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 the Board, and Oracle as a nominal defendant. Plaintiff alleges that the defendants breached their fiduciary duties by causing Oracle to agree to purchase NetSuite Inc. (NetSuite)
at an excessive price. Plaintiff seeks 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 March 28, 2018, pursuant to a stipulation, all of the
individual defendants, except for our CTO and one of our CEOs, were dismissed from this case. On May 4, 2018, the remaining defendants answered plaintiffs complaint.
On May 4, 2018, the Board established a Special Litigation Committee (the SLC) to investigate the allegations in this derivative action. Three non-employee directors serve on the SLC. On July 22, 2019, the court permitted plaintiff to file an amended complaint, adding again the defendants who had been dismissed from the case in March 2018. The amended
complaint also brought an aiding-and-abetting claim against NetSuites former CEO and NetSuites former CTO. 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. On August 30, 2019, the Board members that were added as defendants on July 22, 2019 moved to dismiss
the amended complaint. On September 12 and 13, NetSuites former CEO and NetSuites former CTO moved to dismiss the amended complaint. No hearing date has been set for these motions. Plaintiff is pursuing discovery. No trial date has been
set for this matter.
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.
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 CTO, our two CEOs, two other Oracle executives, and one former Oracle executive. 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. This motion is fully briefed and is scheduled for oral argument on
October 17, 2019. We believe that we have meritorious defenses against this action, and we will continue to vigorously defend it.
On
February 12, 2019, a stockholder derivative lawsuit was filed in the U.S. District Court for the Northern District of California. The derivative suit is brought by two alleged stockholders of Oracle, purportedly on Oracles behalf, against
all members of the Board, and Oracle as a nominal defendant. Plaintiffs claim that the alleged actions described in the August 10, 2018 class action discussed above caused harm to Oracle, and that the Board members violated their fiduciary
duties of care, loyalty, reasonable inquiry, and good faith by failing to prevent this alleged harm. Plaintiffs also allege that defendants actions constitute gross mismanagement, waste, and securities fraud. Plaintiffs seek a ruling that this
case may proceed as a derivative action, a finding that defendants are liable for breaching their fiduciary duties, an order directing defendants to enact corporate reforms, attorneys fees and costs, and unspecified equitable relief. On
April 26, 2019, the court approved a stay of this action, which will be lifted if the class action discussed above is dismissed, if the motion to dismiss the class action is denied, or if either party voluntarily chooses to lift the stay.
On May 8, 2019, a second derivative action was filed in the U.S. District Court for the Northern District of California. The
derivative suit is brought by an alleged stockholder of Oracle, purportedly on Oracles behalf, against our CTO, our two CEOs, one former Oracle executive, and Oracle as a nominal defendant. Plaintiff claims that the alleged actions described
in the August 10, 2018 class action discussed above caused harm to Oracle, and plaintiff raises further allegations of impropriety relating to Oracles stock buybacks and acquisition of NetSuite. Plaintiff asserts claims for violation of
securities laws, violation of fiduciary duties, contribution and indemnification. Plaintiff seeks a ruling that the case may proceed as a derivative action, and seeks damages, declaratory and other equitable relief, attorneys and expert fees
and costs. On June 4, 2019, the court issued an order finding that this case was related to the derivative case above and staying the case under the courts prior stay order. On July 8, 2019, plaintiffs in the two derivative actions
filed a consolidated complaint. The actions remain stayed.
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.
54
2019 Annual Meeting of Stockholders