LEGAL PROCEEDINGS
Derivative Litigation Concerning
Oracles NetSuite Acquisition
On May 3 and July 18, 2017, two alleged stockholders filed separate derivative lawsuits in the
Court of Chancery of the State of Delaware, purportedly on Oracles behalf. Thereafter, the court consolidated the two derivative cases and designated the July 18, 2017 complaint as the operative complaint. The consolidated lawsuit was
brought against all the then-current members and one former member of our Board of Directors, and Oracle as a nominal defendant. Plaintiff alleged that the defendants breached their fiduciary duties by causing Oracle to agree to purchase NetSuite
Inc. (NetSuite) at an excessive price. The complaint sought (and the operative complaint continues to seek) declaratory relief, unspecified monetary damages (including interest), and attorneys fees and costs. The defendants filed a motion to
dismiss, which the court denied on March 19, 2018.
On May 4, 2018, our Board of Directors established a Special Litigation Committee
(the SLC) to investigate the allegations in this derivative action. Three non-employee directors served on the SLC. On August 15, 2019, the SLC filed a letter with the court, stating that the SLC believed
that plaintiff should be allowed to proceed with the derivative litigation on behalf of Oracle. After the SLC advised the Board that it had fulfilled its duties and obligations, the Board withdrew the SLCs authority, except that the SLC
maintained certain authority to respond to discovery requests in the litigation.
After plaintiff filed the July 18, 2017 complaint, an
additional plaintiff joined the case. Plaintiffs filed several amended complaints, and filed their most recent amended complaint on December 11, 2020. The operative complaint asserts claims for breach of fiduciary duty against our Chief
Executive Officer, our Chief Technology Officer, the estate of Mark Hurd (our former Chief Executive Officer who passed away on October 18, 2019), and two other members of our Board of Directors. Oracle is named as a nominal defendant. On
December 11, 2020, the estate of Mark Hurd and the two other members of our Board of Directors moved to dismiss this complaint, and a hearing on this motion was held on February 16, 2021. On June 21, 2021, the court granted this
motion as to the estate of Mark Hurd and one Board member and denied the motion as to the other Board member, who filed an answer to the complaint on August 9, 2021. On December 28, 2020, our Chief Executive Officer, our Chief Technology
Officer, and Oracle as a nominal defendant filed answers to the operative complaint.
The parties are conducting discovery. Trial is scheduled to
commence on July 18, 2022.
While Oracle continues to evaluate these claims, we do not believe this litigation will have a material impact on
our financial position or results of operations.
Securities Class Action and Derivative Litigation Concerning Oracles Cloud
Business
On August 10, 2018, a putative class action, brought by an alleged stockholder of Oracle, was filed in the U.S. District Court
for the Northern District of California against us, our Chief Technology Officer, our then-two Chief Executive Officers, two other Oracle executives, and one former Oracle executive. As noted above,
Mr. Hurd, one of our then-two Chief Executive Officers, passed away on October 18, 2019. On March 8, 2019, plaintiff filed an amended complaint. Plaintiff alleges that the defendants made or are
responsible for false and misleading statements regarding Oracles cloud business. Plaintiff further alleges that the former Oracle executive engaged in insider trading. Plaintiff seeks a ruling that this case may proceed as a class action, and
seeks damages, attorneys fees and costs, and unspecified declaratory/injunctive relief. On April 19, 2019, defendants moved to dismiss plaintiffs amended complaint. On December 17, 2019, the court granted this motion, giving
plaintiffs an opportunity to file an amended complaint, which plaintiff filed on February 17, 2020. On April 23, 2020, defendants filed a motion to dismiss, and the court held a hearing on this motion on September 24, 2020. On
March 22, 2021, the court granted in part and denied in part this motion. The court dismissed the action as to one Oracle executive and the former Oracle executive. The court permitted plaintiff to proceed with only a narrow omissions theory
against the remaining defendants. On April 21, 2021, defendants filed an answer to the complaint. The parties are currently conducting discovery. Trial is scheduled to commence on November 6, 2023. We believe that we have meritorious
defenses against this action, and we will continue to vigorously defend it.
On February 12 and May 8, 2019, two stockholder derivative
lawsuits were filed in the United States District Court for the Northern District of California. The cases were consolidated, and on July 8, 2019, a single plaintiff filed a consolidated complaint. The consolidated complaint brought various
claims relating to the 10b-5 class action described immediately above. The parties agreed to stay the derivative case pending resolution of defendants motion to dismiss the securities case, which the
court granted in part and denied in part on March 22, 2021.
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2021 Annual Meeting of Stockholders
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