Why Did Three Former Twitter Executives Sue the Company? Explaining What Led to the Incident

VERIFIED COMPLAINT FOR ADVANCEMENT

Plaintiffs Parag Agrawal, Vijaya Gadde, and Ned Segal( Plaintiffs), by and through their undersigned attorneys, upon knowledge as to themselves and their own actions and upon information and belief as to all other matters, allege as follows:

NATURE OF THE ACTION

1. This is an action to enforce Plaintiffs rights to advancement of expenses pursuant to (i)the Bylaws of Twitter, Inc. (“Defendant, Twitter, or the Company ), dated as of February 14, 2022 (the Bylaws ) and (ii)the various Director & Officer Indemnification Agreements[1] entered into by the Company and each Plaintiff. A true and correct copy of the Bylaws is attached hereto as Exhibit A. A true and correct copy of the Agrawal Agreement is attached hereto as Exhibit B [2] true and correct copy of the Gadde Agreement is attached hereto as Exhibit C. A true and correct copy of the Segal Agreement is attached hereto as Exhibit D.

2. Plaintiff Agrawal is the former Chief Executive Officer (“CEO”) of Twitter and a former member of the Company's Board of Directors.

   
   

3. Plaintiff Gadde is the former Chief Legal Officer (“CLO”) of Twitter.

   
   

4. Plaintiff Segal is the former Chief Financial Officer (“CFO”) of Twitter.

5. Plaintiffs have incurred significant expenses, including but not limited to attorneys fees and costs, in connection with several proceedings in which Plaintiffs are involved by virtue of their former roles as officers of Twitter, and Plaintiffs accordingly are entitled to advancement of those fees and costs.

6. First, Agrawal, Gadde, and Segal are defendants in a putative class action securities lawsuit captioned Baker v. Twitter, Inc., et al., No. 2:22-cv-06525 (MCS)(C.D. Cal.)(the Securities Class Action ).

Agrawal, Gadde, and Segal retained counsel and have defended themselves in the Securities Class Action, in which they were named by reason of their prior services as officers of the Company Agrawal, Gadde, and Segal consequently have incurred Expenses, including attorneys fees, as defined in the Agreements, requiring advancement pursuant to the Bylaws and Agreements.

7. Second, while still working as officers of Twitter, Agrawal and Segal were contacted by federal authorities in connection with certain inquiries related to the Company (the SEC and DOJ Inquiries). Agrawal and Segal retained counsel, provided testimony to the SEC in 2022, and their counsel have continued to engage with federal authorities.

Additionally, Agrawal received requests before and after he left Twitter to take measures to preserve certain documents, which likewise relate to his prior service as an officer of Twitter. Agrawal and Segal consequently have incurred Expenses, including attorneys fees, requiring advancement pursuant to the Bylaws and Agreements.

8. Third, Gadde is a defendant, alongside the Company, in a lawsuit captioned D' Ambly v. Exoo, et al., No. 2:20-cv-12880 (JMV) (D.N.J.) (the D' Ambly Lawsuit ). Gadde retained counsel and has defended herself in the D'Ambly Lawsuit, in which she was named by reason of her prior service as an officer of Twitter. Gadde consequently has incurred Expenses, including attorneys fees, requiring advancement pursuant to the Bylaws and Agreements.

9. Fourth Gadde received a subpoena from the House Committee on Oversight and Accountability of the 118th Congress to testify at a public hearing before Congress (the “Oversight Inquiry” ). Gadde retained counsel and testified publicly in connection with the Oversight Inquiry, which relates to Gadde's prior service as an officer of Twitter. Gadde consequently has incurred Expenses, including attorneys fees, requiring advancement pursuant to the Bylaws and Agreements.

10. The above-mentioned lawsuits and inquiries in Paragraphs 6 through 9 are collectively referred to as the “Proceedings.”

11. As detailed more fully herein, the Bylaws and the agreements obligate the Company to indemnify Plaintiffs and advance all Expenses incurred in connection with any Proceeding in which Plaintiffs are involved by reason of their Corporate Status.

12. Despite timely written demand along with documentation from Plaintiffs through their counsel, the Company has not advanced to Plaintiffs their Expenses actually and reasonably incurred related to the various Proceedings. Over two months after Plaintiffs’ initial written demand, the Company offered only a cursory acknowledgement of receipt, but still refused to acknowledge its obligations and to remit payment of any invoices. Defendant has breached the Agreements and contravened its Bylaws.

13. Plaintiffs seek an order (i) requiring the Company to advance all Expenses that Plaintiffs have incurred in connection with the Proceeding; (ii) requiring the Company to advance all Expenses incurred by Plaintiffs in connection with enforcing their rights to advancement pursuant to the Bylaws and Agreements; and (iii) declaring that Plaintiffs are entitled to advancement of any future attorney’s fees, costs, and expenses incurred in connection with the Proceedings.

[1] Mr. Agrawal entered into a Director & Officer Indemnification Agreement with the Company on or about November 29, 2021 (“Agrawal Agreement“); Ms. Gadde entered into a Director & Officer Indemnification Agreement with the Company on or about October 1, 2013 (“Gadde Agreement“); and Mr. Segal entered into a Director & Officer Indemnification Agreement with the Company on or about August 25, 2017 (“Segal Agreement“) (collectively, the “Agreements“). Capitalized terms not defined herein shall have the definitions set forth in the Agreements.

[2] The copy of Agrawal Agreement in Plaintiffs’ possession is unsigned by the Company, Agrawal previously has requested from the Company all instruments signed by him relating to his employment, but the Company has yet respond. Upon information and belief, the Company is in possession of a fully-executed copy of the agreement identical in substance to the copy appenede hereto.