Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 1 of 92
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`KIRBY McINERNEY LLP
`Robert J. Gralewski, Jr. (#196410)
`600 B Street, Suite 2110
`San Diego, California 92101
`Telephone: (619) 784-1442
`Email: bgrawleski@kmllp.com
`
`Ira M. Press
`Daniel Hume
`Thomas W. Elrod
`Meghan J. Summers
`250 Park Avenue, Suite 820
`New York, New York 10117
`Telephone: (212) 371-6600
`Email: ipress@kmllp.com
`dhume@kmllp.com
`telrod@kmllp.com
`msummers@kmllp.com
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`
`Attorney for Plaintiffs
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`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`KINGSTOWN PARTNERS MASTER LTD.,
`KINGSTOWN PARTNERS II, LP, KTOWN, LP,
`and KINGFISHERS, LP
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`Plaintiff,
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`Case No.
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`COMPLAINT FOR VIOLATIONS
`OF THE FEDERAL SECURITIES
`LAWS
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`
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`v.
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`DXC TECHNOLOGY COMPANY, HEWLETT
`PACKARD ENTERPRISE COMPANY, RISHI
`VARNA, TIMOTHY C. STONESIFER, JEREMY
`K. COX, MUKESH AGHI, AMY E. ALVING,
`DAVID HERZOG, SACHIN LAWANDE, J.
`MICHAEL LAWRIE, JULIO A. PORTALATIN,
`PETER RUTLAND, MANOJ P. SINGH,
`MARGARET C. WHITMAN, ROBERT F.
`WOODS, and PAUL N. SALEH,
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`Defendants.
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 2 of 92
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`TABLE OF CONTENTS
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`I.
`II.
`III.
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`IV.
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`INTRODUCTION.............................................................................................................. 1
`JURISDICTION AND VENUE ......................................................................................... 7
`PARTIES ........................................................................................................................... 8
`A.
`Plaintiffs ................................................................................................................. 8
`B.
`Defendants.............................................................................................................. 8
`SECURITIES ACT ALLEGATIONS................................................................................10
`A.
`DXC’s Business and History..................................................................................10
`B.
`The Merger and Issuance of DXC Shares ...............................................................11
`C.
`Misrepresentation of DXC’s Workforce Optimization Plan ....................................12
`D.
`DXC’s Extreme Workforce Reduction Plan ...........................................................13
`1.
`The Hilton Complaint.................................................................................13
`2.
`CSC’s Pre-Merger Cuts ..............................................................................13
`3.
`DXC’s Harmful Implementation of Its Extreme Workforce
`Reduction Plan ...........................................................................................14
`The Disastrous Impact of the Extreme Workforce Reduction Plan .........................17
`E.
`THE SECURITIES ACT DEFENDANTS’ ACTIONABLE MISREPRESENTATIONS
`AND OMISSIONS IN DXC’S REGISTRATION STATEMENT .....................................21
`A.
`Material Misrepresentations ...................................................................................21
`B.
`Failure to Make Required Disclosures....................................................................23
`1.
`Disclosure Obligations Under the Securities Act ........................................23
`2.
`Item 303 Disclosure Requirements .............................................................24
`3.
`Item 503 Disclosure Requirements .............................................................25
`CLAIMS BROUGHT PURSUANT TO THE SECURITIES ACT ....................................28
`VI.
`VII. EXCHANGE ACT ALLEGATIONS ................................................................................30
`VIII. THE EXCHANGE ACT DEFENDANTS’ ACTIONABLE MISREPRESENTATIONS
`AND OMISSIONS ............................................................................................................31
`A.
`Material Misrepresentations in the Registration Statement .....................................31
`B.
`The Exchange Act Defendants’ False and Misleading Statements and
`Omissions Concerning DXC’s Revenue Growth ....................................................33
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`V.
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 3 of 92
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`C.
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`D.
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`E.
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`F.
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`The Fiscal Year 2018 Guidance ..................................................................33
`1.
`The Fiscal Year 2019 Guidance ..................................................................36
`2.
`Other False and Misleading Statements Concerning DXC’s Revenue .........38
`3.
`The Exchange Act Defendants’ False and Misleading Statements and
`Omissions Concerning DXC’s Workforce Management and “Optimization” .........40
`The Exchange Act Defendants’ False and Misleading Statements and
`Omissions Concerning DXC’s “Investment in People” ..........................................47
`The Exchange Act Defendants’ False and Misleading Statements and Omissions
`Concerning DXC’s Digital Growth ........................................................................53
`The Exchange Act Defendants Overstated the Value of the Company’s Largest
`Asset......................................................................................................................54
`THE TRUTH EMERGES .................................................................................................56
`The Truth Emerges as the Exchange Act Defendants Reveal an Enormous
`A.
`Revenue Shortfall and Issue Revised Guidance Showing Decline, Not Growth ......56
`1.
`The October 24, 2018 Corrective Disclosure ..............................................56
`2.
`The November 6, 2018 Corrective Disclosure ............................................58
`3.
`The August 8, 2019 Corrective Disclosure .................................................61
`SCIENTER ALLEGATIONS ............................................................................................63
`DXC’s Former Head of Global Delivery Exposes the Exchange Act
`A.
`Defendants’ Deception...........................................................................................63
`1.
`CSC’s Pre-Merger Cuts ..............................................................................65
`2.
`DXC’s Harmful Implementation of Its Extreme Workforce
`Reduction Plan ...........................................................................................65
`Former Employees Corroborate that the Exchange Act Defendants Made
`“Chaotic” and “Sub-Optimal” Firing Decisions .....................................................69
`The Exchange Act Defendants Personally Learned about “Negative Impacts
`on Customer Satisfaction” from Their Workforce Reductions ................................73
`The Exchange Act Defendants Knew that They Could Not Bring on the
`Resources Needed to Support Their Promised Growth ...........................................75
`The Exchange Act Defendants Had Access to, and Knowledge of, Information
`Undermining Their Projections and Revenue Guidance .........................................78
`The Exchange Act Defendants Classified “Digital” Offerings to Manipulate
`the Market .............................................................................................................80
`The Individual Exchange Act Defendants Had a Motive to Commit Fraud .............82
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`B.
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`C.
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`D.
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`E.
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`F.
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`G.
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`IX.
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`X.
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 4 of 92
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`PRESUMPTION OF RELIANCE .....................................................................................84
`XI.
`INAPPLICABILITY OF STATUTORY SAFE HARBOR ................................................85
`XII.
`XIII. CLAIMS BROUGHT PURSUANT TO THE EXCHANGE ACT .....................................85
`XIV. PRAYER FOR RELIEF ....................................................................................................87
`XV.
`JURY DEMAND ..............................................................................................................87
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 5 of 92
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`Plaintiffs Kingstown Partners Master Ltd., Kingstown Partners II, LP, Ktown, LP, and
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`Kingfishers, LP (collectively, “Plaintiffs”), by and through their attorneys, allege the following based
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`upon personal knowledge as to Plaintiffs and Plaintiffs’ own acts, and upon information and belief
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`as to all other matters, based upon, inter alia, the investigation conducted by and through Plaintiffs’
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`attorneys. Such investigation included, among other things, a review of Defendants’ public
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`statements and announcements, U.S. Securities and Exchange Commission (“SEC”) filings, wire and
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`press releases published by and regarding DXC Technology Company, securities analysts’ reports,
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`news stories, and the documents filed in Hilton v. DXC Technology Company, No. 1:19-cv-01157-
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`PKC (S.D.N.Y.) (the “Hilton Action”), In re DXC Technology Company Securities Litigation, No.
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`1:18-cv-01599-AJT-MSN (E.D. Va.) (the “In re DXC Class Action”), and Costanzo v. DXC
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`Technology Company, No. 5:19-cv-05794-BLF (N.D. Cal.) (the “Costanzo Action”). Plaintiffs
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`believe that additional substantial evidentiary support exists for the allegations set forth herein and
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`will be available after a reasonable opportunity for discovery.
`I.
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`INTRODUCTION
`1.
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`Plaintiffs bring this action pursuant to Sections 10(b) and 20(a) of the Securities
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`Exchange Act of 1934 (the “Exchange Act”), and SEC Rule 10b-5 promulgated thereunder, and
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`Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).
`2.
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` DXC Technology Company (“DXC or the “Company”) is an information technology
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`(“IT”) company that began trading on the New York Stock Exchange (“NYSE”) on April 3, 2017.
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`The Company was formed in April 2017, when Hewlett Packard Enterprise Company (“HPE”) spun
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`off one of its five business segments, the Enterprise Services segment, and merged it with Computer
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`Sciences Corporation, Inc. (“CSC”) to form the company known as DXC (the “Merger”). During the
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`period from March 31, 2017 through August 9, 2019 (the “Relevant Period”) Plaintiffs acquired
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`shares of DXC securities at prices that were artificially inflated as a result of Defendants’ violations
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`of the securities laws.
`3.
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`The Securities Act Defendants (defined in ¶ 43 below) issued the prospectus and
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`registration statement (the “Registration Statement”) to solicit investors to purchase DXC shares and
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`to convince CSC shareholders to vote in favor of the Merger, pursuant to which they would exchange
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 6 of 92
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`their CSC shares for DXC shares. The Registration Statement touted the more than $1 billion in
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`synergies that DXC would achieve in the first year after the Merger due to a “workforce
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`optimization” plan. This plan purportedly involved the “elimination of duplicative roles and other
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`duplicative general, administrative and overhead costs” and would “align [DXC’s] costs with its
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`revenue trajectory.” In addition, the Registration Statement highlighted the size, breadth, and
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`experience of DXC’s workforce, as well as the newly formed Company’s ability to optimize its
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`workforce through improved hiring and retention practices.
`4.
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`These and similar representations in the Registration Statement were materially false
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`and misleading when made because the Securities Act Defendants failed to disclose to investors that:
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`(a) the so-called “workforce optimization” plan actually involved crippling DXC’s workforce
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`infrastructure; (b) DXC planned to jettison tens of thousands of employees, including some of its
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`most highly skilled and longest-tenured employees, on a precipitous timeline; (c) these workforce
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`reductions were made to inflate reported earnings and other financial metrics in the short-term at the
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`expense of client service delivery; (d) DXC planned $2.7 billion of cost reductions in the first year,
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`nearly double the $1.5 billion run rate savings target that was made public; (e) as a result of these
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`workforce reductions, DXC materially hampered its ability to deliver on client contracts,
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`endangering longer-term revenue growth; (f) internally, senior executives had voiced concerns that
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`targeted reductions would be unachievable without causing massive damage to the Company’s
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`customer relationships; and (g) the aggressive personnel cuts seriously harmed DXC’s ability to
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`attract and retain high-quality personnel, further undermining client service delivery.
`5.
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`Instead of a rational, measured workforce optimization process designed to eliminate
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`duplication and align costs with revenue, as represented in the Registration Statement, at the time of
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`the Merger, DXC had already planned a dramatic and accelerated workforce reduction at a scale
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`much larger than what was indicated to investors. This plan involved major undisclosed risks that
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`the cuts to DXC’s workforce would be too large, too soon, resulting in client dissatisfaction and the
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`departure of key employees, which, consequently, would materially harm DXC’s ability to secure
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`and generate revenue on new or renewed contracts. Pursuant to Items 303 and 503 of SEC Regulation
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 7 of 92
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`S-K, the Registration Statement was required to disclose these specific risks and uncertainties.
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`Defendants failed to do so.
`6.
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`Throughout the Relevant Period, the Exchange Act Defendants (defined in ¶ 44 below)
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`engaged in a ruthless cost-cutting and “workforce optimization” strategy despite having been
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`repeatedly warned, including by their most senior management, that their chaotic cuts to the
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`Company’s workforce and facilities were resulting in extreme customer dissatisfaction, the departure
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`of key employees, and impeding the Company’s ability to secure and generate revenue on new
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`contracts. Because confronting these facts contradicted the growth thesis that the Exchange Act
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`Defendants had sold to the market, the Exchange Act Defendants ignored these red flags and instead
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`chose to deliberately mislead investors about the purported success of their reorganization efforts—
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`artificially inflating DXC’s stock price and reaping tens of millions of dollars in insider stock sales
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`and unwarranted performance-based compensation awards for themselves.
`7.
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`On multiple occasions during the Relevant Period, the Exchange Act Defendants made
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`positive statements about DXC’s staffing and customer satisfaction. Defendant Lawrie, for example,
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`repeatedly stated that DXC had “improved service levels for our clients,” and that the Company’s
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`reorganization efforts were having “an enormously positive impact on our business.” He particularly
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`highlighted supposed increases in “customer satisfaction” and on multiple occasions represented that
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`the Company was performing well on its current client contracts “while staffing the required labor
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`for new business.” Defendants also continuously emphasized that they were investing heavily in
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`training their “critical” workforce.
`8.
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`Along with these statements, the Exchange Act Defendants provided positive revenue
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`and other guidance to the market. For example, on May 24, 2018, Defendants Lawrie and Saleh told
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`the market to expect $21.5 billion to $22 billion in revenue for fiscal 2019—guidance indicating that
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`the Exchange Act Defendants’ transformative plan was working and had managed to moderate and
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`perhaps even turn around legacy IT industry trends. They reiterated this guidance on August 7, 2018,
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`and again a week later during the Company’s annual shareholder meeting. During that meeting, they
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`again stated that DXC was “providing unsurpassed value for [its] clients.”
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 8 of 92
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`9.
`well behind the scenes at DXC. An August 17, 2018 article in The Register reported that employees at
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`In late August 2018, reports began to surface in trade publications that all was not
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`DXC had stated that the Company was struggling to perform its client contracts because of the
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`massive workforce reductions. The Exchange Act Defendants attempted to quash those reports,
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`holding a series of meetings with analysts covering DXC and assuring those analysts that the
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`Company’s clients were satisfied and the Company was well positioned for sustained growth. This
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`effort had the desired effect, ensuring that DXC’s stock price did not fall as analysts issued positive
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`reports in early September 2018.
`10.
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`At that same time, the Individual Exchange Act Defendants took advantage of DXC’s
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`inflated stock price to enrich themselves through tens of millions of dollars in insider sales. For
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`instance, during the eight-month period prior to the partial corrective disclosure of October 2018,
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`Defendant Lawrie sold 110,540 shares of DXC stock—more than 17% of his holdings—for personal
`proceeds of more than $10 million. Defendant Saleh, in turn, sold a staggering seventy-seven percent
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`of his personal holdings for more than $9 million in proceeds during the same period. All of these
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`sales were made at the same time that these Defendants were making aggressively positive statements
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`to the market regarding the supposed success of DXC’s reorganization efforts.
`11.
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`Unfortunately for investors, the reality inside DXC stood in stark contrast to the
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`Exchange Act Defendants’ rosy public statements. As Defendants Lawrie and Saleh knew, in their
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`efforts to reduce costs in order to report seemingly strong short-term financial performance, they had
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`caused DXC to make such drastic workforce reductions that the Company was becoming unable to
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`deliver on its client contracts and client dissatisfaction was running at an all-time high. Numerous
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`former employees of DXC have stated that the so-called “workforce optimization” the Exchange Act
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`Defendants had enacted was, in reality, little more than earnings management in disguise—a system
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`of arbitrary quotas that fired workers by the tens of thousands and was selectively timed to present
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`the most favorable quarterly and yearly financial reports. As detailed below, according to the
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`Consolidated Class Action Complaint (the “CAC”) filed in the In re DXC Class Action, former
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`employees have explained that these cuts were made with no real plan other than to improve the
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 9 of 92
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`Company’s short-term results and targeted knowledgeable, longer-tenured (and thus more
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`expensive) senior personnel.
`12.
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`There can be no question that the Exchange Act Defendants knew their public
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`assurances about the success of DXC’s reorganization efforts and long-term business prospects were
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`false. DXC’s most senior executives expressly told the Exchange Act Defendants about the severe
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`issues behind the scenes. The workforce reductions fell most heavily on the largest of the Company’s
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`three divisions, referred to as “Global Delivery,” which included the tens of thousands of employees
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`who were tasked with actually performing the contracts DXC had with its clients.
`13.
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`Executive Vice President Stephen J. Hilton (“Hilton”) was the head of Global
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`Delivery, one of DXC’s three main operating divisions (the others being “Sell” and “Build”). Global
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`Delivery was the division that housed the Company’s IT personnel who served clients in the field.
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`Because most of DXC’s personnel were located in Global Delivery, most of the Company’s
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`workforce cuts were to occur within that division. As alleged in a complaint that he filed against
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`DXC, Hilton warned that “[p]recipitous cuts in Global Delivery could be disastrous for DXC’s long-
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`term revenue, because those cuts would have a direct impact on customer satisfaction, a point
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`routinely expressed to Hilton by his ‘Sell’ and ‘Build’ peers.” Hilton stated that the plan for $2.7
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`billion in cuts in Global Delivery would entail having “to fire far more people far more quickly, with
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`the resulting negative impact on customer satisfaction.” He “repeatedly advised [Defendant Chief
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`Executive Officer J. Michael Lawrie (“Lawrie”)] about his reservations concerning the pace of cuts.”
`14.
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`The Hilton Complaint also attaches an internal letter written by Defendant Lawrie
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`himself on May 15, 2018. In this letter, Lawrie says that Hilton had failed to achieve the required
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`cost-cuts and imperiled DXC relationships, and accuses Hilton of “material misconduct” and a
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`“substantial and willful failure to render services.”
`15.
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`Defendants concealed these shocking developments from the public. To the contrary,
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`less than ten days after writing his alarming letter to Hilton, Lawrie spoke to investors on the
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`Company’s earnings call for the conclusion of its first fiscal year and disclosed not a hint of the
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`failures he claimed were occurring in Hilton’s division. To the contrary, he bragged that the
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`Exchange Act Defendants had “really successfully completed the overall year 1 integration road
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`Case 5:20-cv-02185-VKD Document 1 Filed 03/31/20 Page 10 of 92
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`map,” had “track[ed] a bit ahead of plan on revenue,” and “profit was . . . better than expected as
`we were able to accelerate many of the cost takeout synergies[.]” Indeed, as for Hilton’s division,
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`Lawrie told investors that “our delivery teams continued to drive increased productivity while
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`improving service levels for our clients.”
`16.
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`These public statements cannot be squared with Defendant Lawrie’s internal letter to
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`Hilton. Nor can they be squared with information obtained from multiple former employees whose
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`statements and accounts are set forth in the CAC filed in the In re DXC Class Action. As described
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`in more detail below, some of these former employees note that throughout the Relevant Period,
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`“Global Delivery” was on “pins and needles” because they simply did not have enough skilled
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`employees to execute on their customer contracts. As experienced and essential employees were
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`forced out, the problem only worsened and clients expressed enormous frustration with the
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`Company. According to the CAC, numerous former employees noted that Lawrie knew (but did not
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`care) that his workforce reductions “could not be achieved at the pace required by his internal budget”
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`and the Company was struggling to keep customers satisfied and marshal the resources to generate
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`revenue from new contracts.
`17.
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`On October 24, 2018, the truth began to emerge when The Register published another
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`article reporting that DXC had fired a senior executive named Karan Puri (“Puri”). Puri had been
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`hired just months before, with Lawrie describing him as a “top-notch senior IT services business
`leader.” The article quoted insiders at DXC who stated that the Company was “descending into
`turmoil” and that in early October Lawrie had called a “town hall” meeting where he announced
`additional firings and blamed Puri for a “10-15 percent shortfall in [forecast] revenues.” This news
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`caused DXC’s stock price to decline by more than 16%, from $87.56 per share to $73.25 per share.
`18.
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`The Company responded by filing a Form 8-K “in response to today’s movement in
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`the stock of DXC” that reiterated the Company’s previous EPS guidance. On November 6, 2018,
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`DXC filed another Form 8-K, which reported the Company’s second quarter fiscal year 2019
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`earnings. This Form 8-K disclosed that the Company had in fact—as Defendant Lawrie had been
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`warned internally—suffered a disastrous 8% decline in year-over-year revenue, with a revenue
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`shortfall of more than $440 million. As a result, DXC’s stock price dropped over 12%, from $72.21
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`per share to $63.21 per share, on extremely high trading volume.
`19.
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`The October and November 2018 revelations rocked the investment community and
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`caused material declines in DXC’s share price, but unbeknownst to Plaintiff and other investors, the
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`full extent of the devastation had yet to be revealed, and therefore the artificial inflation had yet to
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`be fully removed from DXC’s share price. The true extent of the Company’s shortfall was revealed
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`on August 8, 2019, after the market closed, when the Company lowered its fiscal 2020 guidance,
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`expecting revenue between $20.2 billion and $20.7 billion, representing a $500 million shortfall from
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`the already disappointing previously-issued guidance. On this news, the Company’s share price fell
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`$15.74, or over 30%, to close at $35.91 per share on August 9, 2019, on unusually heavy trading
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`volume.
`II.
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`JURISDICTION AND VENUE
`20.
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`The claims asserted herein arise under Sections 11 and 15 of the Securities Act, 15
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`U.S.C. §§ 77k and 77o, and Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j(b) and
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`78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5.
`21.
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`This Court has jurisdiction over the subject matter of this action pursuant to Section
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`22 of the Securities Act, 15 U.S.C. § 77v, Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28
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`U.S.C. §§ 1331 and 1337.
`22.
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`Venue is also proper in this District under Section 22 of the Securities Act, 15 U.S.C.
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`§ 77v(a) and Section 27 of the Exchange Act, 15 U.S.C. § 78aa(a), which provide that any suit under
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`the Securities Act and Exchange Act, respectively, may be brought “in the district wherein the
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`defendant is found or is an inhabitant or transacts business[.]” Many of the violations of law alleged
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`herein occurred in this District, including the dissemination of the material misrepresentations and
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`omissions complained of herein and the sale of DXC shares by Defendants into this District.
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`Additionally, each of the Defendants also has sufficient contacts with this District, or otherwise
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`purposefully availed himself or itself of benefits of this District, so as to render the exercise of
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`jurisdiction over each by this District consistent with traditional notions of fair play and substantial
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`justice. For instance, Defendants HPE and Jeremy K. Cox are located or reside in this District, and
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`many of the witnesses and documents relevant to this litigation can be found in this District.
`23.
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`In connection with the acts alleged in this Complaint, Defendants, directly or
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`indirectly, used the means and instrumentalities of interstate commerce, including the mails,
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`interstate telephone communications, and the facilities of the national securities markets.
`III.
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`Plaintiffs
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`PARTIES
`A.
`24.
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`Plaintiff Kingstown Partners Master Ltd. is a Cayman Islands exempted company. It
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`is managed and advised by Kingstown Capital Management, L.P. (“Kingstown Capital”).
`25.
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`Plaintiffs Kingstown Partners II, LP; Ktown, LP; and Kingfishers, LP are Delaware
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`Limited Partnerships. They are managed and advised by Kingstown Capital. Collectively, the
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`individual plaintiffs are referred to as “Plaintiffs”.
`26.
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`Plaintiffs acquired DXC shares at artificially inflated prices during the Relevant
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`Period, including (a) former HPE shares that were converted to DXC shares in the Merger, (b) DXC
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`shares that were issued in exchange for CSC shares pursuant to the Registration Statement, and (c)
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`DXC shares that were purchased post-Merger on the NYSE.
`B.
`27.
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`Defendants
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`DXC is an information technology company that services private and public-sector
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`enterprises and is incorporated in the state of Nevada. Headquartered in Tysons, Virginia, the
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`Company maintains offices around the world, including offices in Northern California. DXC’s
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`common stock trades on the New York Stock Exchange (“NYSE”) under the ticker symbol “DXC.”
`28.
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`HPE is an information technology company based in Northern California. Before the
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`Merger, HPE was the sole controlling shareholder of DXC. After the Merger, HPE shareholders held
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`a controlling majority (approximately 50.1%) of the outstanding common shares of DXC. HPE
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`exercised its control over DXC and the Merger by designating HPE employee representatives as
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`officers and directors of DXC who, within the scope of their employment with HPE, reviewed,
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`contributed to, signed, or agreed to be named as incoming officer and director designees in the
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`Registration Statement.
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`29.
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`Rishi Varma (“Varma”) was an employee and General Counsel of HPE at the time of
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`the Merger. In his capacity as an employee representative of HPE, he served as President, Secretary,
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`Principal Executive Officer, and a director of DXC until the Merger’s completion, at which time he
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`was replaced by J. Michael Lawrie. Varma signed the Registration Statement.
`30.
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`Timothy C. Stonesifer (“Stonesifer”) was the Chief Financial Officer (“CFO”) of
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`HPE at the time of the Merger. In his capacity as an employee representative of HPE, he served as
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`CFO and a director of DXC until the Merger’s completion, at which time he was replaced as CFO
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`by Paul N. Saleh. Stonesifer signed the Registration Statement.
`31.
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`Jeremy K. Cox served as a director of DXC until the Merger’s completion and signed
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`the Registration Statement.
`32. Mukesh Aghi is named in the Registration Statement as an incoming DXC director.
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`He reviewed and contributed to the Registration Statement.
`33.
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`Amy E. Alving is named in the Registration Statement as an incoming DXC director.
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`She reviewed and contributed to the Registration Statement.
`34.
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`David Herzog is named in the Registration Statement as an incoming DXC director.
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`He reviewed and contributed to the Registration Statement.
`35.
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`Sachin Lawande is named in the Registration Statement as an incoming DXC director.
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`He reviewed and contributed to the Registration Statement.
`36.
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`J. Michael Lawrie is named in the Registration Statement as the incoming Chairman
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`of the DXC Board, as well as the incoming President and Chief Executive Officer (“CEO”) of DXC.
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`He is the former President and CEO of CSC. DXC announced Lawrie’s retirement as CEO of the
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`Company in September 2019. He reviewed and contributed to