Ellison 01-20-04 1 00008 14 by MR. SCOTT: 15 Q. All Right, Sir, As I Stated Earlier, This Will 16 Be the Deposition of T

00008 14 BY MR. SCOTT: 15 Q. All right, sir, as I stated earlier, this will 16 be the deposition of the Lawrence Ellison pursuant to 17 Civil Investigative Demand No. 022793. 18 Do you have that in front of you, sir? It's 19 Exhibit 1 to your deposition. 20 A. Yes, I do. 21 Q. Have you had a chance to read through that? 22 A. In a cursory way, yes. Ellison 01-20-04 1 00009 1 Q. All right. So I'll just -- for the record, I 2 will point out to you on the back of it there is some 3 language, too, that's pertinent, which is the authority 4 and -- one of the authorities by which this is being done 5 and some of the laws that govern the taking of the 6 deposition. 7 You might just want to read through that, as 8 well, just to be sure you've got all the language. At 9 least you've had a chance to look at it, as you've said, 10 on a cursory basis. 11 Just let me know when you're finished. 12 A. I've finished. 13 Q. All right, sir. Now, this will be your 14 deposition pursuant to that CID. Ellison 01-20-04 2 00011 3 Q. You understand you are testifying under oath? 4 A. I do. 5 Q. And pursuant to the statutes that's printed on 6 the back of the CID, Exhibit 1, to your deposition, in 7 addition to making truthful -- well, as part of 8 testifying under oath, do you understand that if I ask 9 you a question and you have any information pertaining to 10 that question and you say you do not know or do not 11 remember having any information, that would be a 12 violation of the oath? 13 A. Right. 14 Q. All right, sir, now, what's your current 15 position with Oracle? 16 A. I'm the CEO, chief executive officer. 17 Q. And your duties and responsibilities in that 18 position, what are they? 19 A. I'm a senior executive, senior management 20 executive in the company. All the other managers report 21 to me. 22 Q. Who are currently your direct reports? Ellison 01-20-04 3 00012 1 A. Jeff Henley's our chief financial officer; Safra 2 Catz is president in charge of operations; Chuck Phillips 3 is president in charge of our field; Chuck Rozwat is the 4 head of development of our technology products, that's 5 data base products; Ron Wohl is the head of development 6 of our application products; Mike Rocha is responsible 7 for support services. 8 Q. I've seen some references in some of the 9 documents that have been produced to Oracle in the 10 context of this investigation, references to the 11 executive committee. 12 Do you know what that is? 13 A. Yes, I do. 14 Q. Who -- well, first of all, what is the executive 15 committee and, secondly, who is currently on it? 16 A. It's a group of senior managers and that 17 includes all of the people I just mentioned, plus our 18 four heads of field sales on different geographic areas, 19 Sergio Giacoletto in EMEA, Europe, Middle East, Africa; 20 Luis Meizler in Latin America; Dereck Williams in Asia 21 Pacific; and Keith Block in North America. 22 Q. All right, sir, what is the purpose of the Ellison 01-20-04 4 00013 1 executive committee? 2 A. To review the status -- review what's going on 3 in the company and to make plans for our future 4 strategies and our -- and to execute on those plans. 5 Q. All right, sir, now, I've seen in the press 6 recently there's been some change within the company 7 regarding your position; is that right? 8 A. Yes. 9 Q. Could you describe for me what that change has 10 consisted of? 11 A. I used to be chairman of the board of Oracle of 12 the -- about half the time during Oracle's existence, 13 I've been chairman, about half the time I've not been 14 chairman. And Jeff Henley just took over chairman. I 15 believe the board believes a separation of chairman and 16 chief executive is good for our corporate goverments. It 17 also gave us the opportunity to retain Mr. Henley for a 18 longer period of time than we otherwise might have if he 19 just remained as chief financial officer. 20 Q. As a result of this change, you -- I take it, 21 you're still on the board? 22 A. Yes, I am. Ellison 01-20-04 5 00014 1 Q. Have your duties and responsibilities, as they 2 relate to Oracle, changed with you having stepped down as 3 the chairman of Oracle's board of directors? 4 A. My management duties haven't changed at all. 5 Q. Did you give up any duties and responsibilities 6 as a result of the change? 7 A. I give up duties as chairman of the board. 8 Q. Which would consist of what, as opposed to what 9 you would just do as a member of the board 10 A. Running the board meetings. Ellison 01-20-04 6 00034 2 Q. All right, sir, are you familiar with, I guess, 3 for want of a better term, an e-mail account within 4 Oracle called "HQ Apps"? 5 A. It's an approval account? 6 Q. Yes. 7 A. Am I familiar? I know it exists. 8 Q. By "approval account," what I meant in the last 9 question was an account where requests for approval of 10 non-standard contract terms or discounts above a certain 11 level are sent for review by people above, for example, 12 an application software, Mr. Block. 13 A. I think there are a lot of different HQ Apps 14 accountants [sic], including approval for purchase 15 requests, just buying a computer. It's basically our 16 approval system that includes all sorts of things that 17 require approval, including any exception to policy, 18 including discounts. 19 Q. So, for example, just to be sure we're clear on 20 where we are on this, if someone in Mr. Block's 21 organization sent up a request for approval of a discount 22 in a transaction dealing with application software that Ellison 01-20-04 7 00035 1 was above a specified amount, it would have to come to HQ 2 Apps for approval? 3 A. I don't know that for a fact, but it has to go 4 to Safra Catz for approval and HQ -- and I believe it 5 likely to goes through HQ Apps. 6 Q. Do you ever approve or been involved in 7 approvals of non-standard contract terms or larger than 8 discounts that are -- 9 A. Sure. 10 Q. Let me back up a minute. 11 Do you know what level Mr. Block is authorized 12 to grant discounts to? 13 A. I can get very close. 14 Q. All right. So why don't -- what is your 15 understanding of it? 16 A. I think he's at 70 percent right now. 17 Q. I think that's consistent with what he told us 18 at his deposition so. 19 Do you get involved in reviewing and approving 20 requests for discounts that go over that? 21 A. Occasionally. 22 Q. Are there particular types of transactions or Ellison 01-20-04 8 00036 1 circumstances that would lead you to get involved as 2 opposed to Ms. Catz? 3 A. If it's a particularly large transaction, an 4 interesting transaction, we're taking a different 5 structure, we're accepting more liability than what we 6 otherwise might, all of those might cause her to let me 7 know what she's approving. But typically she doesn't ask 8 for my approval, she just informs me that she thinks it's 9 a good idea or she'll want to get some comfort level that 10 I'm aware of what we're doing and I don't disagree. 11 Q. When you say a larger transaction may cause her 12 to come to you, do you have a specific number or range in 13 mind that would cause her to do that? 14 A. $10,000,000. 15 Q. $10,000,000 in license fee or something else? 16 A. $10,000,000 in license fees. But anything -- 17 but it might be a smaller deal, if it's a different 18 structure. But in terms of a discount in excess of 19 $10,000,000, she might come to me, she might not come to 20 me on a $10,000,000 deal. I don't think there's a firm 21 rule of when she chooses to let me know. It's what the 22 deal is. Ellison 01-20-04 9 00037 1 Q. Now, in the context of the approval for 2 discounts in the area of application software, are there 3 any guidelines that have been given to Ms. Catz regarding 4 what you think would or would not be acceptable in the 5 way of granting additional discounts? 6 A. I think it's situational so -- 7 Q. So there aren't any guidelines she's been given? 8 A.

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