Download the authoritative guide: Cloud Computing 2018: Using the Cloud to Transform Your BusinessPeopleSoft has reached a blanket agreement with disgruntled shareholders who had filed class-action lawsuits in protest of the Customer Assurance Program (CAP), formed after Oracle moved to acquire PeopleSoft last June.
The Pleasanton, Calif. software maker, now locked in a legal battle for control with Oracle, also said that its board of directors unanimously recommended that PeopleSoft stockholders reject Oracle's reduced tender offer of $21 per share.
PeopleSoft instituted the CAP, an initiative that would grant customers two to five times the cost of their software license fees, if PeopleSoft were acquired and its products discontinued, shortly after rival enterprise applications provider Oracle announced its intentions to acquire it.
Now, the U.S. Department of Justice and ten states want to block Oracle's unsolicited plans to acquire PeopleSoft, arguing that the merger between two major enterprise software providers would be anticompetitive and limit customers' choices.
The new shareholder settlement holds that if the current CAP is extended past June 30, 2004, the terms in new contracts will be limited to actions by Redwood Shores, Calif.'s Oracle.
In other terms of the settlement, PeopleSoft will augment its shareholder rights plan to provide that redemption decisions during the next two years will be made by its independent directors, and will amend its bylaws to allow stockholder nominations for election of directors until 95 days before the anniversary of the previous year's annual meeting.
PeopleSoft will also pay the plaintiffs attorneys' fees and expenses according to the court's discretion. The settlement is subject to the execution of settlement documents and approval by the Delaware Court of Chancery.
PeopleSoft said shareholders came to terms with the CAP because of the current antitrust reviews by the DoJ and the European Commission of the hostile proposal.