September 20, 2004 1:31 PM PDT

PeopleSoft sweetens severance packages

PeopleSoft has increased the size of the minimum severance package to 12 weeks of pay for its employees and doubled it for executives, in the wake of a federal court's boost for Oracle's hostile takeover bid.

Employees will get the improved severance packages only if they are terminated or laid off as part of a change in control of the company, such as a takeover by Oracle.


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"This is something the board did in recognition of the value that the employees have played," Steve Swasey, a PeopleSoft spokesman, said Monday afternoon. "It also allows the employees to breathe a little easier, in case the company is acquired."

The severance package for PeopleSoft employees will now include a minimum of 12 weeks of base pay, plus health care coverage for a similar period. Previously, the minimum was two weeks' pay for each year of service, but the package capped out at three months.

PeopleSoft executives, excluding Chief Executive Craig Conway, will now receive between one-and-half times and twice their base salary and bonus, in addition to two years of health coverage.

Employees working overseas will receive either the new severance packages or the amount that is called for under their respective countries' laws, whichever is greater, according to a filing late Friday with the U.S. Securities and Exchange Commission.

PeopleSoft also recently accelerated the vesting of options for employees, in the event that ownership of the company changes.

On Sept. 9, a judge for the U.S. District Court for Northern California issued a long-awaited ruling in the government's antitrust case against Oracle, in which the U.S. Department of Justice had sought to block the company's hostile bid for PeopleSoft. A judge ruled Oracle could move forward with its takeover bid.

Oracle, however, still needs approval from European antitrust regulators. And the database giant also needs to overturn PeopleSoft's "poison pill" antitakeover measures.

PeopleSoft representatives could not immediately be reached for comment.

 

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