

(l) other than to satisfy existing contractual obligations in effect on the Company Balance Sheet Date, any (i) grant of any severance or termination pay to (or amendment to any existing arrangement with) any (A) non-officer employee of the Company or any of its Subsidiaries, other than grants in the ordinary course of business consistent with past practice, or (B) any director or officer of the Company, (ii) increase in benefits payable under any existing severance or termination pay policies or employment agreements, (iii) any entering into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any (A) non-officer employee of the Company or any of its Subsidiaries other than the entrance into any such agreement in the ordinary course of business consistent with past practice, or (B) director or officer of the Company, (iv) establishment, adoption or amendment (except as required by applicable law or as would not materially increase the benefits under or aggregate costs incurred by the Company and its Subsidiaries under the applicable plan) of any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of the Company or any of its Subsidiaries or (v) other than as expressly contemplated by Section 8.04(c) or (d) of this Agreement, increase in compensation, bonus or other benefits payable to any (A) non-officer employee of the Company or any of its Subsidiaries, other than increases in the ordinary course

of business consistent with past practice, or (B) director or officer of the Company; or

(m) any Tax election made or changed, any annual tax accounting period changed, any method of tax accounting adopted or changed, any amended Tax Returns or claims for Tax refunds filed, any closing agreement entered into, any Tax claim, audit or assessment settled, or any right to claim a material Tax refund, offset or other reduction in Tax liability surrendered, in each case to the extent such action is materially adverse to the Company.

Section 5.11. No Undisclosed Material Liabilities. As of the date of this Agreement, there are no liabilities or obligations of the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, required by GAAP to be set forth on a consolidated balance sheet of the Company and its consolidated Subsidiaries or in the notes thereto, other than:

(a) liabilities or obligations disclosed and provided for in the Company Balance Sheet or in the notes thereto or in the Company SEC Documents filed prior to the date hereof, and

(b) liabilities or obligations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

Section 5.12. Customer Obligations. (a) The descriptions of the scope of, and potential amounts payable under, the Company’s Customer Assurance Provisions contained in the Company SEC Documents are accurate in all material respects.

(b) Since the Company Balance Sheet Date, neither the Company nor its Subsidiaries have (i) materially modified the standard terms and conditions of support services offered to customers in connection with the licensing of products of the Company or its Subsidiaries or (ii) changed in any material respect the frequency or quality of updates to products of the Company or its Subsidiaries in comparison to the frequency and quality of updates delivered in the most recent major release cycle completed prior to the date of this Agreement.

Section 5.13. Compliance with Laws and Court Orders. The Company and each of its Subsidiaries is in compliance with, and to the knowledge of the Company is not under investigation with respect to and, since January 1, 2004, has not been threatened to be charged with or given notice of any violation of, any applicable law, statute, ordinance, rule, regulation, judgment, injunction, order or decree, except for failures to comply or violations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

Section 5.14. Litigation. As of the date of this Agreement, there is no action, suit, investigation or proceeding pending against, or, to the knowledge of the Company, threatened against the Company, any of its Subsidiaries or any present or former officer or director (in such officer’s or director’s capacity as such) of the

Company or any of its Subsidiaries before any court or arbitrator or before or by any governmental body, agency or official, domestic, foreign or supranational, that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company or that in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Offer or the Merger or any of the other transactions contemplated hereby.

Section 5.15. Finders’ Fees. Except for Citigroup Global Markets Inc. and Goldman, Sachs & Co. (each, a “Financial Advisor”), there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries who might be entitled to any fee or commission from the Company or any of its Affiliates in connection with the transactions contemplated by this Agreement.

Section 5.16. Opinion of Financial Advisors. Each Financial Advisor has delivered to the Company Board its opinion that, as of the date such opinion was delivered, the consideration to be received in the Offer and the Merger is fair, from a financial point of view, to the holders of Shares (other than Parent, Merger Subsidiary and their respective Affiliates) (each, a “Financial Adviser Opinion”). The Company has been authorized by each Financial Advisor to permit the inclusion of a copy of its Financial Adviser Opinion in the Schedule 14D-9. As of the date of this Agreement, neither Financial Advisor Opinion has been withdrawn, revoked or modified. The Company will make available to Parent for informational purposes a true and complete copy of each Financial Adviser Opinion.

Section 5.17. Change of Control Arrangements. The Company has heretofore made available to Parent a true and complete copy of each Employee Plan not filed with the SEC, including any amendments, pursuant to which the consummation by the Company of the transactions contemplated by this Agreement might (either alone or together with any other event) entitle any current or former officer, employee or independent contractor of the Company or any of its Subsidiaries to severance, bonus or other pay or accelerate the time of payment or vesting or trigger any payment of funding (through a grantor trust or otherwise) of compensation or benefits or might increase the amount payable or trigger any other material obligation pursuant to any Employee Plan other than any such Employee Plans applicable to the Company’s or its Subsidiaries’ non-U.S. employees (the “Foreign Severance Plans”) which the Company will make available as promptly as practicable after the date hereof.

Section 5.18. Antitakeover Statutes and Rights Agreement. (a) The Company has taken all action necessary to exempt the Offer, the Merger and this Agreement and the transactions contemplated hereby from the provisions of Section 203 of Delaware Law, and, accordingly, such Section will not apply to any such transactions. To the knowledge of the Company, no other “control share acquisition,” “fair price,” “moratorium” or other antitakeover laws or regulations enacted under U.S. state or federal laws apply to this Agreement or any of the transactions contemplated hereby.

(b) The Company has taken all action necessary to (i) render the Company Rights issued pursuant to the terms of the Rights Agreement inapplicable to the Offer, the Merger and this Agreement and the transactions contemplated hereby and (ii) ensure that (A) neither Parent, Merger Subsidiary nor any of their Affiliates is an Acquiring Person (as defined in the Rights Agreement), (B) none of a Distribution Date, Stock Acquisition Date or Section 13 Event (each as defined in the Rights Agreement) shall occur by reason of the approval or execution of this Agreement, the announcement or consummation of the Offer or Merger or the consummation of any of the other transactions contemplated by this Agreement and (C) the Rights shall expire immediately prior to the acceptance of any Shares for payment pursuant to the Offer.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PARENT

Parent represents and warrants to the Company that:

Section 6.01. Corporate Existence and Power. Each of Parent and Merger Subsidiary is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which would not have, individually or in the aggregate, a Material Adverse Effect on Parent. True and complete copies of the certificate of incorporation and bylaws of the Company as currently in effect have been filed with the SEC prior to the date hereof. Parent has heretofore made available to the Company true and complete copies of the certificate of incorporation and bylaws of Merger Subsidiary as currently in effect. Since the date of its incorporation, Merger Subsidiary has not engaged in any activities other than in connection with or as contemplated by this Agreement or in connection with arranging any financing required to consummate the transactions contemplated hereby.

Section 6.02. Corporate Authorization. The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby are within the corporate powers of Parent and Merger Subsidiary and have been duly authorized by all necessary corporate action. This Agreement constitutes a valid and binding agreement of each of Parent and Merger Subsidiary.

Section 6.03. Governmental Authorization. The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby require no action by or in respect of, or filing with, any governmental body, agency, official or authority, domestic, foreign or supranational, other than (i) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which Parent is

qualified to do business, (ii) compliance with any applicable requirements of laws, rules and regulations analogous to the HSR Act existing in foreign jurisdictions, (iii) compliance with any applicable requirements of the Exchange Act and any other applicable securities or takeover laws, whether state or foreign and (iv) any actions or filings the absence of which would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on Parent or to impair materially the ability of Parent and Merger Subsidiary to consummate the transactions contemplated by this Agreement.

Section 6.04. Non-contravention. The execution, delivery and performance by each of Parent and Merger Subsidiary of this Agreement and the consummation by each of Parent and Merger Subsidiary of the transactions contemplated hereby do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of Parent or Merger Subsidiary or (ii) assuming compliance with the matters referred to in Section 6.03, contravene, conflict with, or result in a violation or breach of any provision of any applicable law, statute, ordinance, rule, regulation, judgment, injunction, order or decree, except for such contraventions, conflicts and violations referred to in clause (ii) that would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on Parent or to impair materially the ability of the Parent and Merger Subsidiary to consummate the actions contemplated by this Agreement.

Section 6.05. Disclosure Documents. (a) The information with respect to Parent and any of its Subsidiaries that Parent furnishes to the Company in writing specifically for use in any Company Disclosure Document will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading (i) in the case of the Company Proxy Statement, as supplemented or amended, if applicable, at the time such Company Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company and at the time such stockholders vote on adoption of this Agreement, and (ii) in the case of any Company Disclosure Document other than the Company Proxy Statement, at the time of the filing of such Company Disclosure Document or any supplement or amendment thereto, at the time of any distribution or dissemination thereof and at the time of the consummation of the Offer.

(b) The Schedule TO, when filed, and the Offer Documents, when distributed or disseminated, will comply as to form in all material respects with the applicable requirements of the Exchange Act and, at the time of such filing, at the time of such distribution or dissemination and at the time of consummation of the Offer, will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; provided that this representation and warranty will not apply to statements or omissions included in the Schedule TO and the Offer Documents based upon information furnished to Parent or Merger Subsidiary by the Company specifically for use therein.

Section 6.06. Finders’ Fees. Except for Credit Suisse First Boston LLC, whose fees will be paid by Parent, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Parent who might be entitled to any fee or commission from the Company or any of its Affiliates upon consummation of the transactions contemplated by this Agreement.

Section 6.07. Financing. Parent has and at the expiration of the Offer will have, and will make available to Merger Subsidiary, sufficient cash, available lines of credit or other sources of immediately available funds to enable Merger Subsidiary to purchase all of the Shares outstanding on a fully-diluted basis.

ARTICLE VII

COVENANTS OF THE COMPANY

The Company agrees that:

Section 7.01. Conduct of the Company. (a) From the date hereof until the Control Date the Company and its Subsidiaries shall conduct their business in the ordinary course consistent with past practice and, to the extent consistent therewith and with the Company’s other obligations under this Agreement, shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, except for matters set forth in Section 7.01 of the Company Disclosure Schedule or otherwise expressly permitted by this Agreement, from the date hereof until the Effective Time, without the prior written consent of Parent:

(b) the Company shall not adopt or propose any change to its certificate of incorporation or bylaws;

(c) the Company shall not, and shall not permit any of its Subsidiaries to, merge or consolidate with any other Person or acquire a material amount of stock or assets of any other Person;

(d) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any material subsidiary or material amount of assets, securities or property except (i) pursuant to existing contracts or commitments and (ii) in the ordinary course consistent with past practices;

(e) except to the extent consistent with the ordinary course of business consistent with past practice, Company shall not, and shall not permit any of its Subsidiaries to, materially modify the standard terms and conditions of support services offered in connection with the licensing of products of the Company or its Subsidiaries to customers or change the frequency or quality of updates to products of the Company or its Subsidiaries in comparison to the frequency and quality of updates delivered in the most major release cycle completed prior to the date of this Agreement;

(f) the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any severance or termination pay to (or amendment to any existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries other than pursuant to Employee Plans as in effect on the date hereof, (ii) increase benefits payable under any existing severance or termination pay policies or employment agreements, (iii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of the Company or any of its Subsidiaries (other than agreements with new non-officer employees entered into in the ordinary course of business consistent with past practice that do not provide for severance or change in control benefits), (iv) establish, adopt or amend (except as required by applicable law or immaterial amendments that do not increase benefits or costs under such plan) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of the Company or any of its Subsidiaries or (v) other than as expressly contemplated by Section 8.04(c) or (d), increase compensation, bonus or other benefits payable to any director, officer or employee of the Company or any of its Subsidiaries;

(g) the Company shall not, and shall not permit any of its Subsidiaries to, intentionally (i) take any action that would make any representation and warranty of the Company hereunder inaccurate in any respect at, or as of any time prior to, the Control Date or (ii) omit to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time, in either case, which inaccuracy would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company; and

(h) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.

Section 7.02. Stockholder Meeting; Proxy Material. The Company shall cause a meeting of its stockholders (the “Company Stockholder Meeting”) to be duly called and held as soon as reasonably practicable after consummation of the Offer for the purpose of voting on the approval and adoption of this Agreement and the Merger, unless Delaware Law does not require a vote of stockholders of the Company for consummation of the Merger. Subject to Section 7.04(b), the Company Board shall recommend approval and adoption of this Agreement and the Merger by the Company’s stockholders. In connection with such meeting, the Company shall (i) promptly prepare and file with the SEC and, after using its reasonable best efforts to respond to all SEC comments, shall thereafter mail to its stockholders as promptly as practicable the Company Proxy Statement and all other proxy materials for such meeting, (ii) subject to Section 7.04(b), use its reasonable best efforts to obtain the necessary approval by its stockholders of this Agreement and the transactions contemplated hereby and (iii) otherwise comply with all legal requirements applicable to such meeting.

Section 7.03. Access to Information. From the date hereof until the earlier of (A) Effective Time and (B) the termination of this Agreement pursuant to Section 11.01, and subject to applicable law and the Confidentiality Agreement dated as of December 11, 2004 between the Company and Parent (the “Confidentiality Agreement”), the Company shall (i) give Parent, its counsel, financial advisors, auditors and other authorized representatives reasonable access during normal business hours to the offices, properties, books and records of the Company and its Subsidiaries, (ii) furnish to Parent, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information as such Persons may reasonably request and (iii) instruct the employees, counsel, financial advisors, auditors and other authorized representatives of the Company and its Subsidiaries to cooperate reasonably with Parent in its investigation of the Company and its Subsidiaries. Any investigation pursuant to this Section shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the Company and its Subsidiaries. No information or knowledge obtained by Parent in any investigation pursuant to this Section shall affect or be deemed to modify any representation or warranty made by the Company hereunder.

Section 7.04. No Solicitation; Other Offers. (a) Neither the Company nor any of its Subsidiaries shall, nor shall the Company or any of its Subsidiaries authorize or permit any of its or their officers, directors, employees, investment bankers, attorneys, accountants, consultants or other agents or advisors to, directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to, otherwise cooperate in any way with, or knowingly assist, participate in, facilitate or encourage any effort by any Third Party that is seeking to make, or has made, an Acquisition Proposal, (iii) grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries, (iv) take any action to render the Company Rights issued pursuant to the terms of the Rights Agreement inapplicable to an Acquisition Proposal or the transactions contemplated thereby, exempt or exclude any person from the definition of an Acquiring Person (as defined by the Rights Agreement) under the terms of the Rights Agreement or, other than as contemplated by this Agreement in connection with the Offer, allow the Company Rights to expire prior to their expiration date or (v) enter into any agreement with respect to an Acquisition Proposal.

(b) Notwithstanding the foregoing, the Company Board, directly or indirectly through advisors, agents or other intermediaries, may (i) engage in negotiations or discussions with any Third Party that, without prior solicitation after the date hereof by the Company, has made a bona fide Acquisition Proposal that the Company Board reasonably believes will lead to a Superior Proposal, (ii) furnish to such Third Party nonpublic information relating to the Company or any of its Subsidiaries pursuant to a confidentiality agreement with terms no less favorable in the aggregate to the Company than those contained in the

Confidentiality Agreement (a copy of which shall be provided simultaneously to Parent for informational purposes only), (iii) following receipt of a Superior Proposal, fail to make, withdraw or modify in a manner adverse to Parent its recommendation to its stockholders referred to in Sections 2.02 and 7.02 hereof and/or (iv) take any nonappealable, final action that any court of competent jurisdiction orders the Company to take, but in each case referred to in the foregoing clauses (i) through (iii) only if the Company Board determines in good faith by a majority vote of independent directors, after consultation with Gibson Dunn & Crutcher LLP or Cleary, Gottlieb, Steen & Hamilton, outside legal counsel to the Company, that it must take such action to comply with its fiduciary duties under applicable law. Nothing contained herein shall prevent the Company Board from complying with Rule 14e-2(a) under the Exchange Act with regard to an Acquisition Proposal.

(c) The Company Board shall not take any of the actions referred to in clauses (b)(i) through (b)(iii) of the preceding subsection unless the Company shall have delivered to Parent a prior written notice advising Parent that it intends to take such action, and the Company shall continue to advise Parent after taking such action. In addition, the Company shall notify Parent promptly (but in no event later than 24 hours) after receipt by the Company of any Acquisition Proposal, any material modification of such proposal or any request for information relating to the Company or any of its Subsidiaries or for access to the business, properties, assets, books or records of the Company or any of its Subsidiaries by any Third Party that, to the knowledge of the Company, is considering making, or has made, an Acquisition Proposal. The Company shall provide such notice orally and in writing and shall identify the Third Party making, and the material terms and conditions of, any such Acquisition Proposal, indication or request. The Company shall keep Parent fully informed, on a current basis, of the status and details of any such Acquisition Proposal, indication or request. The Company shall, and shall cause its Subsidiaries and the advisors, employees and other agents of the Company and any of its Subsidiaries to, cease immediately and cause to be terminated any and all existing activities, discussions and negotiations, if any, with any Third Party conducted prior to the date hereof with respect to any Acquisition Proposal and shall use its reasonable best efforts to cause any such Third Party (or its agents or advisors) in possession of confidential information about the Company that was furnished by or on behalf of the Company to return or destroy all such information.

“Superior Proposal” means any bona fide, unsolicited written Acquisition Proposal for at least a majority of the outstanding Shares on terms that the Company Board determines in good faith by a majority vote, after consultation with one or both of its Financial Advisors and taking into account all the terms and conditions of the Acquisition Proposal, including any break-up fees, expense reimbursement provisions and conditions to consummation, are more favorable and provide greater value to the Company’s stockholders than as provided hereunder and for which financing, to the extent required, is then fully committed or reasonably determined to be available by the Company Board.

Section 7.05. Notices of Certain Events. (a) The Company shall promptly notify Parent of:

(i) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(ii) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement;

(iii) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against the Company or any of its Subsidiaries that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Sections 5.13 or 5.14, as the case may be;

(iv) the occurrence, or non-occurrence, of any event the occurrence or non-occurrence of which would be reasonably expected to cause any representation or warranty of the Company contained herein to be untrue or inaccurate at any time during the period commencing on the date hereof and ending at the expiration of the Offer; and

(v) any material failure of the Company to comply with or satisfy any material covenant, condition or agreement to be complied with or satisfied by it hereunder. The delivery of any notice pursuant to this Section 7.05(a) shall not limit or otherwise affect the remedies available hereunder to Parent.

(b) Parent shall promptly notify the Company of:

(i) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement;

(ii) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against the Company or any of its Subsidiaries that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Sections 5.13 or 5.14, as the case may be;

(iii) the occurrence, or non-occurrence, of any event the occurrence or non-occurrence of which would be reasonably expected to cause any representation or warranty of Parent or Merger Subsidiary contained herein to be untrue or inaccurate at any time during the period commencing on the date hereof and ending at the Effective Time; and

(iv) any material failure of Parent or Merger Subsidiary to comply with or satisfy any material covenant, condition or agreement to be complied with or satisfied by it hereunder. The delivery of any notice pursuant to this Section 7.05(b) shall not limit or otherwise affect the remedies available hereunder to the Company.

Section 7.06. Company ESPP. The Company shall take all action that is necessary to (i) cause the exercise of each outstanding purchase right under the Company Employee Stock Purchase Plan (the “Company ESPP”) prior to the Effective Time; and (ii) provide that no further purchase period or offering period shall commence under the Company ESPP following that date. Immediately prior to and effective as of the Effective Time and subject to the consummation of the Merger, the Company shall terminate the Company ESPP.

Section 7.07. 401(k) Plans. Effective as of the day immediately preceding the Effective Time, the Company shall terminate any and all 401(k) plans sponsored or maintained by the Company, unless Parent provides written notice to the Company at least five Business Days prior to the Effective Time that any such 401(k) plan shall not be terminated; provided that Parent shall cause the Company to make full contributions to the 401(k) plan for the 401(k) plan year as required under the terms of the 401(k) plan, irrespective of whether Parent requests the termination of the 401(k) plan. At the Closing, Parent shall receive from the Company evidence that each of the Company’s 401(k) plans has been terminated pursuant to resolutions of the Company Board.

ARTICLE VIII

COVENANTS OF PARENT

Parent agrees that:

Section 8.01. Obligations of Merger Subsidiary. Parent shall take all action necessary to cause Merger Subsidiary to perform its obligations under this Agreement and to consummate the Offer and the Merger on the terms and conditions set forth in this Agreement.

Section 8.02. Voting of Shares. Parent shall vote all Shares beneficially owned by it or any of its Subsidiaries in favor of adoption of this Agreement at the Company Stockholder Meeting.

Section 8.03. Director and Officer Liability. Parent shall, or shall cause the Surviving Corporation, to do the following:

(a) From and after the Control Date, Parent shall, or shall cause the Surviving Corporation to, indemnify and hold harmless the present and former officers and directors of the Company and its Subsidiaries (each an “Indemnified Person”) in respect of acts or omissions occurring at or prior to the Effective Time to the fullest extent permitted by Delaware Law or any other applicable

laws (including, without limitation, the advancement of reasonable attorney’s fees and disbursements, which shall be paid, reimbursed or advanced by Parent or the Surviving Corporation prior to the final disposition thereof without the requirement of any bond or other security). Parent agrees that all rights to indemnification, expense advancement and exculpation existing in favor of the present and former directors and officers of the Company and its Subsidiaries as provided in the Company’s or any such Subsidiary’s certificate of incorporation and bylaws or existing indemnification agreements, as in effect as of the date hereof, with respect to matters occurring through the Effective Time, shall survive the Merger and shall continue in full force and effect, without any amendment that would adversely affect the rights thereunder of the individuals who on or at any time prior to the Effective Time were entitled to rights thereunder.

(b) For six years after the Effective Time, Parent shall, or shall cause the Surviving Corporation to, provide officers’ and directors’ liability insurance in respect of acts or omissions occurring prior to the Effective Time covering each such Indemnified Person currently covered by the Company’s officers’ and directors’ liability insurance policy on terms no less favorable to each such Indemnified Person than those of such policy in effect on the date hereof; provided that, in satisfying its obligation under this Section 8.03(b), Parent or the Surviving Corporation shall not be obligated to pay an annual premium in excess of 300% of the aggregate annual amounts currently paid by the Company to maintain the policy in effect as of the date hereof (the “Maximum Premium”); and provided, further, that if equivalent coverage can be obtained only by paying an annual premium in excess of the Maximum Premium, Parent or the Surviving Corporation shall be required to obtain the most advantageous policies of directors’ and officers’ liability insurance obtainable for an annual premium equal to the Maximum Premium; and provided, further, that if such insurance policies cannot be obtained at all, Parent or the Surviving Corporation shall be required to purchase all available extended reporting periods with respect to pre-existing insurance in an amount that, together with all other policies purchased pursuant to this Section 8.03(b), does not exceed the amount equal to the Maximum Premium multiplied by six.

(c) If Parent, the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 8.03.

(d) The rights of each Indemnified Person under this Section 8.03 shall be in addition to any rights such Person may have under the certificate of incorporation or bylaws of the Company or any of its Subsidiaries, under Delaware Law or any other applicable laws or under any agreement of any Indemnified Person with the Company or any of its Subsidiaries. These rights

shall survive consummation of the Merger and are intended to benefit, and shall be enforceable by, each Indemnified Person.

Section 8.04. Severance and Benefit Plans; Bonuses. (a) Each Employee Plan in which any current or former employee of the Company or any of its ERISA Affiliates participates immediately prior to the Effective Time shall become the obligations of Parent and the Surviving Corporation at the Effective Time and, for at least one year thereafter, Parent shall, or shall cause the Surviving Corporation to either maintain the Employee Plans (including incentive compensation arrangements), with such modifications as are necessary to replicate, or integrate with, Parent’s benefits plans for its employees (provided that this shall not give Parent the right to amend the Severance Plans or Foreign Severance Plans) or provide benefits under Parent Plans (as defined below) that are at least as favorable, in the aggregate, to the benefits provided to the Parent employees, considered as a group, under the Parent Plans as in effect immediately prior to the Effective Time. Without limiting the generality of the foregoing, from the Effective Time and for at least one year thereafter, Parent shall, or shall cause the Surviving Corporation to: (A) continue the (i) Executive Severance Policy – Presidents, Co-Presidents and Executive Vice Presidents, (ii) Executive Severance Policy – Senior Vice Presidents, (iii) Executive Severance Policy – Group Vice Presidents, (iv) Vice President Severance Benefit Plan and (v) Employee Severance Benefit Plan and any Foreign Severance Plans (collectively, the “Severance Plans”) as adopted or in effect for Company employees on the date hereof and each as previously provided in writing to Parent or, with respect to the Foreign Severance Plans, as provided to Parent in writing as promptly as practicable after the date hereof, (B) assume and honor any and all obligations of the Company under the Severance Plans and any individual severance or employment agreements by and between the Company or any of its Subsidiaries and any of their respective officers and employees, as such Severance Plans and agreements exist and are in effect as of the date hereof and (C) provide any employee of the Company whose employment is terminated during the period beginning on the Control Date through the one year anniversary of the Closing Date with outplacement assistance on the terms and conditions set forth in the Severance Plan applicable to such employee or, if no such outplacement assistance is set forth in the applicable Severance Plan, on terms and conditions consistent with that customarily provided to employees of that level by the Company prior to the Closing.

(b) With respect to any employee benefit plans of the Parent (“Parent Plans”), the Parent shall, or shall cause the Surviving Corporation to: (i) with respect to any medical or health plan, waive any pre-existing condition or exclusion in any Parent Plans in which any Company employee may be entitled to participate that would result in a lack of coverage for any condition for which a Company employee would have been entitled to coverage under the corresponding Employee Plan; (ii) with respect to any medical or health plan, waive any waiting period in any Parent Plans in which any Company employee may be entitled to participate that exceeds the corresponding waiting period under the corresponding Employee Plan (after taking into account the service credit provided for herein for purposes of satisfying such waiting period); (iii) use reasonable efforts to provide each Company employee with credit for any co-

payments and deductibles paid prior to the Effective Time (to the same extent such credit was given under the analogous Employee Plan prior to the Control Date) in satisfying any applicable deductible or out-of-pocket requirements under any Parent Plans in which such employees may be eligible to participate after the Effective Time and (iv) recognize all service of the Company employees with the Company or any of its ERISA Affiliates for purposes of eligibility to participate, vesting credit, entitlement to benefits, and, solely with respect to vacation and severance benefits, benefit accrual in any Parent Plan in which the Company employees may be eligible to participate after the Effective Time; provided that the foregoing shall not apply to the extent it would result in duplication of benefits. Nothing in this paragraph shall be interpreted to require the Parent to provide for the participation of any Company employee in any Parent Plan.

(c) If and to the extent not paid by the Company prior to the Closing Date, Parent shall, or shall cause the Company, to pay, within 10 Business Days following the Closing, (i) to all persons who, as of the date hereof, participate in the Company’s broad-based employee bonus plan applicable to officers and employees and described in exhibit 10.29 to the Company’s annual report on Form 10-K for the year ended December 31, 2003, a bonus for the fiscal quarter ending December 31, 2004 determined as if all company, individual and other performance targets established under such plan in respect of such fiscal quarter were achieved at 112.5% of target, and (ii) to all officers who, as of the date hereof, participate in the Company’s discretionary annual bonus plan, a bonus under such plan in an aggregate amount not to exceed the amount paid under such plan for fiscal 2003.

(d) If and to the extent not paid by the Company prior to the Closing Date, Parent shall, or shall cause the Company to, pay within 10 Business Days following the Closing all commissions and bonuses under the Company’s “Sales and Incentive Compensation Plans” for the fiscal quarter ending December 31, 2004 determined as if each participant in such plans had completed all sales that, as of December 10, 2004, each such participant had included in such participant’s “commitment list” of transactions expected to close by the end of such quarter.

(e) Parent will use reasonable efforts to not take or omit to take and to not permit the Company to take or omit to take any action that would subject any employee of the Company or its Subsidiaries to a tax pursuant to section 409A of the Code with respect to the transactions contemplated hereby; provided that Parent shall not be required to pay additional costs.

Section 8.05. S-8 Registration. As promptly as practicable but no later than 10 Business Days after the Effective Time, Parent agrees to file with the SEC a registration statement on Form S-8 covering the sale of Parent Shares issuable pursuant to outstanding Company Options assumed by Parent pursuant to the terms hereof, and Parent shall use reasonable best efforts to maintain the effectiveness of such registration statement and the current status of the prospectus associated therewith so long as any

Company Options remain outstanding. The Company will cooperate and reasonably assist Parent in the preparation of such registration statement.

Section 8.06. Parent Plans. Parent acknowledges that it currently intends to maintain an engineering organization at the Company’s Pleasanton campus following the Effective Time.

ARTICLE IX

COVENANTS OF PARENT AND THE COMPANY

The parties hereto agree that:

Section 9.01. Reasonable Best Efforts. Subject to the terms and conditions of this Agreement, the Company, Merger Subsidiary and Parent shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement, including (i) preparing and filing as promptly as practicable with any governmental authority or other Third Party all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents and (ii) obtaining and maintaining all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any governmental authority or other Third Party that are necessary, proper or advisable to consummate the transactions contemplated by this Agreement. Notwithstanding anything in this Agreement, in no event shall Parent (i) be required to accept any restraint or prohibition on the exercise of Parent’s full rights of ownership or operation (or that of its Affiliates) of all or a substantial portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or of Parent and its Subsidiaries, taken as a whole, or (ii) be compelled to divest, dispose of or hold separate all or a substantial portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or of Parent and its Subsidiaries, taken as a whole, in each case, if it would have a material adverse effect on Parent and its Subsidiaries (including the Company and its Subsidiaries) following the Effective Time.

Section 9.02. Certain Filings. The Company and Parent shall cooperate with one another (i) in connection with the preparation of the Company Disclosure Documents and the Offer Documents, (ii) in determining whether any action by or in respect of, or filing with, any governmental body, agency, official or authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement and (iii) in taking such actions or making any such filings, furnishing information required in connection therewith or with the Company Disclosure Documents or the Offer Documents and seeking timely to obtain any such actions, consents, approvals or waivers.

Section 9.03. Public Announcements. Parent and the Company shall consult with each other before issuing any press release or making any other public

statement, or scheduling any press conference or conference call with investors or analysts, with respect to this Agreement or the transactions contemplated hereby and, except as may be required by applicable law, order of a court of competent jurisdiction or any listing agreement with or rule of NASDAQ, shall not issue any such press release or make any such other public statement or schedule any such press conference or conference call before such consultation.

Section 9.04. Merger Without Meeting of Stockholders. If Parent and its subsidiaries (including Merger Subsidiary) shall acquire in the aggregate at least 90% of the outstanding Shares pursuant to the Offer or otherwise, Parent shall take all necessary and appropriate action to cause the Merger to be effective as soon as practicable after the acceptance for payment and purchase of Shares pursuant to the Offer without a meeting of stockholders of the Company in accordance with Section 253 of Delaware Law.

Section 9.05. Dismissal of Litigation. Each of the parties shall promptly enter into stipulations staying all litigation currently pending between them or their respective Affiliates and representatives, or commenced by or on behalf of any of them in connection with the Offer, and the parties shall cause such stipulations to be filed promptly after the date of this Agreement. Each of the parties shall also, promptly following the Control Date, enter into and file stipulations dismissing with prejudice all such litigation and releasing all claims against the other parties hereto (and their Affiliates and representatives) based on any action or omission that occurred prior to the date of such stipulations as of the date such stipulations are filed. Notwithstanding the foregoing, if this Agreement is terminated in accordance with Article XI, after such termination nothing herein shall prevent either party (or its Affiliates or representatives) from pursuing any such litigation or any other litigation against any other party hereto (or its Affiliates or representatives).

Section 9.06. Stockholder Litigation. The Company shall give Parent the opportunity to participate in the defense or settlement of any stockholder litigation that currently exists or arises after the date of this Agreement against the Company or its directors or officers relating to any of the transactions contemplated hereby, and no such settlement shall be agreed to without Parent’s consent, which shall not be unreasonably withheld or delayed.

Section 9.07. Insider Restrictions. Prior to the Effective Time, the Board of Directors (or an appropriate committee of non-employee directors thereof) of each of Parent and the Company shall, as applicable, adopt a resolution consistent with the interpretative guidance of the SEC so that the acquisition pursuant to this Agreement of equity securities of Parent (including derivative securities) by any person who is expected to become a covered person of Parent for purposes of Section 16 of the Exchange Act (“Section 16”), and the disposition pursuant to this Agreement of equity securities of the Company (including derivative securities) by any officer or director of Company, shall each be an exempt transaction for purposes of Section 16.

Section 9.08. Integration Planning. The Company shall use reasonable efforts to cooperate with all reasonable requests of Parent for the purpose of facilitating integration of Parent and the Company, including (a) continuing to work with KPMG LLP, the Company’s independent auditors, to prepare the audited consolidated financial statements of the Company as of and for the year ended December 31, 2004 and (b) if requested by Parent, appointing an overall integration coordinator, designating liaisons for functional and geographic units and cooperating in communications to customers, partners and employees.

ARTICLE X

CONDITIONS TO THE MERGER

Section 10.01. Conditions to Obligations of Each Party. The obligations of the Company, Parent and Merger Subsidiary to consummate the Merger are subject to the satisfaction of the following conditions:

(a) if required by Delaware Law, this Agreement shall have been approved and adopted by the stockholders of the Company in accordance with such law;

(b) no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Merger; and

(c) Merger Subsidiary shall have purchased Shares pursuant to the Offer (provided that this shall not be a condition to Parent’s and Merger Subsidiary’s obligations if Merger Subsidiary shall have failed to purchase Shares pursuant to the Offer in violation of this Agreement).

ARTICLE XI

TERMINATION

Section 11.01. Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time (notwithstanding any approval of this Agreement by the stockholders of the Company):

(a) by mutual written agreement of the Company and Parent;

(b) by either the Company or Parent, if:

(i) the Offer has not been consummated on or before January 31, 2005 (the “End Date”); provided that the right to terminate this Agreement pursuant to this Section 11.01(b)(i) shall not be available to any party whose breach of any provision of this Agreement is the principal reason for the failure of the Offer to be consummated by such time; or

(ii) (A) there shall be any law or regulation that makes acceptance for payment of, and payment for, the Shares pursuant to the Offer or consummation of the Merger illegal or otherwise prohibited or (B) any judgment, injunction, order or decree (which the parties shall have used their reasonable best efforts to resist, resolve or lift in accordance with Section 9.01) of any court or governmental body having competent jurisdiction enjoining Merger Subsidiary from accepting for payment of, and paying for, the Shares pursuant to the Offer or the Company or Parent from consummating the Merger is entered and such judgment, injunction, order or decree shall have become final and nonappealable;

(i) prior to the acceptance for payment of the Shares under the Offer, the Company Board shall have failed to make, withdrawn, or modified in a manner adverse to Parent, its approval or recommendation of this Agreement, the Offer or the Merger, as permitted by Section 7.04(b)(iii); provided that the Company shall have paid any amounts due pursuant to Section 12.04(b) in accordance with the terms, and at the times, specified therein, and provided, further, that (i) the Company notifies Parent, in writing and at least 48 hours prior to such termination, of its intention to terminate this Agreement and to enter into a binding written agreement concerning an Acquisition Proposal that constitutes a Superior Proposal, attaching the most current version of such proposed agreement (or a description of all material terms and conditions thereof), and (ii) Parent does not make, within 48 hours of receipt of such written notification, an offer that the Company Board determines in good faith by a majority vote of independent directors, after consultation with its Financial Advisors, is at least as favorable to the stockholders of the Company as such Superior Proposal, it being understood that the Company shall not enter into any such binding agreement during such 48-hour period; or

(ii) (x) either Parent or Merger Subsidiary shall have breached or failed to perform in any material respect any of its material obligations under the Agreement or (y) the representations and warranties of Parent and Merger Subsidiary contained in the Agreement, disregarding all qualifications contained therein regarding materiality, shall not be true when made or at any time prior to the consummation of the Offer as if made at and as of such time and such failures to be true, in the aggregate, shall have had or would reasonably be expected to have a Material Adverse Effect on Parent or to impair materially the ability of Parent and Merger Subsidiary to consummate the transactions contemplated by this Agreement.

(d) by Parent, if at any time prior to the purchase of any Shares pursuant to the Offer,

(i) (A) the Company Board shall have failed to make, withdrawn or modified in a manner adverse to Parent, its approval or recommendation of this Agreement, the Offer or the Merger (whether or not as permitted by Section 7.04(b)(iii)) or (B) the Company shall have breached any of the provisions of Section 7.04;

(ii) the Company shall have entered into, or announced its intention to enter into, an agreement with respect to an Acquisition Proposal; or

(iii) there shall have occurred a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set forth in this Agreement that would cause the condition set forth in paragraph (b) of Exhibit A not to be satisfied, and such condition is incapable of being satisfied by the End Date.

The party desiring to terminate this Agreement pursuant to this Section 11.01 (other than pursuant to Section 11.01(a)) shall give notice of such termination to the other party.

Section 11.02. Effect of Termination. If this Agreement is terminated pursuant to Section 11.01, this Agreement shall become void and of no effect with no liability on the part of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other party hereto; provided that, if such termination shall result from the willful (i) failure of either party to fulfill a condition to the performance of the obligations of the other party or (ii) failure of either party to perform a covenant hereof, such party shall be fully liable for any and all liabilities and damages incurred or suffered by the other party as a result of such failure; and provided, further, that if (A) such termination shall result from the willful failure of Merger Subsidiary to perform its covenants and agreements to purchase Shares in the Offer pursuant to Article II or (B) the Agreement is terminated by Parent pursuant to Section 11.01(b) , Parent agrees that (in addition to any damages that may be due to the Company or its stockholders) for a period of five years (in the case of a termination described in clause (A) above) or two years (in the case of a termination described in clause (B) above) from the date of such termination, neither Parent nor any of its Affiliates, alone or with others, will in any manner, directly or indirectly: (a) effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in, or in any way knowingly assist (including, without limitation, through the provision of financing) any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in, any Acquisition Proposal or any “solicitation” of “proxies” (as such terms are used under the Exchange Act) or consents with respect to any voting securities of the Company; (b) form, join or in any way participate in a “group” (as such term is used under the Exchange Act) with respect to any securities of the Company; (c) otherwise act, alone or in concert with others, to seek to control or influence the management, board of directors or policies of the Company; (d) take any action that might force the Company to make a public announcement regarding any of the types of matters set forth in clause (a) above; (e) enter into discussions or arrangements with any Third Party with respect to any of the matters set

forth in clauses (a) through (d) above; or (f) request that the Company (or any of its directors, officers, employees or agents) amend or waive any part of this proviso. The provisions of Sections 7.03, 12.04, 12.06, 12.07, 12.08, 12.12 and 12.13 shall survive any termination hereof pursuant to Section 11.01.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given,

if to Parent or Merger Subsidiary, to:

Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
Attention: Daniel Cooperman
Facsimile No.: (650) 633-1813
E-mail: daniel.cooperman@oracle.com

with a copy to:

Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, CA 94025
Attention: William M. Kelly
Facsimile No.: (650) 752-2111
E-mail: william.kelly@dpw.com

if to the Company, to:

PeopleSoft, Inc.
4460 Hacienda Drive
Pleasanton, California 94588
Attention: James P. Shaughnessy
Facsimile No.: (925) 694-5550
E-mail: Jim_Shaughnessy@peoplesoft.com

with a copy to:

Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Victor I. Lewkow
Facsimile No.: (212) 225-3999
E-mail: vlewkow@cgsh.com

and to

Gibson Dunn & Crutcher LLP
One Montgomery Street
Telesis Tower
San Francisco, California 94104
Attention: Douglas D. Smith

Peter T. Heilmann

Facsimile No.: (415) 986-5309

E-mail: DSmith@gibsondunn.com

PHeilmann@gibsondunn.com

or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received on the next succeeding Business Day in the place of receipt.

Section 12.02. Survival of Representations, Warranties and Agreements. The representations, warranties and agreements contained herein and in any certificate or other writing delivered pursuant hereto shall not survive the Effective Time, except for the agreements set forth in Article III and Sections 8.03, 8.04, 8.05 and 9.07.

Section 12.03. Amendments and Waivers. (a) Subject to Section 2.03(c), any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective; provided that, after the adoption of this Agreement by the stockholders of the Company and without their further approval, no such amendment or waiver shall reduce the amount or change the kind of consideration to be received in exchange for the Shares.

(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 12.04. Expenses. (a) Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

(b) If a Payment Event (as hereinafter defined) occurs, the Company shall pay to Parent (by wire transfer of immediately available funds), if, pursuant to (i) below, simultaneously with the occurrence of such Payment Event or, if pursuant to (ii) or (iii) below, within two Business Days following such Payment Event, a fee of $200,000,000.

“Payment Event” means (x) the termination of this Agreement pursuant to Section 11.01(c), (y) the termination of this Agreement pursuant to Section 11.01(d)(i) or Section 11.01(d)(ii) or (z) the occurrence, within 9 months of the termination of this Agreement pursuant to Section 11.01(b)(i), of the completion or consummation of an Acquisition Proposal, provided that (A) an Acquisition Proposal shall have been made and not irrevocably withdrawn prior to such termination and (B) all conditions to the Offer set forth in Exhibit A other than the Minimum Condition shall have been satisfied as of the most recent expiration date of the Offer on or prior the End Date.

(c) The Company acknowledges that the agreements contained in this Section 12.04 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, Parent and Merger Subsidiary would not enter into this Agreement. Accordingly, if the Company fails promptly to pay any amount due to Parent pursuant to this Section 12.04, it shall also pay any costs and expenses incurred by Parent or Merger Subsidiary in connection with a legal action to enforce this Section 12.04 that results in a judgment against the Company for such amount; provided that Parent shall pay any costs and expenses incurred by the Company in defending any such action that results in a judgment in favor of the Company.

Section 12.05. Binding Effect; Benefit; Assignment. (a) The provisions of this Agreement shall be binding upon and, except for the provisions of Section 2.01, Section 8.03, Section 9.05 and Section 9.07, shall inure to the benefit of the parties hereto and their respective successors and assigns. Except for the provisions of Section 2.01, Section 8.03, Section 9.05 and Section 9.07, no provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

(b) No party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, except (i) that Parent or Merger Subsidiary may transfer or assign, in whole or from time to time in part, to one or more of its wholly-owned Subsidiaries, the right to purchase all or a portion of the Shares pursuant to the Offer, but no such transfer or assignment shall relieve Parent or Merger Subsidiary of its obligations under the Offer or prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer and (ii) as provided in Section 3.01(a).

Section 12.06. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, without regard to the conflicts of law rules of such state.

Section 12.07. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal court located in the State of Delaware or any Delaware state court, and each of the parties hereby irrevocably consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 12.01 shall be deemed effective service of process on such party.

Section 12.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 12.09. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

Section 12.10. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 12.11. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as

closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 12.12. Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any federal court located in the State of Delaware or any Delaware state court, in addition to any other remedy to which they are entitled at law or in equity.

Section 12.13. Guarantee of Parent. Parent hereby guarantees the payment by Merger Subsidiary of any amounts payable by Merger Subsidiary pursuant to the Offer or otherwise pursuant to this Agreement and will cause Merger Subsidiary to perform all of its other obligations under this Agreement in accordance with their terms.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

PEOPLESOFT, INC.

By:   /s/ James P. Shaughnessy
Name:   James P. Shaughnessy
Title:   Senior Vice President and General Counsel

ORACLE CORPORATION

By:   /s/ Safra Catz
Name:   Safra Catz
Title:   President

PEPPER ACQUISITION CORP.

By:   /s/ Safra Catz
Name:   Safra Catz
Title:   President

EXHIBIT A

Notwithstanding any other provision of the Offer, Merger Subsidiary shall not be required to accept for payment or pay for any Shares, and may terminate the Offer, if at the expiration date of the Offer, (i) the Minimum Condition shall not have been satisfied or (ii) any of the following conditions exists:

(a) any provision of any applicable law or regulation or any judgment, injunction, order or decree shall prohibit the consummation of the Offer, the acceptance for payment of or payment for some or all of the Shares by Parent or Merger Subsidiary or consummation of the Merger;

(b) (i) the Company shall have breached or failed to perform in any material respect any of its material obligations under the Agreement or (ii) the representations and warranties of the Company contained in the Agreement, disregarding all qualifications contained therein regarding materiality, shall not be true when made or at any time prior to the consummation of the Offer as if made at and as of such time (other than representations and warranties that are made only as of a specified date, which need only to be true as of such specified date) and such failures to be true, in the aggregate, shall have had or would reasonably be expected to have a Material Adverse Effect on the Company, or

EXHIBIT B

(Form of Restated Certificate of Incorporation)

EX-99.(E)(36) 7 f03438a7exv99wxeyx36y.htm EXHIBIT (E)(36) exv99wxeyx36y

Exhibit (e)(36)

CONSULTING AGREEMENT

This Consulting Agreement (this “Agreement”) is made and entered into as of December 6, 2004, by and between PeopleSoft, Inc., a Delaware corporation (“PeopleSoft”), and Aneel Bhusri (“Consultant”).

WHEREAS, PeopleSoft desires to engage Consultant as a consultant to PeopleSoft to help develop and enhance PeopleSoft’s corporate strategy and to supervise PeopleSoft’s product and technology development; and

WHEREAS, Consultant wishes to accept such engagement on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, conditions, acknowledgments and agreements contained herein, PeopleSoft and Consultant hereby agree as follows:

1. Services. PeopleSoft hereby engages Consultant and Consultant hereby accepts such engagement, upon the terms and conditions of this Agreement. Consultant warrants that he is free to enter into and fully perform this Agreement.

2. Term. The term of this Agreement (the “Term”) shall begin on the date hereof and continue until terminated pursuant to Section 6 of this Agreement.

3. Position and Duties. During the Term, unless otherwise determined by the Board, Consultant shall serve as the Vice Chairman of PeopleSoft and, in such capacity, shall be responsible for leading the development of PeopleSoft’s corporate strategy, technology vision and long-term product roadmap and strategy. Consultant shall report to the Chief Executive Officer of PeopleSoft and be responsible for supervising the activities of the Executive Vice President of Products and Technology and the Chief Technology Officer. Consultant shall provide services on a full-time basis. His consulting services also may include, among others:

(i) attending meetings with customers and potential customers;

(ii) attending meetings with and interfacing directly with industry and financial analysts and representatives of the media;

(iii) directing the development of PeopleSoft’s business plans;

(iv) identifying and developing potential acquisitions of companies, technologies and intellectual property;

(v) managing and directing employees as designated by the officers of PeopleSoft set forth below; and

(vi) such other services as may be reasonably requested.

Consultant shall be available on an as needed basis to provide the services set forth above, as may be mutually agreed by Consultant and the Board or the Chief Executive Officer. During the Term, Consultant agrees to use his best efforts to advance the business and welfare of PeopleSoft and to render his services under this Agreement fully, faithfully, diligently, competently, professionally and to the best of his ability. Notwithstanding the full-time nature of the consulting relationship, Consultant shall not be required to provide any minimum number of hours under this Agreement, since his services will depend upon mutual agreement with the Board or the above-mentioned executive officers of PeopleSoft.

4. Consulting Fees; Expenses. For all Consultant’s services under this Agreement, PeopleSoft shall pay Consultant $125,000 per month during the Term. Such amounts will be paid by the 25^th day of the month following every month in which services are rendered. In addition, PeopleSoft shall reimburse Consultant for reasonable expenses incurred on behalf of PeopleSoft in connection with the services provided under this Agreement. All expenses shall be substantiated by appropriate receipts in accordance with PeopleSoft’s policies and shall be paid within 30 days of receipt of an invoice therefor. All fees paid to Consultant under this Agreement shall be in addition to all fees to which Consultant is entitled to receive in his capacity as a non-employee member of the board of directors of PeopleSoft (the “Board). Nothing in this Agreement shall be deemed to affect Consultant’s rights, obligations and duties as a member of the Board. In consideration of the fact that Consultant has been providing full-time consulting services similar to those described in this Agreement to PeopleSoft since October 1, 2004, upon execution of this Agreement by Consultant and PeopleSoft, PeopleSoft shall pay promptly to Consultant an amount equal to the aggregate monthly fee set forth above for the time period from October 1, 2004 to November 30, 2004. Nothing in this Agreement creates any right of Consultant to receive compensation in the form of stock options or restricted stock for Consultant’s service as a consultant or entitles consultant to participate in any of PeopleSoft’s executive severance plans.

5. Independent Contractor Relationship; Taxes. The relationship of PeopleSoft and Consultant created by this Agreement is that of an independent contractor, and nothing contained in this Agreement shall be deemed to create an employer-employee relationship between Consultant and PeopleSoft or give PeopleSoft the right to control the day-to-day affairs of Consultant. Consultant shall be directly responsible for payments to satisfy Consultant’s obligations under all tax laws of every kind, workers’ compensation laws, disability and unemployment insurance laws and the Social Security Act. PeopleSoft shall not withhold taxes or any other payroll type deductions from payments made to Consultant. Because Consultant is not an employee of the Company, but rather an independent contractor, the Company shall issue an IRS Form 1099. Consultant agrees to report all compensation received under this Agreement to the appropriate federal, state or local taxing authorities. Consultant further agrees to pay, when and as due, any and all taxes incurred or owed by Consultant as a result of the compensation hereunder, including estimated taxes if applicable, and shall provide the Company with proof of said payments upon request. Consultant hereby agrees to indemnify, defend, and hold harmless the Company from and against any and all claims, losses, costs, fines, assessments, fees, liabilities, damages or injuries suffered by the Company arising out of any breach by Consultant of this Section 4, and Consultant further agrees to indemnify the Company and hold it harmless to the extent of any obligation imposed on the Company (a) to pay

withholding taxes or similar items, or (b) resulting from any legal determination that Consultant is not an independent contractor.

6. Termination. Either party may terminate this Agreement for any reason and at any time by giving thirty (30) days written notice to the other party. Should either party default in the performance of the Agreement or materially breach any of its provisions, the non-breaching party may terminate this Agreement by giving written notification to the breaching party, and such termination shall be effective immediately upon receipt of said notice, or five (5) days from mailing of said notice, whichever occurs first. This Agreement terminates automatically and immediately upon the occurrence of any of the following events: (a) bankruptcy or insolvency of either party or (b) the death or disability of Consultant. Upon termination by either party, Consultant will be entitled to receive only compensation for the services provided through the date of the termination, and PeopleSoft will not be required to make any other payment, by way of compensation or damages of any kind.

7. No Assignment. This Agreement may not be assigned by either Consultant or PeopleSoft without the prior written consent of the other.

8. Entire Agreement; Modifications. This instrument, together with the exhibits hereto, contains the entire agreement of the parties with regard to matters covered herein. Standard policies of PeopleSoft applicable to consultants shall govern matters not set forth in this Agreement to the extent they do not conflict with this Agreement. This Agreement may not be changed or modified, or released, discharged, abandoned or otherwise terminated, in whole or in part, except by an instrument in writing approved by the Board, and signed by an executive officer of PeopleSoft and by Consultant.

9. Governing Law. This Agreement and all matters or issues collateral hereto shall be governed by the laws of the State of California applicable to contracts made and to be performed entirely within such State.

10. Waiver. A waiver by either party of any of the terms or conditions of this Agreement in any one instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof. All remedies, rights, undertakings, obligations and agreements contained in this Agreement shall be cumulative, and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party.

11. Compliance with Laws and Policies. Consultant agrees that he will at all times comply strictly with all applicable laws and all current and future policies of PeopleSoft.

12. Confidentiality; Property of PeopleSoft. As used in the Agreement, the term “Confidential Information” means proprietary information, trade secret or knowledge belonging to PeopleSoft and its subsidiaries, including without limitation research, product plans, software, designs or drawings, processes or formulae, computer programs, inventions, engineering, business and financial data, salary information, customer lists, surveys and any other information pertaining to any aspects of PeopleSoft’s business which is either information not known by

actual or potential competitors of PeopleSoft or is proprietary information of PeopleSoft or its customers or suppliers, whether of a technical nature or otherwise.

Consultant agrees to hold in confidence and not, directly or indirectly, to use or disclose, either during or after termination of his services as a consultant to PeopleSoft any Confidential Information Consultant obtains or creates during the period of this Agreement, except to the extent authorized by PeopleSoft, until such Confidential Information becomes generally known. Consultant agrees not to make copies of such Confidential Information except as authorized by PeopleSoft. Upon termination or expiration of his services hereunder, Consultant agrees to return to PeopleSoft all property of PeopleSoft and its subsidiaries of which Consultant has had custody and to deliver to PeopleSoft all tangible copies of Confidential Information.

13. Survival of Certain Provisions. The rights and obligations of the parties under Section 12 shall survive the termination of this Agreement.

14. Severability of Provisions. If any provision or any portion of any provision of this Agreement, or the application of any such provision or any portion thereof to any person or circumstance, shall be held invalid or unenforceable, the remaining portion of such provision and the remaining provisions of this Agreement, and the application of such provision or portion of such provision as is held invalid or unenforceable to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be thereby affected.

15. Arbitration and Attorneys Fees. Any and all disputes between Consultant and PeopleSoft, or its affiliates, agents, other contractors, or representatives, concerning this Agreement or the parties’ independent contractor-client relationship, that cannot be resolved by negotiation between the parties, shall be resolved by final and binding arbitration to be conducted in Alameda County, California, according to California law and the rules of the American Arbitration Association then in effect. This agreement to arbitrate covers and includes, without limitation, claims for breach of contract and breach of the covenant of good faith and fair dealing, business or personal tort claims, statutory claims for discrimination or harassment, and any other claims arising under any federal, state, or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way the subject of Consultant’s relationship with or provision of services as a Consultant to PeopleSoft, or the termination of this Agreement. The arbitration provided for herein shall be in lieu of any civil action, and any decision resulting from such arbitration shall be final and binding, and enforceable by any competent court of law. The prevailing party in any such arbitration or court action to enforce arbitration shall be entitled to recover expenses incurred, including attorneys’ fees.

16. Notices. All notices required to be given hereunder shall be given in writing, and may be personally delivered (including by facsimile), sent by overnight mail or deposited with the U.S. postal authorities, return receipt requested, to the parties addresses set forth on the signature page hereto or to such other address as the parties may from time to time designate in writing.

17. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.


CONSULTANT		PEOPLESOFT, INC.

/s/ Aneel Bhusri		By: /s/ James P. Shaughnessy

Aneel Bhusri, Consultant		Name: James P. Shaughnessy Title: Senior Vice President, General Counsel, Secretary

Address:		Address:
		4460 Hacienda Drive Pleasanton, CA 94588-8618 Fax: (925) 694-5550

EX-99.(E)(37) 8 f03438a7exv99wxeyx37y.htm EXHIBIT (E)(37) exv99wxeyx37y

Exhibit (e)(37)

December 11, 2004

Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065

Attention: Daniel Cooperman

Ladies and Gentlemen:

In connection with your consideration of a possible acquisition of PeopleSoft, Inc. or any similar or related transaction (the “Company”), it is expected that we will furnish you with, or otherwise make available to you, certain information about the business and operations of the Company, which may include, without limitation, any of the following: trade secrets, patented, copyrighted or proprietary information, analyses, compilations, data, studies, financial data and information, computer programs, software, software documentation, formulas, data, inventions, algorithms, techniques, processes, business plans, marketing plans, strategies, forecasts, third party confidential information, employee lists, and customer lists. Such information, regardless of the form in which it is maintained and whether prepared by us or otherwise, together with analyses, compilations, studies or other documents prepared by you or your affiliates, officers, directors, employees, agents or representatives (collectively, “Representatives”) which contain or otherwise reflect such information, is hereinafter referred to as “Confidential Information”, except that “Confidential Information” does not include any information (i) that was publicly available prior to the date of this agreement or thereafter becomes publicly available without any violation of this agreement on the part of you or any of your Representatives, (ii) that was available to you on a non-confidential basis prior to its disclosure to you or your Representatives by the Company or its Representatives or becomes available to you from a person other than the Company and its Representatives who is not, to the best of your knowledge, subject to any legally binding obligation to keep such information confidential, (iii) that is independently developed by you without the use of the Confidential Information, or (iv) that is disclosed under operation of law, but only to the extent legally required to be disclosed. As used in this agreement, “person” means an individual or entity. As used in this agreement, “you” or “your” means Oracle


Oracle Corporation		December 11, 2004

Corporation, Pepper Acquisition Corporation and each of their Representatives, unless otherwise expressly provided or the context clearly implies to the contrary.

In consideration of your being provided with the Confidential Information and being offered the opportunity to evaluate the business of the Company, you agree to comply with the terms of this agreement.

The Confidential Information will be kept confidential by you and your Representatives and shall not be disclosed, in whole or in part, to any person other than those of your Representatives who need to know such Confidential Information for the purpose of evaluating the proposed acquisition, except as otherwise required by law or the applicable rules of any national securities exchange; provided that (i) you require your Representatives to be bound by the terms of this agreement to the fullest extent as if they were parties hereto and (ii) you shall be responsible for any breach of this agreement by any of your Representatives. You shall promptly notify the Company of any unauthorized disclosure or use of Confidential Information by any person, and cooperate with the Company to mitigate the consequences thereof.

Without the prior written consent of the Company, neither you nor your Representatives will disclose to any person the fact that the Confidential Information has been made available to you, that discussions or negotiations, if any, are taking place concerning a possible transaction with the Company, or any of the terms, conditions or other facts with respect to any such possible transaction, including the status thereof, except as otherwise required by law or the applicable rules of any national securities exchange.

You will not use or allow the use of the Confidential Information for any purpose except to evaluate the proposed acquisition. You do not acquire any license rights, title or interest in the Confidential Information except the limited right to use the Confidential Information to evaluate, negotiate and document an acquisition of the Company.

You hereby acknowledge that the parties are engaged, directly or indirectly, in certain litigation proceedings in which the parties’ interests are adverse and, therefore, explicitly agree that Confidential Information provided to you and your Representatives under this letter agreement in anticipation of, or for evaluation or negotiation of, any transaction shall not be deemed a waiver of attorney-client, business strategy, work product or any other applicable privilege for any purpose (including such litigation proceedings or any other related suit, hearing, litigation, arbitration or mediation) and you hereby waive any right to claim that these privileges have been waived by the Company by providing you and your Representatives the Confidential Information under this letter agreement. The Company agrees that this paragraph and any waiver of any right under this paragraph applies solely to the provision of Confidential Information


Oracle Corporation		December 11, 2004

under this letter agreement and is without prejudice to Oracle’s contentions in those certain litigation proceedings that the Company has waived any privilege with respect to certain subjects. NOTHING HEREIN IS INTENDED TO ABROGATE OR SUPERCEDE IN ANY WAY THE PROTECTIVE ORDERS ISSUED IN ORACLE CORP. V. PEOPLESOFT, INC., NO. 20377 NC (DEL. CH.) OR PEOPLESOFT, INC. V. ORACLE CORP., NO. RG03101434 (CA) (THE “STATE LITIGATION”). NEITHER THE CONFIDENTIAL INFORMATION PROVIDED UNDER THIS AGREEMENT NOR ANY INFORMATION DERIVED FROM CONFIDENTIAL INFORMATION PROVIDED UNDER THIS AGREEMENT MAY BE USED IN ANY WAY IN THE STATE LITIGATION UNLESS, WITHOUT BENEFIT OF THIS AGREEMENT, THE CONFIDENTIAL INFORMATION PROVIDED UNDER THIS AGREEMENT WAS OTHERWISE PROPERLY PRODUCED AND/OR AVAILABLE FOR USE IN THE NORMAL COURSE OF THE STATE LITIGATION. ORACLE AGREES THAT THE COMPANY’S PRODUCTION OF THE CONFIDENTIAL INFORMATION UNDER THIS AGREEMENT SHALL HAVE NO AFFECT ON THE NATURE OR SCOPE OF ANY PRIVILEGE WAIVER THAT THE COMPANY MAY MAKE IN THE STATE LITIGATION.

The Confidential Information, except for that portion which consists of analyses, compilations, studies or other documents prepared by you or your Representatives, will be returned to the Company immediately upon the Company’s request. That portion of the Confidential Information which consists of analyses, compilations, studies or other documents prepared by you or your Representatives will, to the extent legally permitted, be destroyed immediately upon the Company’s request. Notwithstanding any failure by you or your Representatives to destroy any vestiges of the Confidential Information, all vestiges of the Confidential Information shall continue to be deemed Confidential Information under and subject to the terms of this letter agreement. Upon the request of the Company, you will provide the Company with prompt written confirmation of your compliance with the first two sentences of this paragraph. You will inform the Company promptly of any determination by you not to proceed with the proposed acquisition.

Nothing in this letter agreement shall be construed to limit or preclude you from developing, using, marketing, licensing, and/or selling any independently developed software or other technology that is similar or related to the Confidential Information. You shall not reverse engineer, decompile, copy or export any Confidential Information.

If you or any of your Representatives is required (by oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demand or similar process) and your counsel has advised you that your or your Representative must make such disclosure, you may disclose the


Oracle Corporation		December 11, 2004

Confidential Information required to be disclosed, provided that you provide prompt notice thereof to the Company, together with the statutory or regulatory provision, or court order, on which such disclosure is based, to enable the Company (a) to seek an appropriate protective order or other remedy; (b) to consult with you with respect to you taking steps to resist or narrow the scope of such request or legal process or (c) to waive compliance, in whole or in part, with the terms of this letter agreement. In the event that such protective order or other remedy is not obtained, or the Company waives your compliance with the provisions of this agreement, you will furnish only that portion of the Confidential Information which is legally required, in the opinion of your counsel, and will exercise your best efforts to obtain a protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. You will assist the Company as may reasonably request, to protect such information.

No failure or delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof or preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

You agree that the Company would be irreparably injured by a breach of this agreement by you or your Representatives and that, in such event, the Company shall be entitled, in addition to any and all other remedies, to injunctive relief and specific performance.

The Company and its Representatives make no representations or warranties, express or implied, with respect to the Confidential Information, except for any particular representations and warranties which may be made to a purchaser in a definitive purchase agreement when, as, and if finally executed, and subject to such limitations and restrictions as may be specified in such agreement. You agree that neither the Company nor any of its Representatives shall have any liability to you or your Representatives resulting from the selection or use of the Confidential Information by you or your Representatives or any errors therein or omission therefrom. You understand and agree that, unless and until a definitive purchase agreement between the Company and you with respect to the proposed acquisition has been executed and delivered, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to any transaction (except for the express obligations set forth in this agreement). You agree that this agreement creates no obligation of any kind whatsoever on either party with respect to negotiating or entering into a definitive agreement related to any transaction unless and until a definitive agreement between the parties has been executed and delivered. Neither party will be obligated to pursue any transaction by virtue of this or any written or oral expression with respect to any transaction, nor will either party be under any legal obligation to do so by virtue of any written or oral expression of its Representatives with respect to any transaction.


Oracle Corporation		December 11, 2004

You hereby irrevocably and unconditionally submit to the exclusive jurisdiction of any state or federal court sitting in Alameda, San Francisco or San Mateo County, California, over any suit, action or proceeding arising out of or relating to this letter agreement. You hereby agree that service of any process, summons, notice or document by U.S. registered mail addressed to you shall be effective service of process for any such suit, action or proceeding brought against you in any such court. You hereby irrevocably and unconditionally waive any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. You agree that a final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon you and may be enforced in any other courts to whose jurisdiction you are or may be subject by suit upon such judgment.

Unless otherwise expressly provided or limited, the nondisclosure obligations under this Agreement shall continue in perpetuity from the date of disclosure. This agreement shall be governed by, and construed in accordance with, the laws of the State of California.


		Very truly yours,

		PeopleSoft, Inc.

		By:	/s/ Carol Vanairsdale

			Name: Carol Vanairsdale
			Title: Vice President

Accepted and agreed:

Oracle Corporation

By:	/s/ Daniel Cooperman

	Name: Daniel Cooperman
	Title: SVP, General Counsel and Secretary

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


	On December 13, 2004, the Company issued a press release announcing that the Company, Oracle Corporation (“Oracle”) and Pepper Acquisition Corp., a wholly owned subsidiary of Oracle (“Merger Sub”), entered into an agreement and plan of merger dated as of December 12, 2004 (the “Merger Agreement”). The press release also announced that, pursuant to the Merger Agreement, Oracle and Merger Sub would amend the terms and conditions of the offer to purchase all outstanding shares of PeopleSoft common stock (together with the associated preferred stock purchase rights) by (a) increasing the price to be paid per share of PeopleSoft common stock (and the associated preferred stock purchase rights) from $24.00, as provided in the Offer as amended and restated on November 3, 2004 (the “$24.00 Offer”), to $26.50 per share and (b) amending certain conditions (the offer to purchase, as so amended, the “$26.50 Offer”). On December 13, 2004, Oracle and Merger Sub filed an amendment to their Tender Offer Statement on Schedule TO reflecting the terms of the $26.50 Offer, and on December 15, 2004, filed an amended and restated offer to purchase reflecting the $26.50 Offer as exhibit (a)(1)(xxi) to Amendment No. 83 to their Tender Offer Statement on Schedule TO (the “$26.50 Offer to Purchase”).

	The $26.50 Offer is being made pursuant to the Merger Agreement. The Merger Agreement provides that, among other things, following consummation of the $26.50 Offer and subject to other conditions contained in the Merger Agreement, including the approval and adoption of the Merger Agreement by the Company stockholders if required by Delaware law, Merger Sub will be merged with and into the Company (the “Merger”) and each outstanding share of PeopleSoft common stock (and the associated preferred stock purchase rights) not tendered and purchased pursuant to the $26.50 Offer (other than shares held by the Company, Oracle, Merger Sub or stockholders who properly perfect appraisal rights under Delaware law) will be converted into the right to receive the cash price per share paid in the tender offer, net to the stockholder in cash, without interest. The terms of the Merger Agreement are described in greater detail in Item 3 below and in Section 12 entitled “Purpose of the Offer; Plans for the Company; Stockholder Approval; Appraisal Rights; The Merger Agreement” in the $26.50 Offer to Purchase, which is being mailed to Company stockholders together with this Schedule 14D-9.

	The initial expiration date for the $26.50 Offer is 12:00 midnight, New York City time, on Tuesday December 28, 2004, subject to extension in certain limited circumstances as required or permitted under the Merger Agreement. Also, Oracle may elect to conduct a subsequent offering period of between three and 20 business days after the expiration of the $26.50 Offer. During the subsequent offering period, if Oracle elects to provide one, shares of PeopleSoft common stock (and the associated preferred stock purchase rights) not tendered and purchased prior to the expiration of the $26.50 Offer may be tendered to Merger Sub for the same consideration paid in the $26.50 Offer.


	•	The Board believed that $26.50 was the highest price that Oracle would be willing to pay and that Oracle would be unlikely to be willing to pay a higher price in the future. In this respect, the Board believed that there were no more desirable strategic or other transaction alternatives to the Oracle transaction that could likely be consummated before the Company’s 2005 Annual Meeting of Stockholders, noting the 18-month period that Oracle’s tender offer had been outstanding and the significant related publicity, and the fact that the Company had made inquiries of other potential acquirers or strategic partners, but none had led to negotiations or agreements for an alternative transaction.

	•	The fact that the holders of a majority of PeopleSoft common stock tendered their shares by the November 19, 2004 expiration time for the $24.00 Offer, that Company representatives had conversations with various Company stockholders in which the stockholders, including stockholders who tendered into the $24.00 Offer but indicated to PeopleSoft that they believed the Company was worth


		more than $24.00 per share, expressed the view that a sale of the Company at an appropriate price above $24.00 would be advisable, and the Board’s belief that the holders of a majority of PeopleSoft shares would support and tender into the $26.50 Offer.

	•	The $26.50 Offer reflects:


	•	a 54.8% premium to the 30-day average trading price of PeopleSoft common stock prior to September 9, 2004, the date the United States District Court for the Northern District of California ruled against the United States Department of Justice in its antitrust challenge to Oracle’s proposed acquisition of PeopleSoft;

	•	a 75.4% premium to the closing price of PeopleSoft common stock on June 5, 2003, the last trading day prior to the announcement of Oracle’s initial $16.00 offer;

	•	a 33.3% premium to the last 12-months average trading price of PeopleSoft common stock; and

	•	a 35.6% premium to the average closing price of PeopleSoft common stock since Oracle’s initial offer was announced.


	•	The Board’s view, despite its confidence in management’s financial plan for the fourth quarter of 2004 and for 2005, that there remained a risk that the continued unpredictability and uncertainty surrounding the Oracle tender offer, the pending litigation in Delaware and the imminent trial in PeopleSoft’s California lawsuit against Oracle, the potential for a proxy contest (during which Oracle might maintain or raise its $24.00 Offer, but was not likely to raise it to $26.50 or higher), and other risks and uncertainties relating to the industry and the Company’s business, could adversely affect the Company’s business, operations and performance, and thereafter there would be a risk that an acquisition might be concluded at a price lower than $26.50 per share.

	•	The separate opinions of Citigroup and Goldman Sachs, each dated December 12, 2004, as to the fairness, from a financial point of view and as of such date, of the $26.50 per share cash consideration to be received in the Offer and the Merger by holders of PeopleSoft common stock (other than Oracle, Merger Sub and their respective affiliates). The full text of the written opinions of Citigroup and Goldman Sachs, which set forth the assumptions made, matters considered and limitations on the review undertaken by Citigroup and Goldman Sachs, are attached hereto as Annexes B and C and are filed as exhibits (a)(143) and (a)(144) to this Schedule 14D-9, respectively, and are incorporated herein by reference. Citigroup’s and Goldman Sachs’ opinions are directed only to the fairness from a financial point of view of the $26.50 per share cash consideration to be received in the Offer and the Merger by holders of PeopleSoft common stock (other than Oracle, Merger Sub and their respective affiliates) and are not intended to constitute, and do not constitute, recommendations as to whether any stockholder should tender shares of PeopleSoft common stock pursuant to the Offer or as to any other actions to be taken by any stockholder in connection with the Offer or the Merger. Holders of PeopleSoft common stock are encouraged to read each of these opinions carefully in its entirety.

	•	Under the Merger Agreement, the obligations of Oracle and Merger Sub to consummate the $26.50 Offer and the Merger would be subject to a very limited number of conditions, with no financing condition and no “material adverse change” condition or other condition relating to the performance of the Company following the execution of the Merger Agreement. Therefore, for the first time in the 18 months that Oracle was seeking to acquire the Company, there would be negligible risk to the Company that approving an acquisition might damage the Company’s business to an extent that would permit Oracle not to complete the transaction and that such approval and non-consummation would leave the Company in a damaged position.

	•	The Board’s belief that entering into the Merger Agreement, which by its terms permits the Board to terminate the Merger Agreement to accept a “Superior Proposal” on payment of a $200 million fee to Oracle, was unlikely to prevent any realistic opportunity for an acquisition of the Company on terms more favorable to those in the Merger Agreement.


	(1)	Previously filed as an exhibit to PeopleSoft’s Schedule 14D-9 filed with the SEC June 12, 2003.

	(2)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 1 to Schedule 14D-9 filed with the SEC June 13, 2003.

	(3)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 2 to Schedule 14D-9 filed with the SEC June 17, 2003.

	(4)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 3 to Schedule 14D-9 filed with the SEC June 20, 2003.

	(5)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 4 to Schedule 14D-9 filed with the SEC July 3, 2003.


	†	This exhibit replaces and supersedes exhibit (e)(6), which previously was filed in error.


(29)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 29 to Schedule 14D-9 filed with the SEC June 18, 2004.

(30)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 30 to Schedule 14D-9 filed with the SEC June 28, 2004.

(31)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 31 to Schedule 14D-9 filed with the SEC July 2, 2004.

(32)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 32 to Schedule 14D-9 filed with the SEC July 7, 2004.

(33)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 33 to Schedule 14D-9 filed with the SEC July 7, 2004.

(34)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 34 to Schedule 14D-9 filed with the SEC August 12, 2004.

(35)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 35 to Schedule 14D-9 filed with the SEC September 9, 2004.

(36)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 36 to Schedule 14D-9 filed with the SEC September 10, 2004.

(37)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 38 to Schedule 14D-9 filed with the SEC October 5, 2004.

(38)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 39 to Schedule 14D-9 filed with the SEC October 12, 2004.

(39)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 40 to Schedule 14D-9 filed with the SEC October 12, 2004.

(40)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 41 to Schedule 14D-9 filed with the SEC October 18, 2004.

(41)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 42 to Schedule 14D-9 filed with the SEC October 29, 2004.

(42)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 43 to Schedule 14D-9 filed with the SEC November 2, 2004.

(43)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 44 to Schedule 14D-9 filed with the SEC November 12, 2004.

(44)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 45 to Schedule 14D-9 filed with the SEC November 18, 2004.

(45)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 46 to Schedule 14D-9 filed with the SEC November 18, 2004.

(46)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 47 to Schedule 14D-9 filed with the SEC November 18, 2004.

(47)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 48 to Schedule 14D-9 filed with the SEC November 22, 2004.

(48)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 49 to Schedule 14D-9 filed with the SEC November 26, 2004.

(49)	Previously filed as an exhibit to PeopleSoft’s Amendment No. 50 to Schedule 14D-9 filed with the SEC December 10, 2004.


(1)	Member of the Audit Committee.

(2)	Member of the Compensation Committee.

(3)	Member of the Transaction Committee.

(4)	Member of the Corporate Governance/ Nominating Committee.


	•	the independence and other qualifications of PeopleSoft board members. The corporate governance policy provides that a majority of the directors shall be independent of PeopleSoft and its management;

	•	the regular meetings of the independent directors;

	•	how persons are nominated by the Board for election as directors;

	•	the evaluation of performance of the Board and its committees;

	•	limitations on Board service;

	•	the functions of the Board in relation to oversight of PeopleSoft;

	•	the approval of the selection and compensation of the CEO and other executive officers;


	•	the organization and basic function of Board committees; and

	•	the authority to engage outside advisors.


(1)	The percentage of ownership indicated is based on 375,494,375 shares of Common Stock outstanding as of November 30, 2004, together with applicable options for such stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to such shares. Each person holds sole voting and investment power over the shares reported for him unless otherwise indicated. Shares subject to options exercisable on December 10, 2004 or by April 1, 2005 (more than 60 days thereafter) have been deemed outstanding for computing the percentage ownership of the person holding such options, but are not deemed outstanding for computing the percentage ownership of any other person.

(2)	Includes the following numbers of shares issuable upon exercise of options that were exercisable on December 10, 2004 or by April 1, 2005; Mr. Dubois: 1,036,241; Mr. Parker: 1,009,685; Mr. Wilmington: 1,011,357; Mr. Battle: 163,000; Mr. Bhusri: 65,000; Mr. Fanzilli: 81,250; Mr. Goldby: 121,250; Mr. Maples: 56,742; and Mr. Yansouni: 138,000. Includes 3,000,000 shares issuable upon the exercise of


	options held by Mr. Conway that expire December 30, 2004 and 281,249 shares issuable upon the exercise of options held by Mr. Gupta that expire January 9, 2005. Messrs. Conway and Gupta departed employment with the Company effective October 1, 2004 and October 12, 2004, respectively.

(3)	Includes the following numbers of unvested shares held subject to a forfeiture restriction pursuant to restricted stock awards as of April 1, 2005: Mr. Dubois: 89,250; Mr. Parker: 88,500; and Mr. Wilmington: 82,938.

(4)	Mr. Duffield has served as the Chief Executive Officer of the Company since October 1, 2004. Mr. Duffield is also a Principal Stockholder. His address is c/o PeopleSoft, Inc., 4460 Hacienda Drive, Pleasanton, CA 94588. The stock shown includes 26,461,663 shares held by trusts or accounts of which Mr. Duffield is trustee or director and 97,430 shares held by Mr. Duffield’s wife. Mr. Duffield disclaims beneficial ownership of 3,597,438 shares of PeopleSoft Common Stock held in the Duffield Family Foundation, a charitable foundation.

(5)	Includes 8,118,523 shares subject to stock options held by directors, named executive officers and other executive officers (16 persons) that were exercisable on December 10, 2004 or by April 1, 2005, and 531,064 unvested shares held subject to a forfeiture restriction pursuant to restricted stock awards.

(6)	Shares beneficially owned are determined solely from information reported on an amended Schedule 13G dated November 10, 2004. Additionally, Capital Guardian Trust Company, a wholly owned subsidiary of Capital Group International, Inc., is deemed to be the beneficial owner of 21,750,580 shares of PeopleSoft’s Common Stock.

(7)	Shares beneficially owned are determined solely from information reported on an amended Schedule 13G dated February 10, 2004.


	(1)	Dollar amounts are reported to the nearest $1,000.00.

	(2)	Payments of bonuses are made pursuant to PeopleSoft’s employee bonus plan, annual discretionary bonus program, and, as applicable, individual retention arrangements.

	(3)	On December 31, 2003, the number of unvested shares held pursuant to restricted stock awards, and their aggregate value on that date, was as follows: Mr. Conway: 500,000 shares valued at $11,395,000; Mr. Dubois: 69,125 shares valued at $1,575,359; Mr. Gupta: 69,125 shares valued at $1,575,359; Mr. Parker: 100,021 shares valued at $2,279,479; and Mr. Wilmington: 59,625 shares valued at $1,358,854. Dividends, if any, are payable to the holders of restricted stock under our plans.

	(4)	These shares vest 100% on February 1, 2006, or will vest pro rata if Mr. Conway leaves PeopleSoft under certain circumstances prior to February 2006.

	(5)	In 2001, Mr. Dubois received auto reimbursement, travel compensation and a sales excellence award of $4,095, $147,804 and $957, respectively. In 2002, he received auto reimbursement and travel compensation of $3,887 and $137,705, respectively. In 2003, he received auto reimbursement and travel compensation of $3,221 and $68,654, respectively.

	(6)	These shares vested 1/4 on January 30, 2004, then vest 1/16th per quarter thereafter, for a total vesting period of four years.

	(7)	These shares vested 1/4 on February 5, 2003, then vest 1/16th per quarter thereafter, for a total vesting period of four years.


	(8)	These shares vested 1/3 on October 30, 2002, then vest 1/12th per quarter thereafter, for a total vesting period of three years.

	(9)	The amounts represent PeopleSoft contributions made to the 401(k) plan accounts of the designated individuals.


(10)	In 2001, Mr. Wilmington received sales commissions of $15,000 and a sales excellence award of $1,541. In 2003, he received a sales excellence award of $724.

(11)	These shares vested 1/4 on October 30, 2002, then vest 1/16th per quarter thereafter, for a total vesting period of four years.

(12)	The amounts represent PeopleSoft contributions made to the deferred compensation plan account of Mr. Wilmington.


(1)	Options to purchase an aggregate of 14,673,030 shares of PeopleSoft’s Common Stock were granted to employees in 2003.

(2)	These columns show the hypothetical gains or “option spreads” of the options granted based on assumed annual compound stock price appreciation rates of 5% and 10% over the full ten-year term of the options. The 5% and 10% assumed rates of appreciation are specified in the rules of the SEC and do not represent PeopleSoft’s estimated or projected future prices of PeopleSoft’s Common Stock.


(3)	These shares vest 1/16 per quarter over four years, commencing January 16, 2003.

(4)	These shares vest 1/16 per quarter over four years, commencing May 4, 2003.

(5)	These shares vest 1/16 per quarter over four years, commencing August 4, 2003.

(6)	These shares vest 1/16 per quarter over four years, commencing November 16, 2003.


(1)	“Value Realized” is calculated by determining the difference between the closing price of PeopleSoft’s Common Stock as reported on the Nasdaq National Market on the date of exercise, and the exercise price of the shares.

(2)	“Value of Unexercised In-the-Money Options at Fiscal Year-End” is calculated by determining the difference between the closing price per share of PeopleSoft’s Common Stock as reported on the Nasdaq National Market on December 31, 2003 ($22.79) and the exercise price of such options.


	•	No changes were made to cash compensation levels for any executive officer. Based on the state of the competitive market, the Compensation Committee believes PeopleSoft executives are fairly and appropriately compensated for 2004.

	•	Equity awards in 2004 to executives will be solely in the form of restricted stock. We expect this action to further align the long-term interests of our stockholders and executives by providing rewards based on increased company value, by holding greater retention value for PeopleSoft executives and by the additional benefit of being less dilutive than pure option awards. In addition, the Compensation Committee, after consultation with one of our stockholders, is developing a policy that, commencing in 2005, PeopleSoft will tie vesting of 50% of the equity awards granted to PeopleSoft’s CEO and the four other most highly compensated officers to performance based metrics that the Compensation Committee will establish.

	•	Reduction in the annual refresh rate of the Amended and Restated 1989 Stock Plan from the lesser of 20 million shares or 5% of our outstanding Common Stock annually to the lesser of 20 million shares or 3% annually. PeopleSoft decided to further reduce the annual refresh rate to (i) the lesser of 20 million shares or 2% of our outstanding common stock annually, effective January 1, 2006, and (ii) the lesser of 20 million shares or 1% of our outstanding common stock annually, effective January 1, 2008 after consultation with one of our stockholders. The 1989 Plan is the primary vehicle from which stock options, restricted stock and other equity incentives are distributed to employees and executives. This decision will reduce the amount of equity available to grant to employees and executives, starting in 2004. This plan now provides an annual refresh rate that we believe is consistent with other firms in our industry and with stockholder expectations.

	•	Cancellation of approximately nine million shares available for equity awards at December 31, 2003 from the 1989 Plan. In further reducing the number of available shares being carried forward from year to year, the Board has acted in the best interests of stockholders while maintaining adequate equity incentives to attract and retain a valuable workforce.

	•	Reduction in the number and size of broad-based equity grants to both new and current employees. Taking into account leading practices for larger technology companies, the Compensation Committee has directed PeopleSoft management to emphasize awarding equity incentives to the Company’s top performers.

	•	Termination of the 2000 Nonstatutory Stock Option Plan, a plan providing for the grant of options that do not qualify for incentive stock option treatment. This plan was put into effect to address special retention issues and is no longer used. While currently outstanding options under the plan will continue to be exercisable, no new equity awards will be made under this plan.


	COMPENSATION COMMITTEE

	A. George “Skip” Battle (Chair)
	Steven D. Goldby
	Cyril J. Yansouni


	AUDIT COMMITTEE

	Cyril J. Yansouni (Chair)
	A. George “Skip” Battle
	Frank J. Fanzilli, Jr.
	Steven D. Goldby


PEOPLESOFT, INC.
By:	/s/ James P. Shaughnessy
	Name:	James P. Shaughnessy
	Title:	Senior Vice President and General Counsel


ORACLE CORPORATION
By:	/s/ Safra Catz
	Name:	Safra Catz
	Title:	President