Oracle Corporation et al v. SAP AG et al

Filing 1206

Declaration of Nargues Motamed in Support of 1202 Statement Joint Statement in Support of Evidentiary Issues filed byOracle International Corporation. (Attachments: # 1 Exhibit A-0059, # 2 Exhibit A-6329-1, # 3 Exhibit A-0367, # 4 Exhibit A-5042, # 5 Exhibit A-5997, # 6 Exhibit A-6042-1, # 7 Exhibit A-6205-1, # 8 Exhibit A-5193, # 9 Exhibit A-5995, # 10 Exhibit A-5058, # 11 Exhibit A-5002-1, # 12 Exhibit A, # 13 Exhibit B, # 14 Exhibit C, # 15 Exhibit D, # 16 Exhibit E, # 17 Exhibit F, # 18 Exhibit G, # 19 Exhibit H, # 20 Exhibit I, # 21 Exhibit J, # 22 Exhibit K, # 23 Exhibit L, # 24 Exhibit M, # 25 Exhibit N, # 26 Exhibit PTX 0008, # 27 Exhibit PTX 0014, # 28 Exhibit PTX 0161, # 29 Exhibit O, # 30 Exhibit P, # 31 Exhibit Q, # 32 Exhibit R, # 33 Exhibit PTX 4809, # 34 Exhibit PTX 4819, # 35 Exhibit PTX 0012, # 36 Exhibit PTX 0024, # 37 Exhibit PTX 0960, # 38 Exhibit PTX 7028, # 39 Exhibit S, # 40 Exhibit T, # 41 Exhibit U, # 42 Exhibit V, # 43 Exhibit W, # 44 Exhibit PTX 8040, # 45 Exhibit PTX 2582, # 46 Exhibit X, # 47 Exhibit Y, # 48 Exhibit PTX 8112, # 49 Exhibit PTX 8111, # 50 Exhibit PTX 8108)(Related document(s) 1202 ) (Howard, Geoffrey) (Filed on 8/2/2012)

CLAIRE SEBTI
November 20, 2009
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 1
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

ORACLE CORPORATION, a
Delaware corporation, ORACLE
USA, INC., a Colorado
corporation, and ORACLE
INTERNATIONAL CORPORATION, a
California corporation,
Plaintiffs,

)
)
)
)
)
)
)
)
)
) No. 07-CV-1658 (PJH)
)
)
)
)
)
)
)
)
)

vs.
SAP AG, a German corporation,
SAP AMERICA, INC., a Delaware
corporation, TOMORROWNOW,
INC., a Texas corporation, and
DOES 1-50, inclusive,
Defendants.
______________________________

VIDEOTAPED DEPOSITION OF
CLAIRE SEBTI
_________________________________
FRIDAY, NOVEMBER 20, 2009

HIGHLY

REPORTED BY:

CONFIDENTIAL - ATTORNEYS' EYES ONLY

HOLLY THUMAN, CSR No. 6834, RMR, CRR
(1-424336)

Merrill Legal Solutions
[phone]

CLAIRE SEBTI
November 20, 2009
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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to the services line of business, are you referring
to the License Updates and Product Support line?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: No. For cost of services,
I'm only referring to On Demand, Education, and
Consulting.
MR. McDONELL: Q. Do you use -- for the
License Updates and Product Support line of
business, do you use the terminology similar to cost
of goods sold or cost of services for that -- for
that line of business?
MR. JINDAL: Objection. Outside the scope.
Lacks foundation.
THE WITNESS: I believe we do. I would
have to check on a 10-K.
MR. McDONELL: Q. Okay. With respect to
the License Updates and Product Support line of
business, does that line include salary expenses?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Can you repeat the question,
please?
MR. McDONELL: Q. With -- referring to the
License Updates and Product Support line of
business, do expenses for that line of business
include salary expenses?

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MR. JINDAL: Can we take a -MR. McDONELL: Yeah, let's take a break.
THE VIDEO OPERATOR: Going off the record,
the time is 9:53.
(Recess from 9:53 a.m. to 10:00 a.m.)
THE VIDEO OPERATOR: We are back on the
record. The time is 10 o'clock.
(Deposition Exhibit 849 was marked for
identification.)
MR. McDONELL: Q. Ms. Sebti, I am showing
you what's been marked Exhibit 849. Can you take a
moment and familiarize yourself with it?
A. Yes. (Examining document.)
MR. JINDAL: First of all, this one might
have had a hidden link. No, it's just -MR. McDONELL: Is it the size of it?
MR. JINDAL: Yeah. Just long tabs.
MR. McDONELL: A lot of zeros in the back.
Q. Have you had a chance to look over what's
been marked as Exhibit 849?
A. Yes.
Q. What is it?
A. This is a Detailed Income Statement for the
Product Support and License Updates line of business
for specific companies.

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MR. JINDAL: Same objection.
THE WITNESS: My understanding is yes.
MR. McDONELL: Q. Do the expenses for the
License Updates and Support line of business include
commissions paid to salespersons?
MR. JINDAL: Objection. Outside the scope,
overbroad. Vague and ambiguous.
THE WITNESS: I am not sure. It would
include any salespeople who belong to the -specifically the support line of business.
MR. McDONELL: Q. Would the license
updates and support line of business expenses
include employee benefits?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: It does.
MR. McDONELL: Q. Does that same line of
business expense include travel and entertainment
expenses?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: It does.
MR. McDONELL: Q. Does the License Updates
and Product Support line of business include bad
debt expense?
MR. JINDAL: Same objection.
THE WITNESS: It does.

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Q. And which companies is it for?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: This is for the 11 company
codes that we have on page 1.
MR. McDONELL: Q. On the first page of
Exhibit 849?
A. Correct.
Q. Do you see there at the top, it's entitled
"Oracle Corporation" on the cover page, and it says,
Date Created: November 9, 2009.
Is that the date you created this report?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Yes, I did.
MR. McDONELL: Q. And it says, created by
C. Sebti. That's a reference to you?
A. This is correct.
Q. The first two line items on the table on
the first page refer to USA and USA Eliminating.
What is the reference to USA?
A. USA represents our Company Code 001.
Q. Does that refer to a particular legal
entity?
A. It -MR. JINDAL: Objection. Outside the scope.
Go ahead.

11 (Pages 38 to 41)
Merrill Legal Solutions
[phone]

CLAIRE SEBTI
November 20, 2009
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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THE WITNESS: It refers to a Oracle USA
legal entity.
MR. McDONELL: Q. What is the second entry
that reads, US Eliminating?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: This company is 01A, and it
also represents financial data for the legal
company, Oracle USA.
MR. McDONELL: Q. When you say ONA, what
do you mean by that?
A. This is the company code in our chart of
account.
Q. O1A is the company code, or O1A is the name
of an entity?
MR. JINDAL: I think she said 01A.
THE WITNESS: Zero 1A.
MR. McDONELL: Q. Oh, zero 1A.
A. And we call it "01A."
Q. Okay. Does US Eliminating refer to a legal
entity?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: It belongs to a legal entity.
It is a separate company code to capture specific
transactions related to that legal entity in our
chart of account.

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Statement for the support, Product Support & License
Update line of business of Company Code 001.
MR. McDONELL: Q. And this is for Oracle
USA?
A. That represents a portion of Oracle USA
legal entity.
Q. But when you say it represents a portion,
you mean the portion is the Product Support &
License Update line of business only?
MR. JINDAL: Objection. Misstates prior
testimony.
THE WITNESS: No. I mean represent a
portion in terms of company codes, as Oracle USA is
made of separate company codes.
MR. McDONELL: Q. Okay. But one of the
company codes relates to the Product Support &
License Updates line of business?
MR. JINDAL: Objection. Misstates prior
testimony.
THE WITNESS: It will depend if any entries
were effectively booked to the License Updates and
Product Support line of business in any of those
company codes.
MR. McDONELL: Q. Would you turn to the
next page, which is the third page of Exhibit 849,

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MR. McDONELL: Q. Which legal entity does
it belong to?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Oracle USA.
MR. McDONELL: Q. What specific
transactions related to that entity does it capture?
MR. JINDAL: Objection. Overbroad.
THE WITNESS: We use this company to record
remeasurement entries related to the intercompany
balances that Oracle USA has on -- in different
foreign currency.
We use that company to record tax
provision. We use this company to process our
fiscal recharge recharges every single month.
That's what I can think of right now.
MR. McDONELL: Q. Staying with Exhibit
849, would you turn to the second page, please,
which at the top says, Oracle Corporation Detailed
Income Statement. In the upper left-hand corner it
says, USA Product Support & License Updates.
Do you see that?
A. I do.
Q. What is this report?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: This is the Detailed Income

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please?
A. Yes.
Q. What is that?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: This is the follow-up of our
Detailed Income Statement.
MR. McDONELL: Q. So it's a continuation
of the Detailed Income Statement?
A. It is the continuation of the Detailed
Income Statement, correct.
Q. Okay. I want to turn you to the third page
of Exhibit 849, the one that says page 2 of 6 at the
bottom.
Do you see there, "Employee Related
Expenses"?
A. Yes.
Q. Can you -- and underneath it says,
"Salaries," and then there's a line item for salary.
Do you see that?
A. Yes.
Q. Can you tell me what's included in that
line item -MR. JINDAL: Objection.
MR. McDONELL: Q. -- generally speaking?
MR. JINDAL: Objection. Outside the scope.

12 (Pages 42 to 45)
Merrill Legal Solutions
[phone]

CLAIRE SEBTI
November 20, 2009
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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THE WITNESS: Which one? The total
salaries, or the line item "Salary," which has the
41 million, 42 million, Q1, Q2 '06?
MR. McDONELL: Q. Let's start with the
line item "Salary." What's included in that line
item?
A. I'm sorry, which one specifically? Because
there are -- so Salaries, Salary, and Total
Salaries.
Q. Okay. So -A. You want the salary?
Q. We're on Exhibit 849 on the third page
under the heading "Employee Related Expenses."
Right?
A. Yes.
Q. And then there's a subheading for
"Salaries"?
A. Correct.
Q. And underneath that first line item is
"Salary"?
A. Yes.
Q. And for Q1 Fiscal Year '06, it's
41,630,000. Right?
A. Yes.
Q. What does that number consist of?

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captured by Oracle, in general, so that they become
classified as related to the Product Support and
License Updates line of business?
MR. JINDAL: Objection. Outside the scope,
overbroad.
THE WITNESS: Again, I'm not familiar with
how this mapping occurs. But to the best of my
knowledge, as I said earlier, each employee is
mapped to a specific cost center, and any expenses
related to that employee would be incurred under
that specific cost center.
MR. McDONELL: Q. Okay. So for example,
you're an employee of Oracle USA today. True?
A. This is true.
Q. Are you -- what line of business are you
in?
A. I am in G&A.
Q. So do you have some number associated with
you or some code associated with you that results in
your salary and benefits being applied to the G&A
line of business?
A. This is -MR. JINDAL: Objection. Outside the scope.
THE WITNESS: This is correct.
MR. McDONELL: Q. And can you give me an

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MR. JINDAL: Objection. Outside the scope.
THE WITNESS: That would represent, to my
understanding, all the salary expenses, payroll,
compensation, of the employees in the support line
of business.
MR. McDONELL: Q. For Oracle USA?
A. For Oracle USA.
Q. How does Oracle USA identify which
employees are the employees in the support line of
business?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Each employee will belong to
a specific cost center. And I am not an expert in
this area, but it is my general understanding that
each cost center then rolls under only one LOB.
MR. McDONELL: Q. So if you are an
employee that has some responsibility for assisting
two LOBs, your salary will roll only to one of them
in Oracle's financial system?
MR. JINDAL: Objection. Outside the scope,
incomplete hypothetical, assumes facts not in
evidence.
THE WITNESS: I don't know.
MR. McDONELL: Q. With respect to these
other expenses under "Salaries," how are they

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example, what is -- do you know what that code is?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: I do.
MR. McDONELL: Q. What is it?
A. It's -MR. JINDAL: Same objection.
MR. McDONELL: Q. I'm sure it's very
interesting.
A. I think it's 0K93.
Q. 0K93?
A. Yes.
Q. So is that all G&A employees, they're 0K93?
MR. JINDAL: Objection. Outside the scope,
lacks foundation.
MR. McDONELL: Q. Or is that G&A
employees? Or how does it work?
A. This is only for my organization.
Q. Which is called what?
A. Which is called Consolidation.
Q. Consolidation. And Consolidation is a
subpart of a larger organization called General and
Administrative?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: This is correct.
MR. McDONELL: Q. So 100 percent of

13 (Pages 46 to 49)
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your -- Oracle's cost for having you as an employee
is rolled into that G&A line of business?
MR. JINDAL: Objection. Outside the scope.
Lacks foundation.
THE WITNESS: It is not completely true, as
we could reallocate costs under other line of
businesses. But again, I'm not an expert in that
area, and somebody from FP&A would definitely be.
MR. McDONELL: Q. Okay. So going back to
what we talked about before, whether, for example,
there were any -- strike that. Let me it start
over.
When we talked before about the fact that
you did not know whether there were any employees in
the research and development line of business who
were actually devoting some part of their time to
software support delivery activities, you're not an
expert in that, either. Correct?
A. I am not an expert.
Q. And if there was some allocation of those
expenses, you don't know about that. Correct?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: I don't know about the
allocations related to the employees.
MR. McDONELL: Q. Okay. Now, with respect

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Q. Okay. Is the same true with respect to the
group of expenses under the heading "Benefits," that
they get mapped to a line of business using a code
assigned to the employee?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Some will be directly booked
to those cost centers; some might be allocated.
MR. McDONELL: Q. Okay. Under the heading
"Benefits," those are -- am I correct that that is
basically employee benefits provided to employees?
A. This is my understanding.
Q. All right. Let's look at the group of
expenses under the heading "Travel and
Entertainment." Please tell us generally what's
included in that group of expenses.
A. My general understanding would be that any
airfare, lodging, car rental, any other restaurant
expenses related to that travel and entertainment,
would be included for the support line of business.
Q. Okay. And please tell us how those
expenses are picked up so that they can be put into
the Product Support and License Updates line of
business.
MR. JINDAL: Objection. Outside the scope,
overbroad.

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to -- well, let's go back to Exhibit 849, on the
third page.
We talked about salary expenses. Let's
talk about the line item -- or the group of expenses
entitled "Commission/Bonuses."
Do you see that?
A. I do.
Q. And generally speaking, what's included in
that section?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: It would include, to the best
of my knowledge, commissions earned from Support
Sales employees.
MR. McDONELL: Q. And how are those
captured so that they get included in this line of
business?
MR. JINDAL: Objection. Outside the scope.
Lacks foundation.
THE WITNESS: Those employees belong to a
cost center that is mapped to the support line of
business.
MR. McDONELL: Q. And is the mapping done
in the same way by a particular code that's assigned
to the employee?
A. This is correct.

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THE WITNESS: An employee would create its
own expense report. And by creating its expense
report, once approved, the expenses would be
reimbursed and would be actually mapped by nature to
one of those lines in that appropriate cost center.
MR. McDONELL: Q. Because the expense
report itself would have a -- the appropriate code
on it?
A. Because you enter your expense report under
your individual name.
Q. Okay. So it goes back to the employee's
code?
A. Exactly.
Q. All right. Then turning to the next page
of Exhibit 849, which is the fourth page, and at the
bottom center says, Page 3 of 6, do you see that?
A. Yes.
Q. What are the Documentation & Media expenses
in that line at the top?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: I don't know.
MR. McDONELL: Q. Under the next group of
expenses, there's a heading "Marketing
Communications." Do you know generally what those
expenses are?

14 (Pages 50 to 53)
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HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Those expenses would be
marketing expenses incurred directly by the support
line of business, to my best of -- best knowledge.
MR. McDONELL: Q. Do you know whether
there are any marketing expenses incurred by Oracle
USA that relate to promoting the business of the
Product Support & License Update line of business
that are not included?
A. I don't know.
MR. JINDAL: Objection. Outside the scope,
compound.
MR. McDONELL: Q. Let's turn to the
"Facilities" group of expenses. Do you see that?
A. I do.
Q. On the same page 3 of 6 in Exhibit 849?
Can you tell us generally what's included in those
expenses?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: These expenses would be the
facilities costs allocated to the support line of
business.
MR. McDONELL: Q. How are they allocated?
MR. JINDAL: Objection. Outside the scope,
overbroad.

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costs for those specific buildings that would then
allocate it back to the cost centers.
MR. McDONELL: Q. Lets turn to the next
group of expenses on the same page of Exhibit 849
under the heading "Computers, Voice & Data." Tell
us generally what's included in that group of
expenses.
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: My understanding is, those
expenses would relate to the computer expenses a
other communication expenses related to the support
line of business.
MR. McDONELL: Q. How are those expenses
captured so they can be allocated to that line of
business?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: I don't know.
MR. McDONELL: Q. Let's go to the next
group of expenses, "External Contractor Costs."
What is that?
MR. JINDAL: Same objection.
THE WITNESS: My understanding is, any
people working for Oracle under a specific contract,
and are not employees, would actually be captured
under that "External Contractors" line.

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THE WITNESS: We do have an allocation
methodology based on the square footage of each
building and floors allocated to specific cost
centers.
MR. McDONELL: Q. So can you explain how
that works? If you've got a building, and the top
floor is all Research and Development employees and
the bottom floor is all Product Support and License
Updates employees, how do you allocate it?
MR. JINDAL: Objection. Incomplete
hypothetical, outside the scope.
THE WITNESS: Well, I would prefer to defer
that to our allocation expert.
MR. McDONELL: Q. So you don't know?
A. I do have a vague understanding of how it
works.
Q. What's your understanding?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: So each building is actually
allocated to -- based on the people who are
occupying that building, would be -- square footage
would be allocated to each cost center based on the
people cost center occupying the building. And
every single month we go through what we call a mass
allocation process to reallocate all the facilities

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MR. McDONELL: Q. How are those costs
identified so they can be allocated to the Product
Support & License Update line of business?
MR. JINDAL: Objection. Outside the scope,
overbroad.
THE WITNESS: A PO, purchase order, would
have been entered by the support line of business,
using the support line of business cost center
hiring those employees -- those -- sorry, those
contractors. And therefore, any payments made to
those contractors would automatically be incurred
under that specific cost center, which is a support
line of business.
MR. McDONELL: Q. Let's turn to the next
group of expenses on Exhibit 849 entitled
"Professional & Recruiting Fees." What are those?
MR. JINDAL: Same objection.
THE WITNESS: Those are various costs
related to legal fees, accounting fees, other
professional and recruiting.
MR. McDONELL: Q. Do those all relate to
the hiring of employees?
MR. JINDAL: Objection. Outside the scope,
overbroad.
THE WITNESS: They do not all relate to

15 (Pages 54 to 57)
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CLAIRE SEBTI
November 20, 2009
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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hiring employees.
MR. McDONELL: Q. What else do they relate
to?
MR. JINDAL: Objection. Outside the scope,
overbroad, vague as to time.
THE WITNESS: I do see here, you know,
legal fees. I -- I don't know. I would have to,
you know -- I don't know exactly what they
represent.
MR. McDONELL: Q. Do you know how
professional and recruiting fees are identified so
that they can be allocated to the Product Support &
License Update line of business?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: The external recruiting fees,
again, a PO would have been opened by a support line
of business person, and when the PO is paid, then
the expense hits the cost center of that employee.
And you would have the expense incurred in
that cost center.
MR. McDONELL: Q. Let's turn to the group
of expenses in Exhibit 849 under the heading "Third
Party Royalties & Referral Fees." What's included
in that group of expenses?
MR. JINDAL: Objection. Outside the scope.

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MR. JINDAL: Same objection.
THE WITNESS: Our fiscal recharge process
will allocate costs that were incurred by specific
entities on behalf of other entities. It will
actually allocate that cost back to those entities
benefiting.
MR. McDONELL: Q. Could you give me an
example?
MR. JINDAL: Same objection.
THE WITNESS: An example. We do have -let's take an example in the license line of
business. And we do have a global line of business
where people are actually working out of a specific
country, paid by a specific country, but actually
working on a global project or, you know, global
customers, and the costs of those employees will
actually be reallocated to the specific countries
based on who is benefiting from those costs.
MR. McDONELL: Q. What records keep track
of that?
MR. JINDAL: Objection. Overbroad, vague
as to time.
THE WITNESS: We do have a -- what we call
a fiscal recharge GL.
MR. McDONELL: Q. Okay. So if a

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THE WITNESS: I do not know for referral
fees. I had -- I have a general understanding of
royalties to external companies, and so royalties
would be paid for any use of external companies'
products into our support line of business.
MR. McDONELL: Q. How are those expenses
identified so they can be allocated to the Product
Support & License Update line of business?
MR. JINDAL: Same objection.
THE WITNESS: I don't know. I would have
to defer to the royalty expert.
MR. McDONELL: Q. Okay. Let's now stay
with Exhibit 849, go to the page which is the fifth
page of the exhibit, and it says "Page 4 of 6" on
the bottom.
Do you have that?
A. I do.
Q. Do you see in the center there it says,
"LOB Charges"?
A. Yes.
Q. What does that term mean, "LOB Charges"?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Those LOB charges relate to
our fiscal recharge process.
MR. McDONELL: Q. What does that mean?

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particular employee falls into that situation where
they're, say, working -- living and working in
London physically, but actually working on a project
for a different line of business in the US, how do
you keep track of that?
MR. JINDAL: Objection. Incomplete
hypothetical, outside the scope, overbroad.
THE WITNESS: It is not the way it is done.
MR. McDONELL: Q. How is it done?
MR. JINDAL: Same objections.
THE WITNESS: The way it is done is, you -as an employee, you belong to a specific cost
center, which belongs to a specific LOB. And when I
talk about LOB here, it's at a lower level, at that
external LOB. Okay?
And we actually separate our LOBs by
different types, and we have what we call local
LOBs, divisional LOBs, regional LOBs, and global
LOBs. As an employee, you belong to one of those
four.
Then all the costs incurred in the
regional, divisional and global LOBs will actually
be pulled and reallocated based on a certain
methodology.
MR. McDONELL: Q. Does that process also

16 (Pages 58 to 61)
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reallocate expenses among the larger lines of
business, like research and development and Support
Delivery?
MR. JINDAL: Objection. Outside the scope,
overbroad.
THE WITNESS: It doesn't go across.
MR. McDONELL: Q. Okay. Does not go
across those lines of business? Okay.
A. It doesn't.
Q. Returning to Exhibit 849, on the same page
we've been looking at, which is the fifth page of
the document, it says, page 4 of 6 at the bottom.
Do you see there the -- toward the bottom, there's a
heading, "Uncontrollable Assigned Resources." What
does that mean?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: I don't know.
MR. McDONELL: Q. Okay. And just beneath
that line item, there's a line item that reads, "In
Country Network Charges Assigned Resources."
Do you know what that is?
MR. JINDAL: Same objection.
THE WITNESS: I don't know.
MR. McDONELL: Q. Would you turn to the
next page, please, of Exhibit 849, which is the 6th

Page 64
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fact that Oracle USA licenses some intellectual

10:34:40

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property from Oracle International Corporation?

10:34:42

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MR. JINDAL: Objection. Outside the scope.

10:34:44

6

THE WITNESS: It is my understanding.

10:34:45

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MR. McDONELL: Q. Pursuant to that

10:34:47

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arrangement, does Oracle US after the pay a royalty

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to Oracle International?

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those sublicense fee expenses will aggregate

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revenues from both license and support together and

MR. McDONELL: Q. Are you aware of the

MR. JINDAL: Objection. Outside the scope,
vague and ambiguous.
THE WITNESS: It is my understanding.
MR. McDONELL: Q. Where are those royalty
expenses of Oracle USA recorded?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: They would be recorded under
the License Sublicense Fee Expense.
MR. McDONELL: Q. Do you have any idea why
that expense is zero in this particular report?

MR. JINDAL: Objection. Outside the scope.
THE WITNESS: The process used to record

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page?
Actually, before I do that, can you go back
to the page we were just looking at, page 4 of 6?
At the top, third line item down, do you
see the "Bad Debt Expense" entry?
A. Yes.
Q. What is that?
MR. JINDAL: Same objection.
THE WITNESS: This would be the bad debt
expenses related to specific support line of
business receivables.
MR. McDONELL: Q. It's just principally
customer bad debt?
A. Correct.
Q. Okay. Let's turn the page to page 5 of 6,
please.
Under the heading "Intercompany Charges Oracle," there's a "License Sublicense Fee Expense"
item.
Do you see that?
A. I do.
Q. And what is that?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: This is the line item where
we record the sublicense fee income under various

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calculate a certain percentage, and will then -- the
accountants in the countries will record the
sublicense fee expense in total. And they will then
use that specific account, but might not be
splitting it between license and support, and will
just put it under one line, one line of business.
MR. McDONELL: Q. So it may be recorded
under the license line of business?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: I would have to check to make
sure.
MR. McDONELL: Q. But if that -- is that
your suspicion?
MR. JINDAL: Same objection.
THE WITNESS: It is. It could even be just
booked to something that is not line of
business-related.
MR. McDONELL: Q. But as you sit here
today, do you know where that's booked, where Oracle
USA's royalty expense paid to OIC is recorded in the
financial statements of Oracle USA?
MR. JINDAL: Objection. Outside the scope,
vague and ambiguous.
THE WITNESS: I don't know to which
specific line of business they are actually booking

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HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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this royalty expense.
May I take a break?
MR. McDONELL: Yes, let's take a break.
THE VIDEO OPERATOR: Going off the record,
the time is 10:37.
(Recess from 10:37 a.m. to 10:48 a.m.)
THE VIDEO OPERATOR: We're back on the
record. The time is 10:49.
MR. McDONELL: Q. Ms. Sebti, referring
again to Exhibit 849, to the third page of the
document, the one that has the employee-related
expenses, what types of employees are included in
that expense item?
MR. JINDAL: Objection. Outside the scope,
overbroad.
MR. McDONELL: Q. What are the functions
of those employees?
MR. JINDAL: Same objection.
THE WITNESS: These would be the employees
from the Support and License Update line of
business.
MR. McDONELL: Q. Do you know any
specifics about the types of employee skills that
are in that group, whether it's people who answer
the phones or the salespeople or engineers, or do

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your attorneys or any instructions between you and
your attorneys or any of your colleagues, you can go
ahead and answer.
THE WITNESS: I think I know.
MR. McDONELL: Q. Who?
MR. JINDAL: Again, Ms. Sebti, I don't want
to -- I want to counsel you not to reveal any
attorney-client communications. To the extent you
can answer without revealing any communications
between you and your attorneys, you can go ahead and
answer.
THE WITNESS: It's a colleague of mine.
MR. McDONELL: Q. Who is that?
A. Alex San Juan.
Q. Could you spell the last name, please? San
Juan, did you say?
A. S-A-N, J-U-A-N.
Q. How do you know that he's the one that
created this report?
MR. JINDAL: Can we go off the record for a
second?
MR. McDONELL: Yes.
THE VIDEO OPERATOR: Going off the record,
the time is 10:53.
(Recess from 10:53 a.m. to 10:55 a.m.)

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you know any of those details?
A. No, I don't know.
MR. JINDAL: Objection. Outside the scope.
(Deposition Exhibit 850 was marked for
identification.)
MR. McDONELL: Q. I'm showing you what's
been marked as Exhibit 850.
Would you take a moment and look it over
and familiarize yourself with it, please?
A. (Examining document.)
Q. Can you identify Exhibit 850 for the
record, please?
A. Yes. So this is the Detailed Income
Statement for all lines of business for specific
Oracle entities -- and company codes, sorry.
Q. Is this a report that you pulled for
purposes of -A. Excuse me?
Q. Is this a report that you created?
A. No.
Q. Do you know who did?
MR. JINDAL: Ms. Sebti, I want to counsel
you not to reveal any attorney-client
communications. To the extent you can answer
without revealing any communications between you and

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THE VIDEO OPERATOR: We're back on the
record. The time is 10:55.
MR. McDONELL: Could we read the question
back, please?
(Record read as follows:
Question: How do you know that he's the
one that created this report?)
THE WITNESS: Because he told me.
MR. McDONELL: Q. Okay. So you indicated
that this is a Detailed Income Statement for all
lines of business for specific Oracle entities and
company codes.
So is it for companies or company codes, or
both?
A. This is for company codes that would form
under my understanding the Oracle USA legal entity.
Q. So do you have also Exhibit 849 that we
just looked at?
A. Yes.
Q. Is there some way you can explain the
difference between the report at 849 and the report
at 850?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: The 849 is a subset of the
850.

18 (Pages 66 to 69)
Merrill Legal Solutions
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CLAIRE SEBTI
November 20, 2009
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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MR. McDONELL: Q. And it's a subset
defined by what?
MR. JINDAL: Same objection.
THE WITNESS: By line of business.
MR. McDONELL: Q. Okay. So 849 was
limited to the Product Support & License Update line
of business?
A. This is correct.
Q. Okay. All right. So then staying with
Exhibit 850 -- by the way, all these reports are
reports that you just pull off the system in the
normal course of business. These were not specially
created for this case or anything. Is that right?
MR. JINDAL: Objection. Compound.
THE WITNESS: This is correct.
MR. McDONELL: Q. So the -- on the first
page of Exhibit 850, the cover page, can you explain
what that table means?
A. This table represents all the company codes
for which this Detailed Income Statement has been
run.
Q. So it includes all of Oracle USA. Is that
right?
A. It is my understanding.
Q. And then the page 5 reference is to

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the acquisition. Correct?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: It is my understanding.
MR. McDONELL: Q. And that entity was
acquired by Oracle. True?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: Yes.
MR. McDONELL: Q. And was that entity
renamed Oracle USA?
A. It is my understanding.
Q. So basically, the -- I think what you're
telling us is that the operations that were -pre-acquisition were under Oracle USA, got moved
into the entity that was previously known as
PeopleSoft USA and renamed Oracle USA. Is that
right?
MR. JINDAL: Objection. Misstates the
prior testimony.
THE WITNESS: I need to rephrase.
MR. McDONELL: Q. Okay.
A. So -- and everything is system-related, not
legal entity. Okay? So -Q. You're not talking about the accounting for
these operations. Correct?
A. I am talking about the company codes used

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PeopleSoft US. What is that a reference to?
A. This would be the PeopleSoft US company
code.
Q. So PeopleSoft was acquired by Oracle in
January 2005. Is that your understanding?
MR. JINDAL: Objection. Outside the scope.
THE WITNESS: It is my understanding.
MR. McDONELL: Q. Was there a PeopleSoft
company code that existed after the acquisition?
A. It is my understanding.
Q. Does it continue to exist?
A. It does continue to exist.
Q. Okay. What does it cover that's -- how
does that relate to Oracle USA?
A. So we do create company codes at times of
acquisition. And PO1 represented the PeopleSoft US
company that was acquired.
My understanding is that this company
changed its name, and the Oracle USA operations were
then sold to that company. And from a business -from a systems standpoint, sorry, we continued using
the Company Code 001 to record the activity under
the newly combined entities.
Q. So is the -- there was a legal entity, a
corporation, known as PeopleSoft USA Inc. prior to

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to capture the financial information of that entity.
Q. Okay.
A. Okay? So after the combination of the US
Oracle operations with the newly named Oracle USA -Q. Which was previously named PeopleSoft USA?
A. Which was previously named PeopleSoft USA.
Q. Okay, please continue.
A. All of the financial informations of those
combined operations is stated under Company 001.
Q. Okay. Thank you.
Okay. So then going to the first page of
Exhibit 850, that last line item there with the code
P01, what gets recorded under that code?
MR. JINDAL: Objection. Vague as to time.
MR. McDONELL: Q. Or is that just for
historical operations?
A. It is right.
Q. Historical?
A. Historical.
Q. So prior to the combination?
A. This is what it is supposed to be.
Q. Okay. So if we look at this same
Exhibit 850, and go to the last five pages, so pages
1 of 5 from the back -- are you there?
A. Yes, I am.

19 (Pages 70 to 73)
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