Oracle 2006 Annual Report Download - page 64

Table of Contents
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our
disclosure controls and procedures and internal control over financial reporting are effective at the reasonable
assurance level. However, our management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or
mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of
two or more people or by management override of the controls. The design of any system of controls also is
based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions; over time,
controls may become inadequate because of changes in conditions, or the degree of compliance with policies
or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item is incorporated by reference from the information contained in our
Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation
of proxies for our Annual Meeting of Stockholders to be held on November 2, 2007.
Item 11. Executive Compensation
The information required by this Item is incorporated by reference from the responsive information to be
contained in our Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Equity Compensation Plan Information
May 31, 2007
Number of Number of Shares
Shares to be Issued Weighted Average Remaining Available for
Upon Exercise of Exercise Price of Future Issuance Under
Outstanding Options, Outstanding Options, Equity Compensation
Warrants and Rights Warrants and Rights Plans(1)
Equity compensation plans
approved by
stockholders 356,148,558 $ 13.52 432,842,962(2)
Equity compensation plans
not approved by
stockholders(3) 79,802,812 $ 13.93 —
Total 435,951,370 432,842,962
(1) These numbers exclude the shares listed under the column heading “Number of Shares to be Issued Upon
Exercise of Outstanding Options, Warrants and Rights.”
(2) This number includes 84,212,131 shares available for future issuance under the Oracle Corporation
Employee Stock Purchase Plan (1992).
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Source: ORACLE CORP, 10-K, June 29, 2007 Powered by Morningstar® Document Research℠