Pension Trust Fund For Operating Engineers v. DeVry Education Group, Inc. et al

Northern District of Illinois, ilnd-1:2016-cv-05198

Exhibit C

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Case: 1:16-cv-05198 Document #: 93-3 Filed: 03/30/18 Page 1 of 6 PageID #:1591 EXHIBIT C Case: 1:16-cv-05198 Document #: 93-3 Filed: 03/30/18 Page 2 of 6 PageID #:1592 Section 1: 10-K Section 1: 10-K (FORM (FORM 10-K) 10-K) UNITED STATES UNITED STATES SECURITIES SECURITIES AND AND EXCHANGE EXCHANGE COMMISSION COMMISSION Washington, D.C. 20549 Washington, D.C. 20549 Form 10-K Form 10-K (Mark One) (Mark One) R R ANNUAL REPORT ANNUAL REPORT PURSUANT PURSUANT TO TO SECTION SECTION 13 13 OR OR 15(d) 15(d) OF THE OF SECURITIES EXCHANGE THE SECURITIES EXCHANGE ACT ACT OF OF 1934 1934 For the For the fiscal year ended: fiscal year June 30, ended: June 30, 2013 2013 OR OR ¨ ❑ TRANSITION REPORT PURSUANT TRANSITION REPORT PURSUANT TO TO SECTION SECTION 13 13 OR OR 15(d) 15(d) OF THE OF SECURITIES EXCHANGE THE SECURITIES EXCHANGE ACT ACT OF OF 1934 1934 For the For the transition transition period period from from to to Commission file Commission file number: 1-13988 number: 1-13988 DeVry Inc. DeVry Inc. (Exact name (Exact name of registrant as of registrant as specified specified in its charter) in its charter) DELAWARE DELAWARE 36-3150143 36-3150143 (State or (State or other jurisdiction of other jurisdiction of (I.R.S. Employer (I.R.S. Employer incorporation or incorporation or organization) organization) Identification No.) Identification No.) 3005 HIGHLAND 3005 HIGHLAND PARKWAY PARKWAY 60515 60515 DOWNERS GROVE, DOWNERS ILLINOIS GROVE, ILLINOIS (Zip Code) (Zip Code) (Address of principal executive (Address ofprincipal executive offices) offices) Registrant's telephone Registrant's telephone number; including area number; including area code: code: (630) 515-7700 (630) 515-7700 Securities Securities registered registered pursuant to section pursuant to section 12(b) 12(b) of of the the Act: Act: Title Title of Each Class of Each Class Name of Name Each Exchange of Each Exchange on on Which Registered: Which Registered: Common Stock Common $0.01 Par Stock $0.01 Par Value Value NYSE, CSE NYSE, CSE Common Stock Common Purchase Rights Stock Purchase Rights NYSE NYSE Securities Securities registered pursuant to registered pursuant to Section 12(g) of Section 12(g) of the the Act: Act: None None Indicate by Indicate by check check mark mark if if the the Registrant Registrant is is aa well-known well-known seasoned seasoned issuer, issuer, as as defined in Rule defined in Rule 405 405 of of the the Securities Act. Yes Securities Act. Yes R R No ££ No Indicate by Indicate by check mark if check mark if the the Registrant Registrant is not required is not to file required to file reports pursuant to reports pursuant to Section 13 or Section 13 or Section 15(d) of Section 15(d) of the the Act. Act. Yes Yes ££ No R No R Indicate by Indicate by check mark whether check mark whether the the Registrant Registrant (1) (1) has has filed filed all all reports reports required required to to be be filed filed by by Section Section 13 or 15(d) 13 or 15(d) of of the the Securities Securities Exchange Exchange Act Act of of 1934 during 1934 during the the preceding preceding 12 12 months months (or (or for such shorter for such shorter period period that that the the registrant registrant was was required required to to file such reports) file such reports),, and and (2) (2) has been subject has been subject to to such filing such filing requirements for the requirements for the past past 90 90 days. days. Yes Yes RR NoNo ££ Indicate by Indicate by check mark whether check mark whether the the registrant registrant has has submitted submitted electronically electronically and and posted posted on on its its corporate corporate Web Web site, site, if if any, any, every every Interactive Interactive Data Data File required File required to to be be submitted submitted and and posted posted pursuant pursuant to to Rule Rule 405 405 of Regulation S-T of Regulation S-T (§(§ 232.405 232.405 of of this this chapter) chapter) during the preceding during the preceding 12 12 months months (or (or for for such shorter such shorter period period that that the the registrant registrant was was required required to to submit submit and and post post such such files). Yes R files). Yes R NoNo ££ Indicate by Indicate by check mark if check mark disclosure of if disclosure of delinquent delinquent filers pursuant to filers pursuant to Item Item 405 405 of Regulation S-K of Regulation is not S-K is not contained contained herein, herein, and and will will not not be be contained, contained, to the to the best best of of registrant's registrant's knowledge, knowledge, inin definitive definitive proxy proxy oror information statements incorporated information statements by reference incorporated by reference in Part III in Part III of this Form of this Form 10-K 10-K or any or any amendment to amendment Case: to this this 1:16-cv-05198 Form 10-K. Form 10-K. ££ Document #: 93-3 Filed: 03/30/18 Page 3 of 6 PageID #:1593 Indicate by Indicate by check mark whether check mark whether the the registrant registrant is is aa large large accelerated accelerated filer, filer, an an accelerated accelerated filer, filer, aa non-accelerated non-accelerated filer, filer, or or aa smaller smaller reporting reporting company. company. See the definitions See the of "large definitions of "large accelerated accelerated filer," filer," "accelerated "accelerated filer" and "smaller filer" and "smaller reporting reporting company" company" in Rule 12b-2 in Rule 12b-2 of of the the Exchange Exchange Act. Act. Large accelerated Large accelerated filer filer R R Accelerated filer Accelerated filer ££ Non-accelerated filer Non-accelerated filer ££ (Do (Do not not check check if if aa smaller smaller reporting reporting company) company) Smaller Smaller reporting company reporting company ££ Indicate by Indicate by check check mark mark whether whether the the registrant registrant is is aa shell shell company (as defined company (as defined in Rule 12b-2 in Rule 12b-2 of of the the Exchange Exchange Act). Act). Yes Yes ££ No R No R State the aggregate State the aggregate market market value value of the voting of the voting and and non-voting non-voting common common equity held by equity held by nonaffiliates nonaffiliates computed computed byby reference reference to to the the price price at at which which the common the equity was common equity was last sold, or last sold, or the the average average bid bid and and asked asked price price of such common of such common equity, as of equity, as of the the last business day last business day of the Registrant's of the Registrant's most most recently recently completed second fiscal completed second fiscal quarter. quarter. Shares of common Shares of stock held common stock held directly directly or or controlled controlled by by each each director and executive director and officer have executive officer been have been excluded. excluded. December 31, December 31, 2012 2012 -- $1,473,932,212 $1,473,932,212 Indicate the Indicate the number number of of shares shares outstanding outstanding of of each each of of the the registrant's registrant's classes classes of of common common stock, stock, as as of of the the latest practicable date. latest practicable date. August 20, August 20, 2013 2013 — — 62,978,000 62,978,000 shares shares of Common Stock, of Common Stock, $0.01 par value $0.01 par value DOCUMENTS INCORPORATED DOCUMENTS INCORPORATED BY BY REFERENCE REFERENCE Certain portions of Certain portions of the the Registrant's Registrant's definitive definitive Proxy Proxy Statement Statement for the Annual for the Annual Meeting Meeting of of Stockholders to be Stockholders to be held held on November 6, on November 6, 2013, 2013, are are incorporated into Part incorporated into Part III III of of this this Form Form 10-K 10-K to to the the extent stated herein. extent stated herein. Case: 1:16-cv-05198 Document #: 93-3 Filed: 03/30/18 Page 4 of 6 PageID #:1594 DeVry Inc. DeVry Inc. ANNUAL REPORT ANNUAL REPORT ON FORM 10-K ON FORM 10-K FISCAL YEAR FISCAL YEAR ENDED ENDED JUNE JUNE 30, 30, 2013 2013 TABLE OF TABLE OF CONTENTS CONTENTS Page Page # # PART II PART Item 11 Item — — Business Business 33 Item 1A Item lA — — Risk Factors Risk Factors 35 35 Item 1B Item 1B — — Unresolved Staff Unresolved Comments Staff Comments 43 43 Item 22 Item — — Properties Properties 44 44 Item 33 Item — — Legal Proceedings Legal Proceedings 46 46 Item 44 Item — — Mine Safety Mine Safety Disclosures Disclosures 47 47 — — Supplementary Item-Executive Officers Supplementary Item-Executive Officers of the Registrant of the Registrant 47 47 PART II PART II Item 55 Item — — Market for Market Registrant's Common for Registrant's Common Equity, Equity, Related Related Stockholder Matters and Stockholder Matters and Issuer Issuer Purchases Purchases of Equity Securities of Equity Securities 48 48 Item 66 Item — — Selected Financial Data Selected Financial Data 51 51 Item 77 Item — — Management's Discussion Management's Discussion and and Analysis Analysis of of Financial Financial Condition Condition and and Results Results of of Operations Operations 51 51 Item 7A Item 7A — — Quantitative and Qualitative Quantitative and Qualitative Disclosures Disclosures about about Market Market Risk Risk 79 79 Item 88 Item — — Financial Statements Financial and Supplementary Statements and Data Supplementary Data 80 80 Item 99 Item — — Changes Changes in and Disagreements in and Disagreements with with Accountants Accountants on Accounting and on Accounting and Financial Financial Disclosure Disclosure 80 80 Item 9A Item 9A — — Controls and Procedures Controls and Procedures 81 81 Item 9B Item 9B — — Other Information Other Information 81 81 PART III PART III Item 10 Item 10 — — Directors, Executive Directors, Executive Officers and Corporate Officers and Corporate Governance Governance 122 122 Item 11 Item 11 — — Executive Compensation Executive Compensation 122 122 Item 12 Item 12 — — Security Ownership of Security Ownership of Certain Beneficial Owners Certain Beneficial Owners and and Management Management and and Related Related Stockholder Matters Stockholder Matters 122 122 Item 13 Item 13 — — Certain Relationships and Certain Relationships and Related Related Transactions, and Director Transactions, and Director Independence Independence 122 122 Item 14 Item 14 — — Principal Accountant Principal Accountant Fees Fees and and Services Services 122 122 PART IV PART IV Item 15 Item 15 — — Exhibits and Exhibits and Financial Financial Statement Statement Schedules Schedules 123 123 — — Financial Statements Financial Statements 123 123 — — Financial Statement Financial Statement Schedules Schedules 123 123 — — Exhibits Exhibits 123 123 SIGNATURES SIGNATURES 126 126 Case: 1:16-cv-05198 Document #: 93-3 Filed: 03/30/18 Page 5 of 6 PageID #:1595 Under the Under the Federal Federal Perkins Perkins loan program, the loan program, the institution institution is is responsible responsible for collecting outstanding for collecting outstanding loans. Any institution loans. Any with aa Perkins institution with Perkins loan cohort loan cohort default rate exceeding default rate 15% must exceeding 15% must establish establish aa default reduction plan. default reduction plan. DeVry DeVry hashas worked worked toto reduce the default reduce the default rates rates for all loan for all programs by loan programs by implementing implementing financial financial literacy and student literacy and student counseling counseling programs programs and and retaining retaining outside outside loan servicing agencies loan servicing agencies to to contact contact former students and former students and inform them of inform them their repayment of their repayment options. options. CAREER SERVICES CAREER SERVICES DeVry University DeVry University As The As The Career Career University, University, DeVry DeVry University University believes believes that that the the employment employment of of its its graduates graduates is is essential to the essential to the achievement achievement of of its mission and its mission and the the ability to ability to attract attract and and retain retain students. students. Career Career services services professionals professionals located at DeVry located at DeVry University University undergraduate undergraduate campuses campuses work work with with students students to to choose careers, craft choose careers, resumes, and craft resumes, and prepare prepare for for job job interviews. interviews. The staff also The staff also maintains maintains contact with local contact with local and and national national employers to proactively employers to proactively identify job opportunities identify job opportunities andand arrange arrange interviews. interviews. InIn many many cases, cases, company company hiring representatives conduct hiring representatives interviews at conduct interviews at DeVry DeVry University University campuses. campuses. DeVry University DeVry University attempts attempts to to gather gather accurate accurate data to determine data to how many determine how many of of its undergraduates, both its undergraduates, both at at the the associate associate and and bachelor's bachelor's degree degree levels, are employed levels, are employed in positions related in positions related to to their their program program of of study study within within six six months months following following graduation. graduation. To To aa large large extent, the reliability extent, the reliability of of such such data depends on data depends the quality on the quality of of information that graduates information that graduates self-report. self-report. One measure One measure ofof success success is the employment is the employment outcomes outcomes ofof DeVry DeVry University University graduates. Each year, graduates. Each year, thousands thousands ofof DeVry DeVry University University graduates graduates have have started careers started careers in their chosen in their chosen fields within 66 months fields within months oror less less of of their their graduation. Ninety percent graduation. Ninety percent ofof DeVry DeVry University's University's calendar calendar 2012 2012 graduates in graduates in the active the active job job market market were were employed employed in their fields in their fields of of study study within within six six months months of of graduation graduation at at an an average average salary salary of of $43,539. $43,539. These statistics include These statistics include graduates of associate graduates of associate and and bachelor's bachelor's degree programs and degree programs and those those who who were were already already employed employed in their field in their of study. field of study. For the For the last ten years, last ten years, DeVry DeVry University University graduates graduates have have obtained obtained employment employment atat over over 95 of the 95 of the Fortune Fortune 100 100 companies. DeVry University companies. DeVry University works works with many with many Fortune Fortune 100 100 companies to design companies to programs that design programs that provide provide real-world real-world knowledge. knowledge. Historically, DeVry Historically, DeVry University University has has provided provided students students access access to to aa national national job job database, database, which which allows allows students students to to log into one log into one site site to to view, view, apply apply for, and learn for, and more about learn more about job job opportunities appropriate to opportunities appropriate to their their experience and education experience and education level. level. Over Over the the coming coming year year DeVry DeVry University University will will expand expand the capabilities the capabilities of of this this system system into into aa more more comprehensive student portal comprehensive student portal for for career planning and career planning and management. management. This new system This new system will will include include aa self- self- assessment application, assessment application, networking networking tools, tools, video video tutorials, tutorials, resume resume writing writing software, software, links links to to resources, and feeds resources, and for events feeds for events and and job job leads leads relevant to relevant to their degree their program. In degree program. In addition, addition, management management has recently reconfigured has recently reconfigured the the national national job job database to allow database to allow employers employers toto access access the the system system directly directly and post and post job job leads leads on their own. on their own. This This functionality will be functionality will be rolled rolled out out to to our our employer partners over employer partners the coming over the year. coming year. Chamberlain Chamberlain College of Nursing College of Nursing Career services professionals Career services professionals work work with with Chamberlain Chamberlain students students to to develop develop resumes, resumes, prepare prepare for for job job interviews, interviews, and and target target employment employment opportunities. opportunities. The staff also The staff also maintains maintains contact with local contact with and national local and national employers employers toto proactively proactively identify identify employment employment opportunities and arrange opportunities and arrange interviews. In addition, interviews. In addition, Chamberlain Chamberlain career services personnel career services personnel gather gather data data regarding regarding employment employment and and compensation compensation as as well well as as alumni alumni perception perception of of educational preparation for educational preparation the workplace. for the workplace. Carrington Carrington Carrington provides career Carrington provides career service service support support to to students students through through dedicated dedicated colleagues colleagues at at each each campus location. The campus location. range of The range of services services provided provided includes: assistance in includes: assistance in preparing preparing resumes, resumes, coaching coaching toto define define aa job job search search strategy, strategy, coaching coaching to to improve improve interviewing skills, employer interviewing skills, outreach employer outreach initiatives to identify initiatives to job opportunities, identify job access to opportunities, access to posted posted online online job job opportunities opportunities and and guidance guidance toto help help graduates graduates obtain obtain employment employment in their field in their field of study. of study. DeVry Brasil DeVry Brasil In all In all DeVry DeVry Brasil Brasil institutions, institutions, career services are career services are administered administered by by the the Student Student Support Center, aa department Support Center, department named named "CASA", "CASA", aa Portuguese Portuguese acronym for acronym student support. for student support. This service assists This service assists students students in in developing developing resumes resumés and and preparing preparing them them for for job job interviews. interviews. Career Career services services covers covers students beginning students beginning in their first in their first semester semester and and continuing continuing post-graduation post-graduation providing providing assistance assistance on on career planning. Career career planning. Career services services also also works works with with local employers in local employers in identifying identifying employment employment andand internship opportunities. These internship opportunities. activities are These activities are included included in the Student in the Professional Development Student Professional Development Program ("PDPE"). Program ("PDPE"). Also Also asas part part of of this this program, program, students students prepare prepare an an individual career plan individual career plan together together with with aa coach. These plans coach. These plans are are updated updated every every six six to twelve to twelve months. months. To measure student To measure student success success after after graduation, graduation, aa survey survey is is conducted conducted every 6 months. every 6 months. This survey gathers This survey gathers information of employment information of employment rates rates and and compensation. The most compensation. The most recent survey was recent survey was administered administered in January 2013 in January 2013 and and showed showed that that 72.4% of graduates 72.4% of were employed graduates were with an employed with an average average monthly net monthly net salary salary of of R$ 2,314 (approximately R$ 2,314 (approximately US$14,000 US$14,000 per per year). year). 32 32 Case: 1:16-cv-05198 Document #: 93-3 Filed: 03/30/18 Page 6 of 6 PageID #:1596 ITEM 33 — ITEM – LEGAL LEGAL PROCEEDINGS PROCEEDINGS DeVry is DeVry subject to is subject to lawsuits, administrative proceedings, lawsuits, administrative proceedings, regulatory reviews and regulatory reviews and investigations associated with investigations associated with financial financial assistance assistance programs programs and other and other matters matters arising arising in in the the normal normal conduct conduct ofof its its business. business. The The following is aa description following is description of of pending pending litigation that may litigation that may be be considered considered other other than ordinary than ordinary and and routine routine litigation that is litigation that is incidental to the incidental to the business. business. The Boca Raton The Boca Raton Firefighters' Firefighters' and and Police Police Pension Pension Fund Fund filed an initial filed an complaint (the initial complaint (the "Shareholder "Shareholder Case") Case") in the United in the United States District Court States District Court for for the Northern the Northern District District of of Illinois Illinois on on November November 1, 1, 2010 2010 (Case (Case No. No. 1:10-cv-07031). 1:10-cv-07031). The The initial initial complaint complaint waswas filed filed on on behalf behalf of of aa putative putative class class of of persons who persons who purchased purchased DeVry DeVry common common stock stock between between October October 25, 25, 2007, 2007, and and August August 13,13, 2010. 2010. Plaintiff Plaintiff filed an amended filed an amended complaint complaint (the(the "First "First Amended Complaint") Amended Complaint") on on March March 7, 2011 alleging 7, 2011 alleging the the same same categories of claims categories of claims in the initial in the initial complaint. complaint. The plaintiff claimed The plaintiff claimed in the First in the First Amended Amended Complaint that Complaint that DeVry, DeVry, Daniel Daniel Hamburger Hamburger and and Richard Richard M.M. Gunst Gunst violated violated Sections 10(b) and Sections 10(b) and 20(a) 20(a) ofof the the Securities Exchange Act Securities Exchange Act ofof 1934 1934 and and Rule Rule 10b-5 promulgated thereunder 10b-5 promulgated thereunder by by failing to disclose failing to abusive and disclose abusive and fraudulent fraudulent recruiting recruiting andand financial aid lending financial aid lending practices, practices, thereby thereby increasing increasing DeVry's student DeVry's student enrollment enrollment andand revenues revenues and and artificially artificially inflating inflating DeVry's DeVry's stock stock price price during during thethe class class period. period. On March 27, On March 27, 2012, 2012, Judge Judge John John F. F. Grady Grady dismissed the First dismissed the First Amended Amended Complaint Complaint without without prejudice, prejudice, granting granting plaintiff plaintiff leave to file leave to file aa second second amended amended complaint by May complaint by May 4, 4, 2012. 2012. On May 4, On May 4, 2012, 2012, the the plaintiff plaintiff again again amended amended its allegations in its allegations in the the Shareholder Case (the Shareholder Case (the "Second "Second Amended Amended Complaint"). Complaint"). The The Second Amended Second Amended Complaint alleged Complaint alleged aa longer putative class longer putative class period period of of October October 27, 27, 2007 2007 to to August August 11, 11, 2011, 2011, but but narrowed narrowed the the scope scope of the alleged of the alleged fraud significantly as fraud significantly as compared compared toto the the previous previous two two complaints. complaints. Plaintiff Plaintiff focused exclusively on focused exclusively on DeVry's DeVry's practices practices for for compensating compensating student student Admissions Admissions Advisors, Advisors, alleging DeVry alleging DeVry misled misled the the market market by by failing to disclose failing to disclose that that its compensation practices its compensation practices violated violated federal federal law and by law and by making making affirmative affirmative misrepresentations that misrepresentations that DeVry DeVry complied with compensation complied with regulations. The compensation regulations. The Second Amended Complaint Second Amended Complaint was was subsequently subsequently corrected corrected to to add add an an additional plaintiff, additional plaintiff, West West Palm Palm Beach Beach Firefighters' Firefighters' Pension Pension Fund, Fund, inin response to DeVry's response to DeVry's challenge challenge ofof plaintiff's plaintiff's standing standing toto complain complain about about statements DeVry statements DeVry made made after after plaintiff plaintiff had purchased its had purchased stock. its stock. On July 10, On July 10, 2012, 2012, DeVry DeVry filed filed aa Motion Motion to to Dismiss Dismiss the the corrected corrected Second Amended Complaint. Second Amended Complaint. OnOn March March 27, 27, 2013, 2013, Judge Judge Grady Grady granted DeVry's granted DeVry's Motion to Motion to Dismiss Dismiss andand entered judgment in entered judgment in favor of DeVry favor of DeVry and and against against plaintiffs. plaintiffs. Judge Judge Grady Grady thereby thereby dismissed dismissed the the case with prejudice; case with prejudice; however, however, he reserved he jurisdiction to reserved jurisdiction to examine examine thethe question question of whether sanctions of whether sanctions should should be be imposed against plaintiffs imposed against plaintiffs and/or and/or their their counsel. counsel. On On April April 26, 26, 2013, 2013, the plaintiffs the plaintiffs filed filed aa notice of appeal notice of appeal ofof Judge Judge Grady's Grady's order of dismissal; order of dismissal; however, the appeal however, the appeal has has been been stayed stayed pending pending Judge Judge Grady's Grady's resolution resolution of of the sanctions the sanctions issue. issue. The The issue issue of sanctions was of sanctions was fully fully briefed briefed by by the the parties parties as as of of May May 17, 17, 2013, 2013, and and is is under under consideration by Judge consideration by Judge Grady. Grady. Three shareholder derivative Three shareholder derivative cases cases similar similar to to the the Shareholder Shareholder Case Case had had been been filed filed ("Derivative ("Derivative Actions"), Actions"), butbut each has been each has been voluntarily voluntarily dismissed dismissed byby the the plaintiffs plaintiffs who who brought brought them. them. Two Two of the Derivative of the Derivative Actions Actions were were filed filed in the Circuit in the Circuit Court Court ofof Cook Cook County, County, Illinois, Illinois, Chancery Chancery Division: DeVry Division: DeVry shareholder shareholder Timothy Hald filed Timothy Hald filed aa derivative derivative complaint complaint on behalf of on behalf of DeVry DeVry on on January January 3, 3, 2011 2011 (Hald (Hald v. v. Hamburger Hamburger etet al., al., Case Case No. No. 11 11 CH 0087) CH 0087) and and Matthew Matthew Green Green (also (also aa DeVry DeVry shareholder) shareholder) filed filed aa derivative derivative complaint complaint on on behalf behalf of of DeVry DeVry onon January January 7, 2011 (Green 7, 2011 (Green v.v. Hamburger Hamburger et et al., Case al., Case No. No. 11 11 CH CH 0770). 0770). The Hald and The Hald and Green Green cases (the "Illinois cases (the "Illinois Consolidated Consolidated Action") Action") were were consolidated consolidated by by court order dated court order February 9, dated February 2011 9, 2011 but was but was voluntarily voluntarily dismissed without prejudice dismissed without prejudice by by Order Order entered January 15, entered January 15, 2013. 2013. Maria Maria Dotro, Dotro, another another DeVry DeVry shareholder, shareholder, filed filed aa third third derivative derivative complaint complaint onon DeVry's DeVry's behalf behalf in the Delaware in the Delaware Court Court ofof Chancery Chancery on on March March 11, 11, 2011 2011 (Dotro (Dotro v.v. Hamburger Hamburger et et al., Case No. al., Case No. 6263). 6263). In In the the wake wake ofof Judge Judge Grady's award of Grady's award of judgment judgment inin favor favor of DeVry in of DeVry the Shareholder in the Shareholder Case, Case, described described above, above, thethe Dotro Dotro shareholder shareholder case was voluntarily case was dismissed voluntarily dismissed without prejudice without prejudice as as well. well. Although DeVry Although DeVry believes believes that that the the appeal appeal of the remaining of the remaining Shareholder Case is Shareholder Case without merit, is without merit, the the ultimate ultimate outcome outcome ofof pending pending litigation litigation is is difficult difficult to predict. to predict. DeVry DeVry will will vigorously vigorously defend defend any any appellate appellate proceedings proceedings which which may may proceed proceed in the Shareholder in the Shareholder Case. At this Case. At this time, time, DeVry DeVry does does not not expect expect that the that the outcome outcome of of any any such such matter matter or or any any other other pending pending lawsuits lawsuits will will have have aa material material effect effect on on its its cash flows, results cash flows, of operations results of operations or or financial financial position. position. In April In April 2013, 2013, DeVry DeVry received received aa subpoena subpoena from the Office from the Office of the Attorney of the Attorney General General of the State of the State of Illinois and of Illinois and aa Civil Investigative Demand Civil Investigative Demand issued issued by the by the Office Office of of the the Attorney Attorney General General ofof the the Commonwealth Commonwealth of of Massachusetts. Massachusetts. The Illinois subpoena The Illinois subpoena concerns concerns potential potential state state law implications in law implications in the event the violations of event violations of federal federal law took place. law took place. It It was was issued issued pursuant pursuant to to the the Illinois Illinois False False Claims Claims Act Act in in connection with an connection with an investigation concerning investigation concerning whether the whether the compensation compensation practices practices of DeVry and of DeVry and certain certain of of its affiliates are its affiliates are in in compliance compliance with with the the Incentive Incentive Compensation Compensation Ban Ban of of the the Higher Higher Education Act Education Act and and requires DeVry to requires DeVry to provide provide documents documents relating to these relating to these matters matters for for periods periods on on or after January or after January 1,1, 2002. 2002. The The Massachusetts Massachusetts demand was issued demand was issued in connection with in connection with anan investigation investigation into whether DeVry into whether DeVry caused caused false false claims claims and/or and/or false false statements statements toto be be submitted submitted toto the the Commonwealth of Commonwealth of Massachusetts Massachusetts relating to student relating to student loans, loans, guarantees, guarantees, and and grants provided to grants provided to DeVry's DeVry's Massachusetts Massachusetts students students and and requires requires DeVry to DeVry to answer answer interrogatories interrogatories and and to to provide provide documents documents relating relating toto periods periods on or after on or after January January 1, 2007. The 1, 2007. timing or The timing or outcome outcome of of the the investigations, or their investigations, or their possible possible impact impact onon DeVry's DeVry's business, business, financial financial condition condition or results of or results of operations, cannot be operations, cannot be predicted predicted at at this this time. time. 46 46