case 3:08-cv-00920-jap-lhg document 83 filed 12/22/2008...

Case 3:08-cv-00920-JAP-LHG Document 83 Filed 12/22/2008 of 2

DAVIS POLK & WARDWELLAngela T. Bellizzi450 Lexington AvenueNew York, New York 10017(212) 450-4000

Attorneys for Defendant Hitachi,Ltd.

UNITED STATES DISTRICT COURTDISTRICT OF NEW JERSEY

Case No. 3:08-CV-920-JAP-JJH

IN RE OPNEXT, INC. SECURITIESLITIGATION DECLARATION OF ANGELA T.

BELLIZZI

1. I am a partner of the law firm Davis Polk & Wardwell, counsel for Defendant

Hitachi, Ltd.

2. A true and correct copy of the Consolidated Class Action Complaint filed on July

30, 2008 is attached hereto as Exhibit A.

3. A true and correct copy of excerpts from the Opnext, Inc. Prospectus (filed with

the SEC pursuant to Rule 424(b)(4) on February 16, 2007) is attached hereto as Exhibit B.

4. A true and correct copy of excerpts from Opnext, Inc.'s annual report on Form

10-K/A for fiscal year 2008 (filed with the SEC on July 29, 2008) is attached hereto as Exhibit C.

Case 3:08-cv-00920-JAP-LHG Document 83 Filed 12/22/2008 of 2

I declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct.

Dated: December 22, 2008

s/ Angela T. Bellizzi Angela T. BellizziDavis Polk & Wardwell450 Lexington AvenueNew York, NY 10017(212) [email protected]

Case 3:08-cv-00920-JAP-LHG Document 83-2 Filed 12/22/2008 Page 1 of 29

EXHIBIT A

Case 3:08-cv-00920-JAP-LHG Document 83-2 Filed 12/22/2008 Page 2 of 29ase 0 -cv-0 0-J P-JJ Document 32 Filed 07/30/2008 Page 1 of 28

GARDY & NOTIS, LLPJames S. NotisCharles A. Germershausen440 Sylvan Avenue, Suite 110Englewood Cliffs, New Jersey 07632Tel: 201-567-7377Fax:201-567-7337

MILBERG LLPSanford P. DumainLeigh SmithTodd L. KammermanOne Pennsylvania Plaza, 49"' FloorNew York, New York 10119Tel: 212-594-5300Fax: 212-868-1229

Co-Lead Counsel for Lead Plaintiff and the Class

[Additional counsel listed on signature pages]

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF NEW JERSEY

IN RE OPNEXT, INC. SECURITIES No. 08 Civ. 920-JAP-JJHLITIGATION

CONSOLIDATED CLASS ACTION COMPLAINTAND JURY TRIAL DEMAND

1. This is a securities class action brought pursuant to Sections 11, 12(a)(2) and 15

of the Securities Act of 1933 (the "Securities Act") on behalf of a class of all persons who

purchased or otherwise acquired the common stock of defendant Opnext, Inc. ("Opnext" or the

"Company") pursuant or traceable to the Company's February 14, 2007 Initial Public Offering

(the "IPO" or "Offering") during the time period between February 14, 2007, and February 13,

2008, inclusive (the "Class Period").

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JURISDICTION AND VENUE

2. The claims asserted herein arise under and pursuant to Sections 11, 12(a)(2) and

15 of the Securities Act, 15 U.S.C. §§77k, 771 and 77o.

3. This Court has jurisdiction over the subject matter of this action pursuant to

Section 22(a) of the Securities Act, 15 U.S.C. §77v(a), and 28 U.S.C. §1331.

4. Venue is proper in this Judicial District pursuant to Section 22(a) of the Securities

Act, 15 U.S.C. §77v(a), and 28 U.S.C. §1391(b). Many of the acts and transactions alleged

herein, including the preparation and dissemination of materially false and misleading

information, occurred in substantial part in this Judicial District, and the Company maintains its

principal executive office in this Judicial District

5. In connection with the wrongful acts and conduct set forth herein, the Defendants,

directly or indirectly, utilized the means and instrumentalities of interstate commerce, including,

but not limited to, the United States mails, interstate telephone communications and the facilities

of a national securities exchange.

THE PARTIES

Lead Plaintiff

6. Plaintiff New Jersey Building Laborers Pension Fund was appointed Lead

Plaintiff by the Court in an Order dated June 30, 2008 and purchased Opnext common stock

pursuant to or traceable to the Company's IPO as set forth in the Lead Plaintiff Certification

previously filed with the Court, and has been damaged thereby as alleged herein.

Defendant Opnext

7. Defendant Opnext is a Delaware corporation with its principal place of business

located in this District at 1 Christopher Way, Eatontown, New Jersey 07724. Opnext designs,

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manufacturers, and markets optical modules and components that transmit and receive data used

in both telecommunications and data communications markets worldwide and touts itself on its

website and elsewhere as "a global leader in the design and manufacturing of optical modules

and components." Opnext was founded in September 2000 as a subsidiary of Hitachi Ltd.

("Hitachi"), with Hitachi owning approximately 68% of Opnext's total shares before the IPO.

Hitachi sold 6,666,666 shares of Opnext in the IPO, or approximately 18.5% of its total holdings.

After the IPO, Hitachi continued to own approximately 46.5% of Opnext's total shares

outstanding. Opnext common stock is traded on the NASDAQ under the symbol "OPXT."

Defendant Hitachi

8. Defendant Hitachi is a Japanese corporation with its principal corporate

headquarters located at 6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8280, Japan. Hitachi

maintains other corporate offices (including an investor relations department listed in Hitachi

press releases) located at 50 Prospect Avenue, Tarrytown, New York 10591, and has filed with

the SEC an official appointment of a New York-based agent for service of process. Opnext was

a majority owned subsidiary of Hitachi at the time of the IPO and throughout the time of the

preparation of the Registration Statement and Prospectus that became effective on February 14,

2007 for the IPO (collectively, the "Registration Statement"). Hitachi continues to control

Opnext through its 46.5% equity ownership of Opnext common stock and through various

agreements with Opnext. For example, the intellectual property rights used in Opnext products

are owned by Hitachi, with Opnext as the licensee. Consistent with Opnext's formation as a

subsidiary of Hitachi, Hitachi also provides the Company with procurement, inventory

management and fulfillment services, information technology services, support services in

connection with the identification of patentable inventions, and even payroll services. Hitachi

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also appoints one-half of Opnext's board of directors. Hitachi American Depository Receipts or

"ADRs" are traded on the New York Stock Exchange under the symbol "HIT."

The Individual Defendants

9. Defendant Harry L. Bosco ("Bosco") has been the Company's President, Chief

Executive Officer ("CEO"), and a member of the Company's Board of Directors since

November 2000. Bosco signed the Company's Registration Statement.

10. Defendant Robert "Bob" J. Nobile ("Nobile") has been the Company's Senior

Vice President of Finance since March 2001 and has been the Company's Chief Financial

Officer ("CFO") since February 2007. Nobile signed the Registration Statement.

11. Defendant Naoya Takahashi ("Takahashi") has been Chairman of the Company's

Board of Directors since June 2006. Takahashi has been employed in various positions at

Hitachi since 1973, and is currently Vice President and Executive Officer, Executive Vice

President and Chief Technology Officer of Information & Telecommunication Systems Group at

Hitachi. Takahashi signed the Registration Statement.

12. Defendant David Lee ("Lee") has been Co-Chairman of the Company's Board of

Directors since November 2000 and was a member of the Company's Audit Committee at all

times relevant herein. Lee co-founded Global Crossing Ltd. ("Global Crossing") in 1997 with

Gary Winnick and two other investors and was its president through June 2000. Global Crossing

filed for bankruptcy in the wake of massive spending to fund the lavish lifestyles of its top

management, including large personal loans, excessive compensation and funding of personal

residences, furnishings, artwork and a fleet of corporate aircraft. If ranked by assets, Global

Crossing's bankruptcy is the seventh largest filing in American history. Prior to its bankruptcy

filing, Global Crossing insiders sold $1.3 billion of their personal shareholdings, an amount

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equal to the Enron inside sales for the comparable period. Lee was a defendant in the various

shareholder class action cases that followed, and was part of a partial settlement of $245 million

paid by or on behalf of Lee and other current and/or former Global Crossing officers and

directors. Lee signed the Registration Statement.

13. Defendant Tetsuo Takemura ("Takemura") was a director of the Company

between April 2006 and approximately February 14, 2007. Takemura has been employed in

various positions at Hitachi since 1975, and was, at the time of his resignation from the

Company, a Corporate Officer of Hitachi and the Chief Operating Officer for its Information and

Technology Systems Group. Takemura signed the Registration Statement.

14. Defendant Ryuichi Otsuki ("Otsuki") has been a director of the Company since

December 2005. Otsuki has been employed in various positions at Hitachi since 1981 and is

currently the Executive General Manager, Global Business Planning & Operations Division,

Information & Telecommunication Systems at Hitachi. Otsuki signed the Registration

Statement.

15. Defendant John F. Otto, Jr. ("Otto') has been a director of the Company since

approximately February 15, 2007. Otto consented to be named as a person about to become a

director of Opnext in the Registration Statement.

16. Defendants Bosco, Nobile, Takahashi, Lee, Takemura, Otsuki and Otto are

collectively referred to herein as the "Individual Defendants." Each officer who signed the

Registration Statement or consented to being named as being or about to become a director is

statutorily liable for the materially misleading misstatements and material omissions in the

Registration Statement. See 15 U.S.C. §§77k(a)(1) and (3). In addition, because of their

management and/or directorial positions with the Company and their ability to make public

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statements on behalf of Opnext, the Individual Defendants were and are controlling persons who

had the power and influence to cause (and did cause) the Company to engage in the conduct

complained of herein.

17. Opnext and the Individual Defendants are collectively referred to as the "Opnext

Defendants."

The Underwriter Defendants

18. Defendant Goldman, Sachs & Co. ("Goldman") was an underwriter for the

Opnext common stock sold in the IPO.

19. Defendant JPMorgan Securities Inc. ("JPMorgan") was an underwriter for the

.Opnext common stock sold in the IPO.

20. Defendant CIBC World Markets ("CIBC") was an underwriter for the Opnext

common stock sold in the IPO.

21. Defendant Cowen and Company ("Cowen") was an underwriter for the Opnext


22. Defendant Jeffries & Company ("Jeffries") was an underwriter for the Opnext


23. Defendants Goldman, JPMorgan, CIBC, Cowen and Jeffries are collectively

referred to herein as the "Underwriter Defendants." Each of the Underwriter Defendants was an

underwriter for the IPO and is statutorily liable for the materially misleading misstatements and

material omissions in the Registration Statement. See 15 U.S.C. §77k(a)(5).

The Auditor Defendant

24. Defendant Ernst & Young LLP ("E&Y") is an accounting and auditing firm.

E&Y audited Opnext's materially incorrect financial statements that were included in the

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Registration Statement, consented to the use in the Registration Statement of its report for

Opnext's financial statements for the fiscal year ended March 31, 2005 and 2006 and is

statutorily liable for the materially misleading misstatements and material omissions in the

Registration Statement with respect to such financial statements. See 15 U.S.C. §77k(a)(4).

CLAIMS RELATING TO OPNEXT'S IPOREGISTRATION STATEMENT AND PROSPECTUS

Background

25. On February 12, 2007, Opnext filed with the SEC an amended registration

statement on Form S-1/A. This Registration Statement contained, inter alia, a Prospectus.

Opnext's Registration Statement contained its financial statements for the fiscal years ended

March 31, 2005 and 2006 and the quarters and nine month periods ended December 31, 2005

and 2006.

26. The Registration Statement and Prospectus contained, at a minimum, the

following errors: (1) the Company's net loss for the fiscal year ended March 31, 2006 was

understated by approximately $1 million; (2) the Company's net loss for the three-month period

ended June 30, 2006 was understated by approximately $500,000; (3) the Company's net income

for the three-month period ended December 31, 2006 was overstated by approximately

$700,000. The Registration Statement therefore contained untrue statements of material facts

within the meaning of 15 U.S.C. §§77k and 771.

27. On February 14, 2007, Opnext filed an additional amendment to the Registration

Statement on Form S-1/A, and the Registration Statement became effective. On that same date,

the Company announced the pricing of its IPO at $15.00 per share for 16,909,375 shares of

common stock and announced the granting of an option to its underwriters to purchase an

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additional 2,536,406 shares at the offering price. Opnext's shares were listed on NASDAQ and

started to trade publicly on February 15, 2007.

28. On February 13, 2008, the Company disclosed that, in the course of preparing its

financial statements for the quarter ended December 31, 2007, the Company had determined that

errors had occurred in the valuation of inventory consigned to one of its contract manufacturers

and that, as a result, the Company's inventory and trade payables balances and the reported

amounts of cost of goods sold and other income expense, net, were improperly recorded for the

fiscal years ended March 31, 2006 and March 31, 2007, and for the affected quarterly periods in

each of those years. The Company announced that, due to these inconsistencies, it would

probably be forced to restate its reported financial statements for the previous two years.

Accordingly, the Company warned investors not to rely on any of the financial statements issued

by the Company during the previous two years, essentially admitting that its financial reports for

those periods were worthless:

Opnext Announces Expected Restatement of Financial Statements

EATONTOWN, N.J., Feb 13, 2008 (BUSINESS WIRE) -- Opnext, Inc.(NASDAQ:OPXT), a global leader in the design and manufacturing of opticalmodules and components, announced today that in the course of preparing theCompany's financial statements for the quarter ended December 31, 2007, theCompany has determined that errors occurred in the valuation of inventoryconsigned to one of its contract manufacturers and that, as a result, theCompany's inventory and trade payables balances and the reported amounts ofcost of goods sold and other income expense, net, were not properly reported foreach of the fiscal years ended March 31, 2006 and March 31, 2007, and for theaffected quarterly periods in each of those years.

The Company estimates that, as a result of the errors, the Company's net incomewas overstated by approximately $1.8 million for the fiscal year ended March31, 2007 and its net loss was understated by approximately $1.0 million for thefiscal year ended March 31, 2006. In addition, net income was overstated byapproximately $0.7 million for the three-month period ended December 31,2006 and was understated by approximately $0.1 million for the three-monthperiod ended September 30, 2006, while net loss was understated byapproximately $0.5 million for the three-month period ended June 30, 2006.

8

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The Company expects to file an amendment to its Annual Report on Form 10-Kfor the fiscal year ended March 31, 2007 to restate the previously issued auditedfinancial statements for the years ended March 31, 2007 and March 31, 2006.The Company also expects to file amendments to its Quarterly Reports on Form10-Q for the quarters ended June 30, 2007 and September 30, 2007 to restate thepreviously issued comparative financial statements for the quarters ended June 30,2006 and September 30, 2006, respectively. The previously issued comparativefinancial statements for the quarter and nine-month period ended December 31,2006 will be restated in the Company's Quarterly Report on Form 10-Q for thequarter ended December 31, 2007.

Senior management of the Company has reviewed the errors and determinedthat its previously issued financial statements for the above -referenced periodsshould no longer be relied upon. Management has discussed the mattersdescribed above with the Company's Audit Committee of the Board of Directors,and the Audit Committee has concurred with management's determinationsrelating to the restatement. The Audit Committee and management have alsodiscussed the matters described above with Ernst & Young LLP, the Company'sindependent registered public accounting firm. Furthermore, the Company hasnotified the NASDAQ National Market of the review and of the Company'sexpected restatement of previously reported financial statements.

Pending the completion of the restatement, the Company is postponing itsearnings release and the filing of its Quarterly Report on Form 10-Q for thequarter ended December 31, 2007.

(Emphasis added.)

35. On February 25, 2008, the Company filed an amended Form 10-K and two

amended Form 10-Qs with the SEC. The amended Form 10-K contained restatements of its

previously announced financial results for fiscal years ended March 31, 2006 and 2007 and for

each of the eight fiscal quarters during those two fiscal years. The Company filed amended

Form 10-Qs for the quarters ended June 30, 2007 and September 30, 2007 (the amended Form

10-Qs and Form 10-K are collectively referred to herein as the "Restatement").

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MATERIALLY FALSE AND MISLEADINGSTATEMENTS IN THE REGISTRATION STATEMENT

Opnext's Financial Results for its Fiscal Year EndedMarch 31, 2006 as Reported in the Relzistration Statement

36. The following line items for the year ended March 31, 2006 were reported in the

Summary Consolidated Financial Data and Selected Consolidated Financial Data sections of the

Company's Registration Statement:

Consolidated statement of operations data (in thousands):Cost of sales $119,626Gross margin 32,065Gross margin % 21.1%Operating income (loss) (36,184)Other income (expense), net 1,886Income (loss) before income taxes (30,196)Net income (loss) (30,474)

Net income (loss) per share:Basic (0.59)Diluted (0.59)

Consolidated balance sheet data (in thousands):Total assets $216,826Total shareholders' equity 119,663

37. The Company's inventory components disclosure in its Registration Statement

was reported as follows:

Components of inventories are summarized as follows:

December 31, 2006 March 31, 2006(in thousands)

Raw materials $32,770 $23,053Work in process 22,078 14,045Finished goods 10,321 8,767

Inventories, net $65,169 $45,865

Inventories are net of reserves of $27,326 and $24,254 at December 31,2006 and March 31, 2006, respectively.

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38. The statements referenced in paragraphs 36 and 37 above contained untrue

statements of material facts or omitted to state material facts required to be stated therein or

necessary to make the statements therein not misleading, within the meaning of 15 U.S.C. §§77k

and 771, because, as the Company has stated, there were errors that occurred in the valuation of

inventory consigned to one of Opnext's contract manufacturers. As a result of those errors, the

Company's financial statements contained in the Registration Statement were misleading

because, among other reasons, the Company's net loss was understated by approximately $1

million for the fiscal year ended March 31, 2006, the Company's accumulated deficit was

understated by approximately $1 million, inventories, current assets and total assets were

overstated by approximately $900,000, trade payables, total current liabilities and total liabilities

were understated by approximately $150,000, and shareholders' equity was overstated by

approximately $1 million. Finally, as a result of these errors, the reported amounts of costs of

goods sold and other income expense, net, were not properly reported in the Registration

Statement for the fiscal year ended March 31, 2006.

39. The February 25, 2008 Restatement restated the materially incorrect operating

results for the year ended March 31, 2006 as follows:

(in thousands) as % of sales(as restated) (as restated)

Cost of sales $120,320 79.3%Gross margin 31,371 20.7%Operating loss (36,878) (24.3)%Other income, net 1,561 1.0%Loss before income taxes (31,215) (20.6)%Net loss (31,493) (20.8)%

40. The February 25, 2008 Restatement also restated numerous Consolidated Balance

Sheets line items for the year ended March 31, 2006 that had resulted from the Company's

materially incorrect inventory valuation:

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As of March 31, 2006As Previously

Reported Adjustments As Restated(in thousands)

Inventories, net $45,865 $(857) $45,008Total current assets 170,975 (857) 170,118Total assets 216,826 (857) 215,969Trade payables 26,127 154 26,281Total current liabilities 89,447 154 89,601Total liabilities 97,163 154 97,317Accumulated deficit (281,785) (1,019) (282,804) Accumulated othercomprehensive loss (5,195) 8 (5,187) Total shareholders'equity 119,663 (1,011) 118,652Total liabilities andshareholders' equity 216,826 (857) 215,969

41. The February 25, 2008 Restatement also restated numerous Consolidated

Statements of Operations line items for the year ended March 31, 2006 that had resulted from the

Company's materially incorrect inventory valuation:

For the year ended of March 31, 2006As Previously

Reported Adjustments As Restated(in thousands)

Cost of sales $119,626 $694 $120,320Gross margin 32,065 (694) 31,371Operating loss (36,184) (694) (36,878) Other income, net 1,886 (325) 1,561Loss before incometaxes (30,196) (1,019) (31,215)Net loss (30,474) (1,019) (31,493)Net loss per sharebasic and diluted (0.59) (0.02) (0.61)

42. The February 25, 2008 Restatement also restated numerous Consolidated

Statements of Cash Flows line items for the year ended March 31, 2006 that had resulted from

the Company's materially incorrect inventory valuation:

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For the year ended of March 31, 2006

As Previously AsReported Adjustments Restated

(in thousands)Net loss $(30,474) (1,019) (31,493) Inventories, net (5,661) 857 (4,804)Trade payables 2,037 154 2,191Net cash used inoperating activities (30,173) (8) (30,181)Effect of foreignexchange rates oncash and cashequivalents (316) 8 (308)

Opnext's Third Quarter Fiscal 2007 Financial Resultsas Reported in the Registration Statement

43. The Company's Registration Statement stated, in pertinent part: "For the first

time, we achieved positive net income of $1.2 million during the quarter ended September 30,

2006 and our net income was $3.2 million for the quarter ended December 31, 2006."

44. The following line items for the three months ended December 31, 2005 and 2006

were reported in the Summary Consolidated Financial Data, Selected Consolidated Financial

Data, and Management's Discussion and Analysis of Financial Condition and results of

Operations sections of the Company's Registration Statement:

Consolidated statement of operations dataThree Months Ended December 31,2006 2005 2006 2005

(in thousands) (as % of sales)Cost of sales $40,073 27,925 64.9% 72.3%Gross margin 21,663 10,684 35.1% 27.7%Operating income (loss) 3,235 (5,918) 5.2% (15.3%)Income (loss) beforeincome taxes 3,225 (4,089) 5.2% (10.6%)Net income (loss) 3,225 (4,089) 5.2% (10.6%)

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Case 3:08-cv-00920-JAP-JJH Document 32 Filed 07/30/2008 Page 14 of 28

45. The following line items as of December 31, 2006 were reported in the Summary

Consolidated Financial Data and Selected Consolidated Financial Data sections of the

Company's Registration Statement:

Consolidated balance sheet dataDecember 31, 2006

(in thousands)Total assets $232,908Total shareholders' equity 120,350

46. The following data were also presented in the Company's Registration Statement:

Three Months EndedDec. 31, Sept. 30, June 30,

2006 2006 2006(in thousands)

Gross margin $21,663 $18,454 $13,261Net income (loss) 3,225 1,174 (3,474)Net income (loss) per share:

Basic 0.06 0.02 (0.07)Diluted 0.06 0.02 (0.07)

Three Months EndedMarch 31, Dec. 31, Sept. 30,

2006 2005 2005(in thousands)

Gross margin $13,289 $10,684 $4,517Net loss (2,779) (4,089) (12,090) Net income (loss) per share:

Basic (0.05) (0.08) (0.23) Diluted (0.05) (0.08) (0.23)

Opnext's Financial Results for the Nine Months EndedDecember 31, 2006 as Reported in the Registration Statement

47. The following line items for the nine months ended December 31, 2006 and 2005

were reported in the Summary Consolidated Financial Data and Selected Consolidated Financial

Data sections of the Company's Registration Statement:

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Case 3:08-cv-00920-JAP-JJH Document 32 Filed 07/30/2008 Page 15 of 28

Consolidated statement of operations dataNine Months Ended December 31,

2006 2005 2006 2005

(in thousands) (as % of sales)Cost of sales $104,105 $86,707 66.1% 82.2%Gross margin 53,378 18,776 33.9% 17.8%Operating income (loss) 528 (32,287) 0.3% (30.6%) Income (loss) beforeincome taxes 925 (27,695) 0.6% (26.3%) Net income (loss) 925 (27,695) 0.6% (26.3%)

48. The statements referenced in paragraphs 43 to 47 above contained untrue

statements of material facts or omitted to state material facts required to be stated therein or

necessary to make the statements therein not misleading, within the meaning of 15 U.S.C. §§77k

and 771, because, as the Company has stated, there were errors that occurred in the valuation of

inventory consigned to one of Opnext's contract manufacturers. As a result of those errors, the

reported amounts of costs of goods sold and other income expense, net, were not properly

reported for each of the fiscal years ended March 31, 2006 and March 31, 2007 and for the

affected quarterly periods in each of those years. As a result of these errors, the financial

statements contained in the Registration Statement were misleading because, among other

reasons:

a. The Company's net loss was understated by approximately $500,000 for

the three month period ended June 30, 2006;

b. The Company's actual net income for the quarter ended December 31,

2006 was overstated by $700,000;

C. The Company's incorrect inventory valuation also resulted ' in

misstatements of Cost of Sales, Gross Margin, and Net Loss for each of the fiscal quarters from

September 30, 2005 through June 30, 2007; and

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d. As a result of the foregoing, the Company's financial results contained in

the Registration Statement for the nine months ended December 31, 2006 were also misleading.

49. In the Restatement, Opnext restated its Cost of Sales, Gross Margin, and Net

Income (Loss) data for each of the fiscal quarters beginning September 30, 2005 through

December 31, 2006 as follows:

Three Months Ended

Dec. 31, 2006 Sept. 30, 2006 June 30, 2006(in thousands)

(as restated) (as restated) (as restated) Gross margin $20,628 $18,513 $12,776Net income (loss) 2,513 1,233 (3,959) Net income (loss) pershare:

Basic 0.05 0.02 (0.08)Diluted 0.05 0.02 (0.08)

Three Months EndedMarch 31, 2006 Dec. 31, 2005 Sept. 30, 2005

(in thousands)(as restated) (as restated) (as restated)

Gross margin $14,242 $9,963 $4,517Net loss (2,576) (4,668) (12,090)Net income (loss)per share:

Basic (0.05) (0.09) (0.23) Diluted (0.05) (0.09) (0.23)

LEAD PLAINTIFF'S CLASS ACTION ALLEGATIONS

50. Lead Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a class consisting of all those who purchased or

otherwise acquired Opnext common stock pursuant to or traceable to the Company's IPO during

the Class Period and who were damaged thereby (the "Class"). Excluded from the Class are the

Defendants, the officers and directors of the Company, at all relevant times, as well as members

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of their immediate families and their legal representatives, heirs, successors or assigns, and any

entity in which Defendants have or had a controlling interest.

51. The members of the Class are so numerous that joinder of all members is

impracticable. In the Company's IPO, over 19 million shares of Opnext common stock were

sold. While the exact number of Class members is currently unknown to Lead Plaintiff, it can be

ascertained through appropriate discovery of the records of Defendant Opnext and/or its transfer

agent(s), and Lead Plaintiff believes that there are hundreds, if not thousands, of members in the

proposed Class. Class members identified from records maintained by Opnext or its transfer

agent may be notified of the pendency of this action by mail, using a form of notice similar to

that customarily used in securities class actions.

52. Lead Plaintiff's claims are typical of the claims of the other members of the Class.

All Class members have been similarly affected by Defendants' violations of the federal

securities laws, as set forth herein.

53. Lead Plaintiff is willing and able to represent and protect the interests of the other

Class members fairly and adequately and has retained counsel highly competent and experienced

in securities class action litigation.

54. Common issues of law and fact exist and pertain to all Class members and

predominate over any issues solely affecting individual Class members. Some examples of these

common issues of law and fact are:

a. Whether the Defendants' conduct as set forth herein violated the Securities

Act;

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b. Whether the Registration Statement and Prospectus issued by the

Defendants to the investing public omitted and/or materially misrepresented facts about Opnext's

business, operations, management, and financial results, among other things; and

C. The extent to which Class members have suffered damages as a result of

the Defendants' conduct outlined herein, and the proper measure of those damages.

55. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy because joinder of all members is impracticable and because the

individual damages sustained by each Class member are likely to be so small as to outweigh the

expense and burden of individual litigation. These facts make it practically impossible for Class

members to seek redress for the wrongs done to them on an individual basis. Moreover, there

will be no difficulty in managing this action as a class action.

COUNT

Violation of Section 11 of the Securities Act

(Against the Opnext Defendants, the Underwriter Defendants and E&Y)

56. Lead Plaintiff repeats, realleges and incorporates by reference each and every

allegation set forth in paragraphs 1 through 55 above, as if fully set forth herein.

57. This claim is predicated upon Defendants' strict liability for making untrue

statements of material fact in Opnext's Registration Statement, or for omitting to state material

facts required to be stated therein or necessary to make the statements therein not misleading,

within the meaning of the plain language of Section 11, 15 U.S.C. §77k. Lead Plaintiff expressly

excludes and disclaims any interpretation of any allegation as alleging intentional misconduct or

recklessness rising to the level of fraud. Therefore, this claim is not based in and does not sound

in fraud.

18


58. This claim is brought against all Defendants by Lead Plaintiff on its own behalf

and on behalf of other members of the Class who acquired Opnext stock pursuant to or traceable

to the Company's IPO. Each Class member acquired his, her, or its Opnext shares pursuant to

and/or traceable to, and in reliance on, the Registration Statement. The Registration Statement

was inaccurate and misleading, contained untrue statements of material facts, omitted to state

other facts necessary to make the statements made not misleading, and concealed and failed

adequately to disclose material facts as described above.

59. Defendants are strictly liable for the misstatements and omissions and for the

damages that Lead Plaintiff and other members of the Class have sustained thereby. All

Defendants are responsible for the contents and dissemination of the Registration Statement, and

none conducted a reasonable investigation or possessed reasonable grounds for the belief that the

statements contained in the Registration Statement were true, without omissions of any material

facts, and not misleading when the Registration Statement became effective. Defendants issued,

caused to be issued and participated in the issuance of the materially false and misleading written

statements to the investing public that were contained in the Registration Statement. For the

conduct herein alleged, each Defendant violated, and/or controlled a person who violated,

Section 11 of the Securities Act.

60. When the material misrepresentations and omissions outlined herein were made,

Lead Plaintiff and other members of the Class were unaware of their falsity and reasonably

believed that they were true. Had Lead Plaintiff and the other members of the Class and the

marketplace known the truth regarding Opnext's actual financial situation, which was not

disclosed by Defendants, Lead Plaintiff and other members of the Class would not have invested

in Opnext common stock, or, if they had invested in such common stock during the Class Period,

19


would not have made such investments at the prevailing artificially inflated prices which were

paid.

61. By virtue of the foregoing, Defendants have acted in violation of Section 11 of the

Securities Act and Lead Plaintiff and other members of the Class who purchased or otherwise

acquired the Company's stock pursuant to and/or traceable to the IPO are entitled to damages

pursuant to Section 11.

62. This action is brought within one year after discovery of the untrue statements and

omissions in the Registration Statement that should have been made and/or corrected through the

exercise of reasonable diligence, and within three years of the effective date of the Registration

Statement.

COUNT II

Violation of Section 12(a)(2) of the Securities Act

(Against the Opnext Defendants and Underwriter Defendants)

63. Lead Plaintiff repeats, realleges and incorporates by reference each and every

allegation set forth in paragraphs I through 62 above, as if fully set forth herein.

64. This claim is predicated upon Defendants' strict liability for making untrue

statements of material fact in Opnext's Prospectus, or for omitting to state material facts required

to be stated therein or necessary to make the statements therein not misleading, within the

meaning of the plain language of Section 12(a)(2), 15 U.S.C. §771. Lead Plaintiff expressly

excludes and disclaims any interpretation of any allegation as alleging intentional misconduct or

recklessness rising to the level of fraud. Therefore, this claim is not based in and does not sound

in fraud.

20


65. This claim is brought against Defendant Opnext, the Individual Defendants, and

the Underwriter Defendants, for violations of Section 12(a)(2) of the Securities Act on behalf of

all Class members who purchased Opnext securities pursuant to the Prospectus.

66. Defendants were sellers, offerors, and/or solicitors of purchasers of the shares

offered pursuant to the Prospectus.

67. The Opnext IPO Prospectus contained untrue statements of material fact and

omitted to state other facts necessary to make the statements made not misleading, within the

meaning of 15 U.S.C. §771(a)(2). The Individual Defendants' actions of solicitation included

participating in the preparation of the false and misleading Prospectus.

68. Defendants owed to the purchasers of Opnext's securities, including Lead

Plaintiff and other members of the Class, the duty to make a reasonable and diligent investigation

of the statements contained in the IPO materials, including the Prospectus, to ensure that such

statements were true and that there was no omission to state a material fact required to be stated

in order to make the statements contained therein not misleading.

69. Lead Plaintiff and other members of the Class purchased or otherwise acquired

Opnext's securities pursuant to and/or traceable to the defective Prospectus. Lead Plaintiff did

not know of the untruths and omissions contained in the Prospectus.

70. Lead Plaintiff, individually and representatively, hereby offers to tender to

Defendants those securities which Lead Plaintiff and the Class members continue to own, on

behalf of all members of the Class who continue to own such securities, in return for the

consideration paid for those securities together with interest thereon. Class members who have

sold their Opnext securities are entitled to rescissory damages.

21


71. By reason of the conduct alleged herein, these Defendants violated, and/or

controlled a person who violated Section 12(a)(2) of the Securities Act. Accordingly, Lead

Plaintiff and members of the Class who hold Opnext securities purchased in the IPO have the

right to rescind and recover the consideration paid for their Opnext securities, and hereby elect to

rescind and tender their Opnext securities to the Defendants sued herein. Lead Plaintiff and

Class members who have sold their Opnext securities are entitled to rescissory damages.

72. This action is brought within three years from the time that the securities upon

which this Count is brought was sold to the public, and within one year from the time when Lead

Plaintiff discovered or reasonably could have discovered the facts upon which this claim in

based.

COUNT III

Violation of Section 15 of the Securities Act

(Against the Individual Defendants and Hitachi)

73. Lead Plaintiff repeats and realleges and incorporates by reference each and every

allegation set forth in paragraphs I through 72 above, as if fully set forth herein.

74. This Claim is brought against the Individual Defendants and Hitachi pursuant to

Section 15 of the Securities Act, 15 U.S.C. §77o, on behalf of Lead Plaintiff and other members

of the Class who purchased or otherwise acquired the Company's stock pursuant and/or traceable

to the Registration Statement and Prospectus.

75. The Company is liable under Section 11 and Section 12(a)(2) of the Securities

Act as set forth in Counts I and II herein with respect to the Registration Statement and

Prospectus.

76. Each of the Individual Defendants were control persons of Opnext with respect to

the Offering by virtue of the individual's position as a senior executive officer and/or director of

22


the Company. Defendant Bosco has been President, CEO and a director of the Company since

the Company was formed in 2000. Defendant Nobile has been CFO and/or a senior executive in

the Company's financial department since March 2001, and as CFO in particular was directly

responsible for the Company's financial reporting function. The other Individual Defendants

comprise the rest of the Company's board of directors and likewise exert control over the

Company, particularly in the context of an IPO, which requires the participation of each of the

Company's directors and each person about to become a director.

77. Hitachi was a control person of Opnext by virtue of its control over Opnext's

operations through a combination of significant stock ownership, board representation, and the

various agreements through which Opnext is dependent upon Hitachi. Opnext was created by

Hitachi, and Hitachi was the majority owner of Opnext at the time of the IPO and at the time that

the Registration Statement (including all the false statements in the Registration Statement) was

prepared. Hitachi representatives represented fully one-half of the Company's board of directors

at the time of the IPO, as defendants Takahashi, Takemura, Otsuki were directors of Opnext and

also high ranking officers of Hitachi. In forming Opnext as a Hitachi subsidiary, Hitachi and

Opnext also entered into a series of agreements whereby Hitachi would have contractual rights to

continue to control Opnext's operations. For instance, Hitachi and Opnext are parties to a series

of agreements whereby Opnext is licensed to use intellectual property of Hitachi while Hitachi

continues to own the intellectual property. Indeed, Opnext markets and labels its products as

"Powered by Hitachi." Hitachi and Opnext are also parties to research and development

agreements whereby Hitachi provides research and development support to Opnext and, unless

Opnext funds at least 50% of the costs, Hitachi will own any intellectual property resulting from

the research. Hitachi also controls much of the operational administration of Opnext. For

23


instance, Hitachi provides human resources services, finance and accounting services,

information systems services, procurement services and other general support services to

Opnext, and Hitachi also leases various manufacturing and administrative facilities to Opnext.

Hitachi and Opnext are also parties to finance agreements whereby Hitachi lends money to

Opnext to purchase certain capital equipment.

78. The Individual Defendants and Hitachi controlled the Company as well as the

contents of the Registration Statement and Prospectus at the time of the Company's Initial Public

Offering. The IPO could not have been conducted without the participation and approval of the

Individual Defendants and Hitachi. Each of the Individual Defendants and Hitachi was provided

with or had unlimited access to copies of the Registration Statement and Prospectus and had the

ability either to prevent their issuance or to cause them to be corrected. Indeed, Hitachi sold

6,666,666 shares of its Opnext common stock in the IPO via the Registration Statement and

Prospectus.

79. As a result, the Individual Defendants and Hitachi are liable under Section 15 of

the Securities Act for the Company's primary violations of Section I I and Section 12(a)(2) of

the Securities Act.

80. By virtue of the foregoing, Lead Plaintiff and other members of the Class who

purchased or otherwise acquired the Company's stock pursuant and/or traceable to the Offering

are entitled to damages against the Individual Defendants and Hitachi.

WHEREFORE, Lead Plaintiff prays for relief and judgment, as follows:

A. Determining that this action is a proper class action under Rule 23 of the Federal

Rules of Civil Procedure;

24


B. Certifying Lead Plaintiff as a class representative under Rule 23 of the Federal

Rules of Civil Procedure;

C. Awarding compensatory damages in favor of Lead Plaintiff and the other Class

members against all Defendants, jointly and severally, for all damages sustained as a result of

Defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

D. Awarding Lead Plaintiff and the Class their reasonable costs and expenses

incurred in this action, including counsel fees and expert fees; and

E. Such other and further relief as the Court may deem just and proper.

JURY DEMAND

Lead Plaintiff herby demands a trial by jury.

Dated: July 30, 2008

GARDY & NOTIS, LLP

By: s/ James S. Notis James S. NotisCharles A. Germershausen

440 Sylvan Avenue, Suite 110Englewood Cliffs, New Jersey 07632Tel: 201-567-7377Fax: 201-567-7337

MILBERG LLPSanford P. DumainLeigh SmithTodd L. KammermanOne Pennsylvania Plaza, 49"' FloorNew York, New York 10119Tel: 212-594-5300Fax: 212-868-1229

Co-Lead Counsel for Lead Plaintiff and the Class

25


KROLL HEINEMAN, LLCAlbert G. KrollMetro Corporate Campus I99 Wood Avenue South, Suite 307Iselin, New Jersey 08830Tel: 732-491-2100Fax: 732-491-2120

Counsel for Lead Plaintiff New Jersey BuildingLaborers Pension Fund

26


CERTIFICATE OF SERVICE

Notice of this filing will be sent to all counsel of record by operation of the

Court's electronic filing system as follows:

James S. Notis Peter S. PearlmanEmail: 'notis ardylaw.com Email: [email protected] & NOTIS, LLP

COHN, LIFLAND, PEARLMAN,HERRMANN & KNOPF, LLP

Leigh SmithEmail: lsmith(a,milberg.com Counsel for movant Retirement SystemTodd L. Kammerman City of MonroeEmail: [email protected] LLP

Lisa J. RodriguezCo-Lead Counsel for Lead Plaintiff Email: [email protected] the Class TRUJILLO, RODRIGUEZ &

RICHARDS, LLP

Laurence M. Rosen Counsel for movants Frank C. Pertonis,Email: [email protected] Patricia A. Petronis, Todd A. Stephens andTHE ROSEN LAW FIRM, PA Amy A. Stephens

Counsel for plaintiff David Bixlerand movant Warren Stobbe Gary S. Graifman

Email: [email protected], GOLDHAMER &

Jennifer Sarnelli GRAIFMAN, ESQS.Email: [email protected], DEPALMA, Counsel for movant George BakerGREENBERG & RIVAS, LLC

Counsel for plaintiff Karen Alan E. KrausColeman Email: [email protected]

John M. Falzone, IIIEmail: [email protected]

Daniel S. Somers LATHAM & WATKINS, LLPEmail: [email protected], MILSTEIN, Counsel for defendants Opnext Inc., HarryHAUSFELD & TOLL, PLLC L. Bosco, Robert J. Noble, Tetsuo

Takemura, Ryuichi Otsuki, NaoyaCounsel forplaintiWilliam G. Takahashi and David LeeJohnson and movant Hsiu-HwaLee


s/ James S. Notis James S. NotisGARDY & NOTIS, LLP440 Sylvan Avenue, Suite 110Englewood Cliffs, New Jersey 07632Tel: 201-567-7377Fax: 201-567-7337

2


EXHIBIT B


OPNEXT INC

FORM 424134(Prospectus filed pursuant to Rule 424(b)(4))

Filed 2/16/2007

Address 1 Christopher Way

Eatontown, New Jersey 07724

Telephone 732- 544-3400

CIK 0001157780

ht"^ srrv.a^^ ^r-urli=-^+ yarn;Cupp-fiylu 005 All Rights Re 5c.;vurl

DistribWion and use ,)i his couumn`-- tcsWicted ur-dcr EDGA R Oriirrs Terris of Uss,.

Table of Case 3:08-cv-00920-JAP-LHG Document 83-3 Filed 12/22/2008 Page 3 of 8

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

The following discussion includes forward-looking statements that involve risks and uncertainties. Ouractual results could differ substantially from those anticipated as a result of many factors including thoseset forth in "Risk Factors, " included elsewhere in the document. The following discussion should be readtogether with our financial statements, the related notes thereto and the other financial informationincluded elsewhere in the document.

OVERVIEW

We are a leading designer and manufacturer of optical modules and components which enable high-speed telecommunications and data communications networks globally. In particular, we design,manufacture and market optical modules and components that transmit and receive data and are primarilyused in telecommunications and data communications networks. We have one of the most comprehensivetransceiver product portfolios for both of these markets, particularly at the 10Gbps data rate, which we sellto many of the leading network systems vendors. Our product portfolio includes a broad range of solutionsthat vary by level of integration, communications protocol, form factor and performance level. Our portfolioconsists of 10Gbps and 40Gbps transceiver modules, including tunable transceivers, a broad line of2.5Gbps and lower speed SFP transceivers, and new or planned products for emerging standards such asSFP+ and XMD.

We were incorporated as a wholly-owned subsidiary of Hitachi, Ltd., or Hitachi, on September 18,2000. On September 28, 2000, Opnext Japan, Inc. was established by Hitachi and on January 31, 2001,Hitachi contributed the fiber optic components business of its telecommunications system division toOpnext Japan, Inc. On July 31, 2001, Hitachi contributed 100% of the shares of Opnext Japan, Inc. to usin exchange for 70% of our then outstanding Class A common shares and Clarity Partners, L.P., ClarityOpnext Holdings I, LLC, and Clarity Opnext Holdings II, LLC (collectively referred to as Clarity) togethercontributed $321.3 million in exchange for Class A common stock representing a 30% interest in ourcompany.

On October 1, 2002, we acquired 100% of the shares of Opto Device, Ltd. from Hitachi for a purchaseprice of $40.0 million. This acquisition of Hitachi's opto device business expanded our product line intoselect industrial and commercial markets, which we refer to as our industrial and commercial products. OnJune 4, 2003 we acquired 100% of the outstanding shares of Pine Photonics Communication Inc., or Pine,in exchange for 1,672,476 shares of our Class B common stock. This acquisition expanded our productline of SFP transceivers with data rates less than 10Gbps that are sold to telecommunication and datacommunication customers. We refer to these products, together with our legacy 2.5 Gbps custommodules, as our less than 10Gbps products.

Since our founding we have expanded our global sales and marketing reach by opening severaloffices in the U.S., Europe and China which are strategically located in close proximity to our majorcustomers. We established a corporate administrative headquarters and established our owninfrastructure as we significantly reduced the nature and extent of services provided by Hitachi. We alsointegrated the acquisitions of Opto Device, Ltd. and Pine and improved the flexibility of our manufacturingprocesses by expanding the use of contract manufacturers. These accomplishments along with continuedinvestments in product development and expansion of our customer base were achieved during one of themost drastic telecommunications and data communications market declines in history.

Due to deteriorating market conditions our sales began to significantly decrease during the quarterended September 30, 2001 and continued to decline for the next eight quarters. Our sales started torecover during the quarter ended December 31, 2003 and have increased through our most recent quarterwhich ended on December 31, 2006. Much of this growth has been a result of increased demand for our10Gbps and 40Gbps products which have grown from 38.9% of our revenue in the year ended March 31,2004 to 78.6% of revenue in the nine month period ended December 31, 2006. Through June 30, 2006our quarterly sales fluctuated with demand and we

29

Case 3:08-cv-00920-JAP-LHG Document 83-3 Filed 12/22/2008 Page 4 of 8Table of Contents

experienced operating losses which, along with capital investments and the acquisitions of Opto Device,Ltd. and Pine, were primarily financed with funds received from the sale of shares to Clarity and short-termloans. For the first time, we achieved positive net income of $1.2 million during the quarter endedSeptember 30, 2006 and our net income was $3.2 million for the quarter ended December 31, 2006.

The following are factors that affect our results of operations:

SalesThrough our direct sales force supported by manufacturer representatives and distributors, we sell

products to many of the leading network systems vendors throughout North America, Europe, Japan andAsia. Our customers include many of the top telecommunications and data communications networksystems vendors in the world. We also supply components to several major transceiver modulecompanies and sell to select industrial and commercial customers. Sales to telecommunication and datacommunication customers, our communication sales, accounted for 92.9%, 90.5%, 81.9%, 72.4% and66.7% of our sales during the three and nine month periods ended December 31, 2006 and each of theyears ended March 31, 2006, 2005 and 2004, respectively. Also during the three and nine month periodsended December 31, 2006 and each of the years ended March 31, 2006, 2005 and 2004, sales of ourproducts with 10Gbps or higher data rates, which we refer to as our 10Gbps & above products,represented 82.9%, 78.6%, 69.4%, 58.7% and 38.9% of total sales, respectively.

The number of leading network systems vendors that supply the global telecommunications and datacommunications markets is concentrated, and so, in turn, is our customer base. For the year endedMarch 31, 2006, our top three customers, Cisco Systems Inc. and subsidiaries, "Cisco", Hitachi togetherwith its affiliates, and Alcatel accounted for 27.9%, 15.0% and 12.7% of our sales, respectively and duringthe nine months ended December 31, 2006, Cisco and Alcatel-Lucent accounted for 37.3% and 19.7% ofour sales, respectively. Although we have and will continue to attempt to expand our customer base, weanticipate that these customers will generally continue to represent a significant portion of our customerbase and be responsible for significant percentages of our revenues.

The evaluation and qualification cycle prior to the initial sale of our products generally spans a year ormore. Although we negotiate the sale of our products directly with most of our customers, certain purchaseorders for our products are received from contract manufacturers on behalf of several of our networksystems vendor customers following our direct negotiation with the respective customers. We recognizerevenue when title and risk of loss have been transferred to the customer, the price is fixed ordeterminable and collectability is reasonably assured. These conditions generally exist upon shipment orupon notice from certain customers in Japan that they have completed their inspection and have acceptedthe product.

Our revenues are affected by capital spending for telecommunications and data communicationsnetworks and for lasers and infrared LEDs used in select industrial and commercial markets. The primarymarkets for our products have recently been characterized by increasing volumes and declining averageselling prices. The increasing demand for our products is primarily driven by increases in traditionaltelecommunication and data communication traffic and increasing demand from new communicationapplications such as VoIP (voice over internet protocol), peer-to-peer file sharing, IP-TV, videoconferencing, on-line gaming and advanced wireless services as well as new industrial and commerciallaser applications. The decreasing price trends are primarily due to industry over-capacity, increasedcompetition and the introduction of new products. We anticipate that our average selling prices willcontinue to decrease in future periods, although we cannot predict the timing and extent of thesedecreases. In the past we have experienced volume decreases primarily due to declining demand forglobal information networks, excess industry capacity and increased competition from other providers ofcompeting products.

30

Table Case 3:08-cv-00920-JAP-LHG Document 83-3 Filed 12/22/2008 Page 5 of 8

MANAGEMENT

Executive Officers

The following table sets forth certain information regarding our directors and executive officers as ofDecember 31, 2006.

Name Age Position Harry L. Bosco 61 Director, President & Chief Executive OfficerMichael C. Chan 52 Executive Vice President, Business Development and

Product Portfolio ManagementChi-Ho Christopher Lin 43 Senior Vice President, Global SalesRobert J. Nobile 46 Chief Financial Officer and Senior Vice President,

FinanceKei Oki 58 Executive Vice President, Opnext, Inc. & President,

Opnext Japan, Inc.Tammy L. Wedemeyer 37 Vice President, Business Management / Corporate

SecretaryDr. Naoya Takahashi (1)(2) 58 Chairman of the BoardDr. David Lee (1)(2) 57 Co-Chairman of the BoardTetsuo Takemura 55 DirectorRyuichi Otsuki 48 DirectorJohn F. Otto, Jr. (1)(2) 58 Director Nominee*

* Expected to become a director prior to the commencement of trading of our common stock on theNASDAQ Global Market.

(1) Member of the compensation committee.(2)Member of the audit committee.

Harry L. Bosco has served as our president, chief executive officer and board director sinceNovember 2000. Mr. Bosco served in various management, engineering and executive positions at LucentTechnologies/AT&T/Bell Laboratories from 1965 to October 2000; his most recent position as OpticalNetworking Group President. Mr. Bosco holds an Associate of Science and Bachelor of Science inElectrical Engineering from Pennsylvania State University/Monmouth University and a Master of Sciencein Electrical Engineering from Polytechnic Institute of New York. Mr. Bosco has been a Director on theArris Inc. Board since 2002.

Michael C. Chan has served as our executive vice president of business development and productportfolio management since January 2001. Mr. Chan spent more than 18 years with Lucent Technologies,AT&T and Bell Laboratories. Mr. Chan's last position at Lucent was as chief strategy officer for the OpticalNetworking Group and before that as Chairman and President of Lucent China, Mr. Chan holds aBachelor of Arts in Physics, Brandeis University and a Master of Science in Operations Research,Columbia University, and is a graduate of the Wharton Advanced Management Program, University ofPennsylvania.

Chi-Ho Christopher Lin has served as our senior vice president of global sales since January 2001.Prior to joining Opnext, Mr. Lin held several senior engineering and sales positions at varioustelecommunications companies; his most recent position as Chief Operating Officer for LucentTechnologies China Ltd. Mr. Lin holds a Bachelor of Science in Electrical Engineering from the Universityof Washington and a Master of Science from Columbia University.

Robert J. Nobile has served as our senior vice president of finance since March 2001 and mostrecently was appointed Chief Financial Officer. Mr. Nobile served in various financial positions throughouthis career; his most recent at Kodak Polychrome Graphics, a global joint venture between Eastman Kodakand Sun Chemical, whereby he held the position of senior vice president of business

60


integration, and before that as senior vice president and chief financial officer. Mr. Nobile holds a Bachelorof Science in Accounting from St. John's University and is a CPA.

Kei Oki has served as executive vice president and Opnext Japan Inc. president since April 2004.Mr. Oki served in various management and executive positions at Hitachi from 1988 to 2004; his mostrecent position as executive project manager at Information and Telecommunication Systems,International Sales Division. Mr. Oki holds a Bachelor of Arts in Economics from Keio University.

Tammy L. Wedemeyer has served as our vice president of business management since January 2001and corporate secretary since May 2005. Ms. Wedemeyer spent more than ten years at LucentTechnologies in a variety of business management roles, most recently as senior operations manager ofthe Optical Networking Group. Ms. Wedemeyer holds an Associate of Arts in Administration fromBrookdale Community College.

Dr. Naoya Takahashi has served on our board of directors as chairman since June 2006.Dr. Takahashi presently serves as Vice President and Executive Officer, Executive Vice President andChief Technology Officer of Information & Telecommunication Systems Group at Hitachi, Ltd, responsiblefor leading the company's storage and platform network business. Since joining Hitachi in 1973,Dr. Takahashi has held a number of positions, playing key roles in marketing, research and developmentand business management. Dr. Takahashi holds a bachelor's degree and a master's degree in ElectricalEngineering from Keio University in Japan. He also holds a PhD in Information Engineering from KeioUniversity and served as a visiting scholar at the Computer Systems Laboratory, Stanford University.

Dr. David Lee has served on our board of directors as cc-chairman since November 2000. Dr. Lee isa co-founder and Managing General Partner of Clarity Partners, L.P., a private equity investment firmbased in Los Angeles. Prior to the formation of Clarity Partners, Dr. Lee co-founded Global Crossing Ltd.in 1997, a global broadband communication services provider, and was its president through June 2000.Global Crossing Ltd. filed for bankruptcy in January 2002. Dr. Lee is a graduate of McGill University andholds a Doctorate in physics with a minor in economics from the California Institute of Technology.

Tetsuo Takemura has served as a board director since April 2006. Mr. Takemura has held variouspositions at Hitachi from 1975 to present. He is currently the Corporate Officer of Hitachi and serves as theChief Operating Officer for the Information and Technology Systems Group. Mr. Takemura holds amaster's degree in Engineering from Tokyo Institute of Technology. Mr. Takemura has resigned from ourboard of directors effective prior to the commencement of trading of our common stock on the NASDAQGlobal Market.

Ryuichi Otsuki has served as a board director since December 2005. Mr. Otsuki has held variouspositions at Hitachi from 1981 to present including Hitachi Data Systems and PC Corporation as well asmany functions within the Global Business Planning and Operation Division. He is currently the ExecutiveGeneral Manager, Global Business Planning & Operations Division, Information & TelecommunicationSystems at Hitachi. Mr. Otuski graduated from Nagoya University School of Law.

John F. Otto, Jr. will serve as a board director prior to the commencement of trading of our commonstock on the NASDAQ Global Market. Mr. Otto presently is a Principal at Waterfront Partners, LLC. Priorto his current position, Mr. Otto has held various investment banking positions, including as a ManagingDirector at Merrill Lynch & Co., Senior Managing Director at Bear Stearns & Co., Inc. and most recently asa Managing Director at Salomon Brothers/Salomon Smith Barney/Citigroup from which he retired in 2002.Mr. Otto is a graduate of Boston College and holds a Master of Business Administration degree fromColumbia University Graduate School of Business.

61


INDUSTRY AND MARKET DATA

We obtained the industry, market and competitive position data throughout this prospectus from ourown internal estimates and research as well as from industry and general publications and research,surveys and studies conducted by third parties.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed upon for us by Latham &Watkins LLP, Los Angeles, California. The underwriters are represented by Ropes & Gray LLP.

EXPERTS

The consolidated financial statements of Opnext, Inc. as of March 31, 2006 and 2005, and for each ofthe three years in the period ended March 31, 2006, appearing in this Prospectus and RegistrationStatement have been audited by Ernst & Young LLP, independent registered public accounting firm, asset forth in their reports thereon appearing elsewhere herein, and are included in reliance upon suchreports given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 (including the exhibits, schedules,and amendments to the registration statement) under the Securities Act with respect to the shares ofcommon stock offered by this prospectus. This prospectus does not contain all of the information set forthin the registration statement. For further information about us and the new shares of common stock to besold in this offering, we refer you to the registration statement. Statements contained in this prospectus asto the contents of any contract, agreement or other document to which we make reference are notnecessarily complete. In each instance, we refer you to the copy of such contract, agreement or otherdocument filed as an exhibit to the registration statement, each such statement being qualified in allrespects by the more complete description of the matter involved.

Upon completion of this offering, we will become subject to the reporting and information requirementsof the Securities Exchange Act of 1934, as amended, and, as a result, will file periodic and current reports,proxy statements, and other information with the SEC. You may read and copy this information at thePublic Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Please call theSEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Copies ofall or any part of the registration statement may be obtained from the SEC's offices upon payment of feesprescribed by the SEC. The SEC maintains an Internet site that contains periodic and current reports,proxy and information statements, and other information regarding issuers that file electronically with theSEC. The address of the SEC's website is http://www.sec.gov .

103

T.► t^l^ of Case 3:08-cv-00920-JAP-LHG Document 83-3 Filed 12/22/2008 Page 8 of 8

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders ofOpnext, Inc.

We have audited the accompanying consolidated balance sheets of Opnext, Inc. and subsidiaries (the"Company") as of March 31, 2006 and 2005, and the related consolidated statements of operations,shareholders' equity and comprehensive income (loss) and cash flows for each of the three years in theperiod ended March 31, 2006. These consolidated financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these consolidated financialstatements based on our audits.

We conducted our audits in accordance with the standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement. We werenot engaged to perform an audit of the Company's internal control over financial reporting. Our auditsincluded consideration of internal control over financial reporting as a basis for designing audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company's internal control over financial reporting. Accordingly, we express no suchopinion. An audit also includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all materialrespects, the consolidated financial position of Opnext, Inc. and subsidiaries at March 31, 2006, and 2005and the consolidated results of their operations and their cash flows for each of the three years in theperiod ended March 31, 2006 in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

New York, New YorkOctober 20, 2006, except for Note 16,as to which the date is January 26, 2007

F-2


EXHIBIT C


OPNEXT INC

FORM 10-KIA(Amended Annual Report)

Filed 07/29/08 for the Period Ending 03/31/08

Address 1 CHRISTOPHER WAYEATONTOWN, NJ 07724

Telephone 7325443400CIK 0001157780

Symbol OPXTSIC Code 3674 - Semiconductors and Related Devices

Industry SemiconductorsSector Technology

http://www.edgar-online.com© Copyright 2008, EDGAR Online, Inc. All Rights Reserved.

Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table ^1 Co Page 3 of 3€e^p 3:08-cv-00920-JAP-LHG Document 83-4 Filed 12/22/2008

Common StockBeneficially Owned

(U(2)Name of Beneficial Owner Number of Percent5% Stockholders Shares of TotalHitachi, Ltd. 29,343,334 (3) 45.4%Clarity Partners, L.P. 7,527,420 (4)(5) 11.6%

Clarity Opnext Holdings 11, LLCClarity Management, L.P.

Marubeni Corporation 7,500,000 (6) 11.6%Marubeni America Corporation

Directors and Named Executive OfficersHarry L. Bosco 1,259,166(7) 1.95%Dr. David Lee 7,527,420 (5) 11.6%Dr. Naoya Takahashi 0John F. Otto, Jr. 2,281Kendall W. Cowan 2,281Dr. Isamu Kuru 2,281Ryuichi Otsuki 0Robert J. Nobile 69,61] (8)Michael C. Chan 233,750 (9)Gilles Bouchard 40,00010)Justin J. O'Neill 25,00001)All directors and executive officers as a group (11 individuals) 9,292,441 (5)(6)(7) 14.4%

* Less than I%.

(1) Beneficial ownership is determined under the rules of the SEC, and includes voting or investment power with respect to the securities.Information in this table is based on our records and information provided by directors, nominees, Named Executive Officers, executiveofficers and in information filed with the SEC. Unless otherwise indicated in the footnotes and subject to community property laws whereapplicable, each of the directors and nominees, Nam ed Executive Officers and executive officers has sole voting and/or investment powerwith respect to such shares, including shares held in trust.

(2) The number of shares of common stock outstanding used in calculating the percentage for each listed person is based on 64,623,847shares of our common stock outstanding as of June 30, 2008, and also includes, with respect to each person, the shares of common stockunderlying options held by that person that were exercisable as of June 20, 2008 or within 60 days of such date, but excludes shares ofcommon stock underlying options held by any other person.

(3) Based upon a Form 3, as amended, dated as of February 19, 2007, and a Form 4, dated as of February 16, 2007, as filed with the SEC byHitachi, Ltd. reporting ownership of these shares as of those dates. This figure includes 1,010,000 shares of common stock obtainablewithin 60 days by the exercise of stock options. The address of Hitachi, Ltd. is 6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8280Japan.

(4) The address of Clarity Partners, L.P., Clarity Opnext Holdings 11, LLC and Clarity Management, L.P. is 100 North Crescent Drive,Beverly Hills, CA 90210.

(5) Based upon a Form 3 filed with the SEC on February 7, 2008, and Form 4s as filed by each of David Lee, Clarity Opnext Holdings I,LLC and Clarity Opnext Holdings 11, LLC on February 7, 2008, Clarity Partners L.P. holds 4,229,114 shares and Clarity OpnextHoldings 11, LLC holds 3,298,306 shares. These figures include 1,000,000 shares of common stock obtainable within 60 days by theexercise of stock options. Clarity GenPar, LLC is the general partner of Clarity Partners, L.P. and Clarity Partners, L.P. is the managingmember of Clarity Opnext Holdings 11, LLC. Clarity Management, LLC is the general partner of Clarity Management, L.P. (together withClarity Partners, L.P. and Clarity Opnext Holdings 11, LLC, the "Clarity Entities"). Because Dr. David Lee is a managing member ofClarity GenPar, LLC and Clarity Management, LLC, he may be deemed to be the beneficial owner of the shares held by the ClarityEntities, which he disclaims except to the extent of his pecuniary interest therein.

(6) Of the 7,500,000 shares reported as beneficially owned by Marubeni Corporation, 6,000,000 shares are owned directly by MarubeniCorporation and 1,500,000 shares are owned directly by Marubeni America Corporation, a wholly-owned subsidiary of MarubeniCorporation. The address of Marubeni Corporation is 4-2, Ohtemachi 1-Chome, Chiyoda-Ku, Tokyo, MO 100-8088 and MarubeniAmerica Corporation is 450 Lexington Avenue, 35 th Floor, New York, New York 10017.

(7) Includes 66,666 shares of common stock granted as restricted stock on November 1, 2004 9 33,333 shares of which vested on February 20,2008 and 33,333 shares of which will vest on February 20, 2009, subject to the executive's continued employment with the Company.The remaining shares consist of 5,000 shares of common stock purchased on the open market and l ,l 87,500 shares of common stockobtainable within 60 days by the exercise of stock options.

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DAVIS POLK & WARDWELLAngela T. Bellizzi450 Lexington AvenueNew York, New York 10017(212) [email protected]

Attorneys for Defendant Ilitachi,Ltd.

UNITED STATES DISTRICT COURTDISTRICT OF NEW JERSEY

IN RE OPNEXT, INC. SECURITIES Case No. 3:08-CV-920-JAP-JJHLITIGATION

CERTIFICATE OF SERVICE

ANGELA T. BELLIZZI, an attorney admitted to practice in this District, hereby certifies

that on December 22, 2008, I caused a true copy of the foregoing Notice of Motion by Defendant

Hitachi, Ltd. to Dismiss the Consolidated Class Action Complaint, Proposed Order, and

Declaration of Angela T. Bellizzi, attaching as exhibits: (a) a true and correct copy of the

Consolidated Class Action Complaint filed on July 30, 2008; (b) a true and correct copy of

excerpts from the Opnext, Inc. Prospectus (filed with the SEC pursuant to Rule 424(b)(4) on

February 16, 2007); and (c) a true and correct copy of excerpts from Opnext, Inc.'s annual report

on Form 10-K/A for fiscal year 2008 (filed with the SEC on July 29, 2008), to be served in

accordance with the New Jersey District's Rules on Electronic Service.

Dated: December 22, 2008

By: s/ Angela T. Bellizzi Angela T. Bellizzi

case 3:08-cv-00920-jap-lhg document 83 filed 12/22/2008...

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