Library cache

Below is an extract from Performance Tuning Docs pg 14-21

"If an application makes an execute call for a SQL statement, and if
the executable
portion of the previously built SQL statement has been aged out (that
is,
deallocated) from the library cache to make room for another statement,
then Oracle
implicitly reparses the statement, creating a new shared SQL area for
it, and
executes it"

1. >>If an application makes an execute call for a SQL statement, and
if the executable
>>>>portion of the previously built SQL statement

What is this executable portion of a sql Statement? Does it mean that
we have a SQL Statement and some Executable version of the query in
Library cache ??
2. Does the above extract means that we have the sql statement in the
library cache, but
the executable version is aged out ?? In waht situations is it
possible. ??

Thanks
Chintu