Oracle 2013 Annual Report Download - page 137

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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2014
oral argument has not yet been scheduled. We cannot currently estimate a reasonably possible range of loss for this action. We believe that we
have meritorious defenses against this action, and we will continue to vigorously defend it.
Derivative Litigations and Related Action
On September 30, 2011, a stockholder derivative lawsuit was filed in the Delaware Court of Chancery and a second stockholder was permitted to
intervene as a plaintiff on November 15, 2011. At an August 22, 2012, hearing, the court dismissed certain claims but permitted certain claims
for breach of fiduciary duty to proceed. On May 3, 2013, plaintiffs filed an amended complaint. The derivative suit is brought by two alleged
stockholders of Oracle, purportedly on Oracle’s behalf, against one former director and all but two of our current directors, including against our
Chief Executive Officer as an alleged controlling stockholder. Plaintiffs allege that Oracle’s directors breached their fiduciary duties in agreeing
to purchase Pillar Data Systems, Inc. at an excessive price. Oracle’s acquisition of Pillar is structured as an earn out, under which Oracle is
scheduled to make a single payment, if any, by November 30, 2014, to Pillar’s former shareholders based on an agreed-upon Earn-Out formula.
Plaintiffs seek declaratory relief, rescission of the Pillar Data transaction, damages, disgorgement of our Chief Executive Officer’s alleged
profits, disgorgement of all compensation earned by defendants as a result of their service on Oracle’
s Board or any committee of the Board, and
an award of attorneys’ fees and costs.
On June 13, 2014, plaintiffs and defendants filed a Stipulation and Agreement of Compromise, Settlement and Release, under which our Chief
Executive Officer agreed to pay to Oracle 95% of any and all amounts, if any, that are paid to him under the Pillar earn out. Oracle will pay
plaintiffs’ attorneys’ fees and costs, which will not exceed $15 million. The settlement is subject to approval by the Delaware Chancery Court,
which has scheduled a fairness hearing for August 12, 2014, at 10:00 a.m., Eastern Time.
While the outcome of the derivative litigation cannot be predicted with certainty, we do not believe that the outcome will result in losses that are
materially in excess of amounts already recognized, if any.
Other Litigation
We are party to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business,
including proceedings and claims that relate to acquisitions we have completed or to companies we have acquired or are attempting to acquire.
While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any of these matters, individually
or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any.
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