public redacted version - class actionsecurities.stanford.edu/filings-documents/1023/... · 16. by...

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DECLARATION IN OPPOSITION TO MOTION FOR SPECIAL MASTER Master File No. C 02-1486 CW

PUBLIC REDACTED VERSION Joseph J. Tabacco, Jr. (75484) Christopher T. Heffelfinger (118058) BERMAN DeVALERIO PEASE TABACCO BURT & PUCILLO 425 California Street, Suite 2025 San Francisco, California 94104-2205 Telephone: (415) 433-3200 Facsimile: (415) 433-6382 Liaison Counsel for Lead Plaintiff Connecticut Retirement Plans and Trust Funds and Counsel for Intervenor Oklahoma Firefighters Pension and Retirement System Barbara J. Hart Jonathan M. Plasse Anthony J. Harwood Michael Stocker Jon Adams LABATON SUCHAROW & RUDOFF LLP 100 Park Avenue New York, New York 10017-5563 Telephone: (212) 907-0700 Facsimile: (212) 818-0477 Lead Counsel for Lead Plaintiff Connecticut Retirement Plans and Trust Funds

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

IN RE JDS UNIPHASE CORPORATION SECURITIES LITIGATION

) ) ) ) ) ) ) ) ) ) ) ) ) )

Master File No. C 02-1486 CW CLASS ACTION DECLARATION OF ANTHONY HARWOOD IN OPPOSITION TO THE MOTION OF THE JDS DEFENDANTS FOR A SPECIAL MASTER Date: February 21, 2005 Time: 10:00 a.m. Courtroom: Courtroom 2, 4th Floor Before: Hon. Claudia Wilken

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28DECLARATION IN OPPOSITION TO MOTION FOR SPECIAL MASTER Master File No. C 02-1486 CW

I, ANTHONY HARWOOD, declare as follows pursuant to 28 U.S.C. § 1746:

1. I am Of Counsel at the law firm of Labaton Sucharow & Rudoff LLP, Lead

Counsel for Lead Plaintiff Connecticut Retirement Plans and Trust Funds (“Connecticut”) in the

above-referenced action. I was admitted to practice law in the State of New York in 1988 and

have been admitted pro hac vice to the United States District Court for the Northern District of

California. I graduated from Fordham University School of Law in 1987 and have been

practicing business litigation ever since.

2. I respectfully submit this declaration in support of Connecticut’s Opposition to

the Motion of the JDS Defendants for a Special Master.

3. This Court has capably resolved each and every electronic discovery issue

presented before it in the course of this litigation.

4. For example, by Order September 7, 2005, this Court ordered the production of

email from numerous individuals, including Thomas Pitre (“Pitre”), the recipients of Pitre’s

August 18, 2000 email (stating “a major disconnect exists between future forecasted demand and

our growth curve”) (“Pitre email”), and the members of Redbook demand tracking team. A true

and correct copy of this Order, granting in large part Connecticut’s motion to compel, is attached

hereto as Exhibit A.

5. Subsequently, by Order dated November 10, 2005, this Court resolved and

ordered the production of email from Keith Bisbee, Kevin Kalkhoven, Anthony Muller, Jozef

Straus, Leo Lefebvre, and twenty-three other relevant individuals. A true and correct copy of

this Order is attached hereto as Exhibit B.

6. In its Order of November 10, 2005, this Court resolved the parties’ respective

motions to compel 30(b)(6) depositions, granting Connecticut’s motion to compel further

30(b)(6) deposition relating to electronic documents. (Ex. B).

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7. In its Order of November 10, 2005, this Court resolved the issue of production of

all email in native format by ordering the production of metadata for the Pitre email and by

ordering the parties to meet and confer on the production of a subset of email in native format.

(Ex. B).

8. In its Order of November 10, 2005, this Court resolved the production of

Defendants’ ERP/Oracle database by ordering the parties to meet and confer on the procedure

and timing of this production. (Ex. B).

9. The parties have also demonstrated their ability to resolve discovery issues.

10. At Defendants’ request, and notwithstanding this Court’s Order of September 7,

2005, Lead Plaintiff agreed to move production of the Redbook Team email down in the

sequence of documents to be produced by Defendants. (See relevant excerpts of November 8,

2005 Hearing Transcript, a true and correct copy of which are attached hereto as Exhibit C).

11. Notwithstanding this Court’s September 7, 2005 Order, Lead Plaintiff further

conceded and accommodated Defendants’ concerns of relevancy and costs associated with the

production of the Redbook Team email by agreeing to narrow the initial search. The parties met

and conferred on four occasions (September 12, 2005, October 4, 2005, December 8, 2005, and

January 10, 2006) on this issue and have made substantial progress towards the selection of a

small group of Redbook Team members whose email will be searched first:

(a) Attached hereto as Exhibit D is a letter, dated January 3, 2006, from me to

Terri Garland, in which Lead Counsel proposed to select a small group of Redbook team

members to sample for relevancy if Defendants (1) identify those Pitre email recipients whose

email hasn’t been produced, (2) provide their job titles and last known addresses, and (3) provide

a witness to testify on the forecasting and Redbook processes.

(b) Attached hereto as Exhibit E is a letter, dated January 20, 2006, from Terri

Garland to me, in which Defendants accepted Lead Counsel’s proposal and agreed to provide a

30(b)(6) deponent on the forecasting and Redbook processes, the recipients of the 6/30/00 Pitre

email, and those recipients’ titles and addresses.

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12. Additionally notwithstanding this Court’s November 10, 2005 Order, the parties

mutually agreed during a December 8, 2005 meet and confer to defer both 30(b)(6) depositions,

including the 30(b)(6) deposition regarding Defendants’ retention of electronic documents, in

order to focus on document production.

13. The parties mutually agreed to the production of six copies of the Pitre email in

native format. The parties further agreed that Defendants would produce various email

attachments in native format, including an Excel spreadsheet showing revenue for top JDS

customers for the Fiberoptics Product Group (JDSU0367008 - JDSU0367246) and an Excel

spreadsheet showing a 41% reduction in the Nortel Mosaic forecast through December 2000

(JDSU0347218 - JDSU0347259).

14. At Lead Plaintiff’s request, Defendants agreed and produced the Heron database

maintained by David Lightfoot and Rick MacMillan, which contained the monthly forecasts for

the Fiberoptics Product Group.

15. Defendants agreed to investigate a problem with 759 illegible documents

identified by Lead Plaintiff.

16. By the letter attached hereto as Exhibit D, dated January 3, 2006, from me to Terri

Garland, I advised Defendants (at page 5) that a large percentage of email produced in PDF

format is difficult to read and requested an explanation for its illegibility.

17. In a discussion of this issue during the January 10, 2006 meet and confer,

Defendants suggested that we provide examples of illegible documents, and I agreed to do so.

18. By the letter attached hereto as Exhibit E, dated January 20, 2006, from Terri

Garland to me, Defendants acknowledge receipt of 759 examples of illegible documents and

agree to “research that issue.”

19. Attached hereto as Exhibit F is a true and correct copy of the transcript of the

August 16, 2005 hearing before the Court on Connecticut’s motion to compel.

20. Attached hereto as Exhibit G is a true and correct copy of the joint proposed

discovery plan, submitted by the parties to the Court on October 31, 2005.

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21. Attached hereto as Exhibit H is a true and correct copy of the discovery plan

entered by the Court, by Order dated November 10, 2005.

22. Attached hereto as Exhibit I is a true and correct copy of charts showing revenue

corresponding to top customers, based on the documents designated by Bates numbers JDSU

0022833 – 0022848 and JDSU 0022660 – 0022672.

23. Attached hereto as Exhibit J is a true and correct copy of the document designated

by Bates number JDSU 0032844.

24. Attached hereto as Exhibit K is a true and correct copy of the document

designated by Bates number JDSU 0530150.

25. Attached hereto as Exhibit L is a true and correct copy of the documents

designated by Bates numbers JDSU 0749618 – 0749620.

26. Attached hereto as Exhibit M is a true and correct copy of the document


27. Attached hereto as Exhibit N is a true and correct copy of the document


28. Attached hereto as Exhibit O is a true and correct copy of the document


29. Attached hereto as Exhibit P is a true and correct copy of the document


30. Attached hereto as Exhibit Q is a true and correct copy of the documents


31. Attached hereto as Exhibit R is a true and correct copy of the documents


32. Attached hereto as Exhibit S is a true and correct copy of the documents


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33. Attached hereto as Exhibit T is a true and correct copy of charts showing insider

selling for the Individual Defendants: Kevin Kalkhoven, Jozef Straus, Anthony (Tony) Muller,

and Charles Abbe.

34. Attached hereto as Exhibit U is a true and correct copy of the August 18, 2000

email from Thomas Pitre, “Manager, Demand Management”.

35. Attached hereto as Exhibit V is a true and correct copy of the Court’s Order

granting Lead Plaintiff’s Motion for Letters Rogatory to depose Thomas Pitre in Canada.

36. Attached hereto as Exhibit W is a true and correct copy of the Court’s Order of

January 6, 2005, denying Defendants’ Motions to Dismiss.

37. Attached hereto as Exhibit X is a true and correct copy of the documents

designated by Bates numbers JDSU 0032996 and 0929747.

I declare under penalty of perjury that the foregoing is true and correct. Executed at New

York, New York on January 31, 2006.

/S/ ANTHONY HARWOOD Anthony Harwood

EXHIBIT G

Case 4:02-cu-01486 Document 394 Filed 10/31/2005 Page 1 of 2 5

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[COUNSEL LISTED ON SIGNATURE PAGES ]



OAKLAND DIVISION

In re JDS UNIPHASE CORPORATIONSECURITIES LITIGATION,

Master File No. C-02-1486 CW (EDL)

JOINT DISCOVERY PLAN

This Document Relates to : All Actions

JOINT DISCOVERY PLANMASTER FILE NO . C-02-1486 CW (EDL)sf-2026333

Case 4 :02-cv-01486 Document 394 Filed 10/31/2005 Page 2 of 25

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Pursuant to the Court's October 11, 2005 Order, Lead Plaintiff and the JDSU Defendant s

11 submit the following Joint Discovery Plan .

1 . COMPLETION OF PRODUCTION IN RESPONSE TO LEAD PLAINTIFF'SFIRST REQUEST FOR PRODUCTION OF DOCUMENTS

A. Lead Plaintiff's Proposed Schedule

1 . Pursuant to this Court's Order of September 7, 2005 ("the Order"), and in response

to the JDSU Defendants' request for a sequenced production schedule, the JDSU Defendants will

complete their production of documents in response to Lead Plaintiff's First Document Request

on or before January 31, 2006 on the following schedule .

a. By October 19, 2005, the JDSU Defendants will complete the productionof email to and from the recipients of Thomas Pitre's email date dAugust 18, 2000 .

b. By November 15, 2005, the JDSU Defendants will produce, as per theOrder :

i . documents concerning stock purchases during the Class Period andany reasons for such purchases by Bruce Day, Robert Enos, andCasimir Skrzypczak; and

ii . all contact information that the JDSU Defendants have in an"accessible electronic format for all persons they can readilyidentify as former finance or accounting employees . "

c. By November 15, 2005 , the JDSU Defendants will complete theproduction of all email in the files of Charles Abbe, Keith Bisbee, ZitaCobb, Harry Deffebach, Joseph Ip , Kevin Kalkhoven , Fred Leonberger,Anthony Muller, Danny Pettit, and Jozef Straus . The JDSU Defendantswill produce this email on a rolling basis as soon as it is available prior toNovember 15, 2005.

d. By November 15, 2005, counsel will meet and confer, as per the Order,regarding:

i . a procedure for sampling documents from the time period followingthe Class Period;

ii . more narrowly tailored requests for the production of personnelfiles ;

iii . the production of documents in response to Requests 33 and 35 ;

iv, procedures for identifying additional former finance employees, i naddition to those identified in subparagraph (b)(ii) above, whoseinformation is not readily accessible ; and

JOINT DISCOVERY PLA NMASTER FILE NO . c-02-1486 CW (EDL)sf-2026333

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Case 4:02-cv-01486 Document 394 Filed 10/31/2005 Page 3 of 25

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v. the production of exit interview memos from former finance oraccounting employees .

e . By November 22, 2005, counsel will meet and confer regardin g

i. the procedure and timing of the production of data from JDSU'sEnterprise Resource Planning databases ;

ii . the production of all paper and electronic documents , includingemail from backup tapes and active mail boxes, in the files of theRedbook team ;

iii. the timing of the production of diaries, appointment calendars andtelephone logs as directed in the Court's Order of September 7,2005 ; and

iv. the sequencing and timing of the JDSU Defendants' remainingproduction.

f. By December 2, the JDSU Defendants shall complete the production ofemail from the files of the following individuals :

Don Bossi ; Jeff Chase; Dan Clayton; Ken Crawford; Kerry Dehority; RickFieber ; Steve Fife ; Dave Fox ; John Gordon; David King; Leo Lefebvre ;Peter Moore ; Steve Moore; Michael Phillips ; Shelly Pietrusiak; CharlesRagussa; Maurice Taveres ; and Yves Tremblay .

2 . By November 15, 2005, JDSU shall allow Lead Plaintiffs electronic discover y

expert to inspect JDSU's Enterprise Resource Planning databases. JDSU shall provide a

technologist with high level administrator access to all the database systems, who can

demonstrate the types of reports that the database can generate, the types of searches it can

execute and the types of access logs that the database systems maintain .

3 . During the week of December 5, 2005, JDSU shall make available for deposition,

pursuant to rule 30(b)(6), in San Francisco, on consecutive days, witnesses knowledgeable abou t

the following :

a. how the company integrated electronic data from its various sites intocompany-wide reports ;

b. the types of electronic data and paper records that exist at three sites,Bloomfield, West Trenton and Horsham, where events at the heart of thealleged fraud occurred, and the steps JDSU took to preserve those recordsand produce them in this litigation ;

c. JDS's company-wide efforts to preserve of paper and electronic recordsand the production of those records in response to document demands inthis litigation .


MASTER FILE NO . C-02-1486 CW (EDL)sf-2026333

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Case 4 :02-cv-01486 Document 394 Filed 10/31/2005 Page 4 of 2 5

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B. Statement in Support of Lead Plaintiff's Proposed Schedul e

Lead Plaintiff has taken seriously on Your Honor's admonition to the parties during th e

hearing on October 11 to make more of an effort to resolve their discovery disputes without

intervention of the Court . Accordingly, Lead Plaintiff has tried to strike a middle ground,

accepting many of the proposals that the JDS Defendants have made when counsel met and

conferred and in correspondence . Lead Plaintiff has done so, accepting additional delay in the

process, to reduce the burden on the Court, which has devoted substantial effort to resolving

discovery disputes, and to avoid a reference to a special master, which would only further delay

discovery .

Although the parties have been able to reach agreement on much of the discovery

schedule, the proposal of the JDSU defendants would prevent Lead Plaintiff from receiving, prior

to mediation, core documents from the critical time period that this Court previously held to be

relevant in its Order of September 7, 2005 . The JDSU Defendants ask this Court to allow them to

delay, until after the parties complete their mediation in late November, the production of

documents relating to the crucial period from September 2000 through July 2001 . During this

period, the Defendants misrepresented demand and hid rising inventory, allowing them to profit

from the inflated price of JDS's stock by engaging in massive insider selling and, in February

2001, to swindle the shareholders into approving a blockbuster merger with SDLI under false

pretenses . This period encompasses JDSU's third and fourth fiscal quarters, at which time

demand for JDSU's products fell well short of its projected growth curve, as Thomas Pitre

accurately reported would come to pass in his email of August 18, 2000 . It is extremely

important for Lead Plaintiff to receive documents through the end of the Class Period, which

closed when JDSU announced a massive write-down of billions of dollars of goodwill . Lead

Plaintiff must have these documents if the mediation is to have any chance of success .

The JDSU Defendants also attempt to reargue this Court 's Order, insofar as it granted

production of basic contact information about important witnesses . Moreover, they continue t o

use the meet and confer process to foster unreasonable delay, refusing even to discuss unti l



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11 December the timing of the future production of documents that this Court long ago directed b e

11 produced in its Order of September 7 .

Nonetheless, there are several areas of agreement. Lead Plaintiff discusses the areas of

agreement and disagreement in the same order as they appear in the proposed discovery schedule

above .

1(a) . Email to and from the Pitre Email Recipients

Defendant has advised that it has completed the production of email to and from thos e

persons who received Thomas Pitre's August 18, 2000 email, with the caveat that the productio n

does not include the email accounts of employees who left the Company before this action wa s

filed or who did not work at the Ottawa facility . Lead Plaintiff does not at this time have any

objection to this, but reserves the right to seek the email of those additional employees should

discovery in the ease show that an additional search for those emails is merited .

1(b) . Documents Concerning Stock Purchases and Contact Information

(i) The parties have agreed that the JDS Defendants will produce th e

documents regarding stock purchases as provided in paragraph 1(b)(i) .

(ii) The JDSU Defendants have refused to produce by November 15, 2005 ,

contact information for finance employees that is available in accessible electronic format .

Instead, they have proposed a cumbersome and time consuming procedure by which the

employees would receive notice of the request for their contact information after the mediation ,

which takes place at the end of November, and then have 21 days to object, after which

presumably motion practice would ensue . There is no justification for this delay. The

information is clearly relevant under Fed.R.Civ.P . 26(b)(1) as it relates to the identity and

location of persons with relevant knowledge . Moreover, the JDS Defendants already argued this

point and lost, as reflected in the Court's Order of September 7 requiring the production of this

basic information . Moreover, there is a confidentiality order in place under which the JDS

Defendants can designate this material confidential, thereby adequately protecting the privac y

rights of their current and former employees .


MASTERFILENO, c-02-1486 CW(EDL)

sf-2026333

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1(c) . Documents that the JDSU Defendants describe as "core documents "

Lead Plaintiff has accepted the proposal of the JDSU defendants to produce certain email s

they have described as "core documents" before producing email to and from the Redbook team .

The JDSU Defendants had previously proposed a "mid-November" date for production of core

documents in a letter dated October 5, 2005 . Now, the JDSU defendants have backed away from

that date, claiming that they underestimated the burden, and have refused to commit to a

completion date .

In deference to the claim of burden, Lead Plaintiff has proposed that the JDSU Defendant s

produce the core documents in two waves . The first wave will be due on November 15, and will

consist of the emails in the accounts of the individual defendants and other officers who sold

substantial amounts of stock during the Class Period. It will also include email in the account of

Keith Bisbee, who to Lead Plaintiff's knowledge did not sell a significant amount of JDS stock

during the class period, but who was involved in company-wide forecasting according to counsel

for the JDSU Defendants . Under this compromise, the JDSU Defendants will be producing

roughly half of the amount of email they had originally promised to produce by mid-November .

Lead Plaintiff has further compromised by scheduling the production of Michael Phillips's email

for the second wave, even though he sold a substantial amount of stock during the Class Period

while he was General Counsel and Executive Vice President for Business Development . Lead

Plaintiff recognizes that his email will require careful review for privileged material .

It is important that Lead Plaintiff receive this first wave of production by November 15 so

that it will have the opportunity to review it and incorporate it into its mediation presentation .

The mediation brief is due on November 19 and the mediation session is on November 28 .

Therefore, it would not be practical to delay this further . Lead Plaintiff urges the JDS Defendants

to begin work on producing this email now, if they have not done so already, and to produce it on

a rolling basis to the extent it is available prior to November 15, so that it will be available in time

for Lead Plaintiff to evaluate at least some of it prior to the submission of its mediation brief .

The second wave will be due on December 2, 2005, which is six weeks from the date o f

this submission. Lead Plaintiff has chosen this date based on the experience of the parties to dat e

JOINT DISCOVERY PLANMASTER FILE NO . c-02-1486 CW (EDL)sf-2026333

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11 with the production of the email to and from the Pitre email recipients . That email, which

encompassed email accounts of a larger group of individuals, was produced in a six week period.

The JDSU Defendants have refused to agree to a deadline to complete the production of

these core documents. Although we recognize that it can be difficult to estimate the completion

date with complete accuracy, the JDSU Defendants have sufficient experience with th e

production of large volumes of email in this case to agree to a date for production . If that dat e

proves unworkable, they can seek to modify it by so ordered stipulation, or failing that, by

motion . Allowing the JDSU Defendants to proceed without a reasonable deadline is simply an

invitation to further delay .

The JDSU Defendants also seek to be excused from producing prior to the mediation core

documents for the period after August 2000 . As explained above, that excludes the critical

portion of the class period, and would severely prejudice Lead Plaintiff in preparing for the

mediation .

Finally, the JDSU Defendants seek to be excused from searching back-up tapes of email

for this core group of individuals . Lead Plaintiff is concerned that there is some evidence of

spoliation that would justify the search of back-up tapes, but agrees to defer the issue until later in

discovery .

1(d). Other Documents that the Court Ordered the JDSU Defendantsto Produce

The only issue the pa rt ies dispute with respect to the documents described in this

paragraph is when counsel should meet and confer to schedule the remaining production . The

JDSU Defendants want to delay those meetings until the second or third weeks of December

because the information will not be produced for the mediation . That is an unreasonable delay .

The parties should meet as soon as reasonably possible, but no later than November 15, to

schedule the remaining production so that any disputes can be resolved promptly .

The JDSU Defendants have offered to produce documents relating to orders in Ottawa

during the week of November 14, 2005 . Lead Plaintiff agrees to this, with the proviso that if the

JOINT DISCOVERY PLANMASTER FILE NO . c-02-14$6 CW (EDL)sf-2026333

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volume of documents is sufficiently large, the documents be made available again on a mutually

agreeable date .

2-3 . Inspection of computer systems and depositions- under Rule 30(b)(6)

These two issues are the subject of Lead Plaintiff's motion to compel, which is to be hear d

contemporaneously with the discovery conference on this p roposed plan. Lead Plaintiff's reasons

for seeking that discovery are described in the motion papers .

C. The JDSU Defendants ' Proposed Schedul e

The JDSU Defendants set forth below (1) an overview of their proposal ; (2) specific

responses to Lead Plaintiff's proposal ; and (3) a discussion of the use of electronic search terms .

Overview

On July 15, 2005, Judge Wilken ordered the pa rties to pursue mediation . Accordingly, the

parties have agreed to a mediation session before the Hon . Daniel Weinstein (Ret .) on

November 29, 2005 . In light of the upcoming mediation session, the JDSU Defendants propose

that the next phase of their production should focus on materials that would prove helpful to th e

mediation .

Although the JDSU Defendants agree that some of the information that Lead Plaintiff

seeks before the mediation will help to evaluate the parties' claims and defenses, many items o n

Lead Plaintiffs proposed schedule will not serve that purpose . For example, Lead Plaintiff

proposes that by November 15, 2005, the parties should meet and confer regarding sampling

documents from the period following the Class Period. Preparing for that task would requir e

significant analysis by the parties, yet it would not provide any useful information before the

Court-ordered mediation .

Perhaps the most helpful and accessible documents are JDSU auditors' workpapers . Lead

Plaintiff subpoenaed the workpapers many months ago, yet Ernst & Young has not produced

them. The JDSU Defendants have repeatedly urged Lead Plaintiff to pursue the subpoena, a s

obtaining the workpapers before the mediation is very important . Lead Plaintiff should take the

actions necessary to receive the Ernst & Young workpapers . The JDSU Defendants do no t

understand the delay .



81


1 As the Court is well aware, over the course of the last months JDSU has expended

2 considerable effort reviewing and producing emails from the Pitre email recipients . The

3 collection and review process has been costly, time-consuming, and wasteful, and the relative size

4 of the production is small compared to the number of documents that JDSU collected and

5 reviewed. Specifically, there were relatively few documents concerning demand, sales, o r

6 inventory at Company-wide levels . This is the case even though JDSU took a broad and inclusive

7 view in determining responsiveness .

8 JDSU has informed Lead Plaintiff on many occasions that Mr . Pitre was not involved in

9 forecasting Company-wide demand, and instead was tasked with supply-chain planning . In

10 addition, none of the Pitre email recipients belonged to the Company's senior management team.

11 To make the most productive use of the parties' time and resources, the JDSU Defendants

12 propose to focus the next phase of discovery on core information needed to evaluate the parties'

13 claims and defenses. Lead Plaintiff alleges that the JDSU Defendants (1) misrepresented demand

14 for the Company's products ; (2) overstated the value of the Company's goodwill and inventory;

15 and (3) recognized revenue improperly . As set forth below, to address those claims the JDSU

16 Defendants propose to focus on: the particular types of documents most likely to contain relevant

17 information; documents from spring and summer 2000; and specific sources most likely to

18 contain relevant types of documents .

19 a. Types of Documents

20 JDSU proposes that the parties focus on :

21 1. Company-wide demand forecasts and financial performance ;

22 2. documents concerning JDSU's valuation of goodwill recorded in connection with

23 its acquisitions ;

24 3. documents showing that the SEC was aware of and did not dispute JDSU's

25 treatment of goodwill ;

26 4. documents from the email accounts of the Individual Defendants ;

27 5. management letters from the Company's outside auditors showing that they signed

28 off on the Company's financial statements ;

JOINT DISCOVERY PLAN 9MASTER FILE NO, c-02-1486 CW (EDL)

sf-2026333

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6 . documents sufficient to show JDSU' s processes regarding consignment inventory ;

II and

7. documents sufficient to show that JDSU expanded its facilities and headcoun t

11 through at least the end of 2000 .

b. Time Period

The Complaint alleges that in spring and summer 2000, demand for JDSU's products fell,

and that JDSU failed to publicly disclose that decline . (Cmplt . ¶' 12, 14, 16-18) The

Complaint's so-called "cornerstone" is from August 2000 : Thomas Pitre's August 18, 2000

email . Similarly, in opposing the JDSU Defendants' motion to dismiss, Lead Plaintiff stresse d

purported reductions in demand in the May through August 2000 time period . Therefore, the

JDSU Defendants have proposed focusing on the spring and summer 2000 time period in their

review of documents before the Court-ordered mediation .

Now that the JDSU Defendants have suggested focusing on documents from spring to

summer 2000 - as alleged in the Complaint - Lead Plaintiff has changed its story and argues

that September 2000 through July 2001, is the "critical time period ." That is simply not borne out

in the Complaint .

Accordingly, JDSU proposes that, where possible, it will locate and produce the core

documents referenced above for the March through August, 2000 time period . '

C . Source of Documents

In a previous effort to meet and confer regarding the sequencing of discovery, JDSU

provided Lead Plaintiff with a list of names of employees and former employees that it suggested

would be most likely to possess documents relating to core issues . Lead Plaintiff's proposal

largely adopts that list in Section if and le, above. Subject to the constraints discussed below,

1 Electronic data can typically be sorted using date fields . For paper documents, theability to sort by time period depends on how the documents are maintained . In some instances,paper documents can be sorted by date without significant effort ; in other instances, that will notbe possible .

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JDSU agrees that the next phase of document production should focus on persons contained on

that list . 2

The JDSU Defendants ' Specific Responses to Lead Plaintiffs Proposals

la. By October 19, 2005, the JDSU Defendants will complete the productionof email to and from the recipients of Thomas Pitre's email dated August18, 2000 .

Response :

On October 19, 2005, JDSU completed its production from the email accounts of th e

recipients of Thomas Pitre's August 18, 2000 email who were employed at JDSU Ottawa at th e

time this lawsuit was filed. JDSU's production consisted of more than 835 , 000 pages . 3

JDSU agreed to provide Lead Plaintiff with a privilege log within thirty days . JDSU also

agreed to produce any non-privileged documents that may have been withheld for privileg e

within 30 days .

lb. By November 15, 2005, the JDSU Defendants will produce, as per theOrder :

documents concerning stock purchases during the Class Period andany reasons for such purchases by Bruce Day, Robert Enos, andCasimir Skrzypczak

Response : The JDSU Defendants agree to produce any non-privileged, responsive

documents in its possession by November 15, 2005 .

ii . all contact information that the JDSU Defendants have in an"accessible electronic format for all persons they can readilyidentify as former finance or accounting employees . "

Response : This Request seeks personal information relating to JDSU's forme r

employees . The JDSU Defendants believe that those former employees are entitled to notice an d

2 Although Lead Plaintiff states that it is "concerned that there is some evidence ofspoliation that would justify the search of back-up tapes," it offers no facts to support that claim .

3 JDSU' s production does not include the email accounts of employees who left theCompany before this action was filed , as those accounts were no longer active at the time. Inaddition, JDSU has determined that one employee who worked at a facility other than O ttawareceived the August 18, 2000 email . JDSU's production to date does not include the account ofthat employee , as it was not found on Ottawa back-up tapes .


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an opportunity to object to the disclosure of their personal information. Lead Plaintiffs proposed

deadline does not leave adequate time to provide those former employees with notice . In this

litigation, persons acting on behalf of Lead Plaintiff have made multiple, persistent efforts to

speak with former JDSU employees although some of those employees have had no interest in

speaking with Lead Plaintiff. In other instances, counsel for Lead Plaintiff has contacted non-

parties -who were represented by counsel and who had already filed written objections -

threatening sanctions . A notice period is a reasonable and routine procedure in any case;

however, due to the issues that have arisen with respect to JDSU's former employees in this case,

the procedure has a heightened importance .

In addition, production of this information is unlikely to result in work product that can b e

used in the mediation . Lead Plaintiff fails to offer any explanation for why this task must be

completed pre-mediation .

For those reasons, after the mediation, the JDSU Defendants propose to send a notice o f

intent to disclose contact information to the affected former employees . The JDSU Defendants

propose that those former employees should have 21 days to notify the Court of any objections to

the disclosure. JDSU will draft a proposed form of notice and provide it to Lead Plaintiff for

review and comment .

Ic. By November 15, 2005, the JDSU Defendants will complete theproduction of all email in the files of the following individuals : CharlesAbbe, Keith Bisbee, Zita Cobb, Harry Deffebach, Joseph Ip, KevinKalkhoven, Fred Leonberger, Anthony Muller, Danny Pettit, and JozefStraus. The JDSU Defendants will produce this email on a rolling basis assoon as it is available prior to November 15, 2005 .

Response : As noted above, in the initial draft of this Joint Discovery Plan, Lead Plaintiff

adopted the JDSU Defendants ' proposed list of relevant files to search . Now, however, Lead

Plaintiff has inexplicably deferred the production date for many of the persons with files most

likely to contain core documents until several days after the mediation . (See Section If) Lead

Plaintiff also added five additional names with no explanation of how those former employees'

files would advance the mediation . Those persons worked at JDSU offices in Santa Rosa,

Ottawa, Florida , and Connecticut .

JOINT DiscovERY PLANMASTER FILE NO. C-02-1486 cw (EDL)sf-2026333

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While the JDSU Defendants do not object to searching those persons ' files in principle,

the time that will be needed to locate and access their email accounts , and review their email, will

not allow for a complete production pre-mediation . The JDSU Defendants estimate that those

nine custodians selected by Lead Plaintiff will have well over one million pages of email . The

JDSU Defendants cannot predict the completion date with certainty, but they will commit to

maintaining a team of 20-30 document reviewers assigned to this task .

1 d . By November 15, 2005, counsel will meet and confer, as per the Order,regarding :

a procedure for sampling documents from the time period followingthe Class Period

Response : The JDSU Defendants disagree with the timing of Lead Plaintiff's schedul e

for meeting and conferring. Although Lead Plaintiff proposes that the issue be discussed b y

November 15, 2005, that topic is not related to the parties ' November 29, 2005 Court- ordered

mediation, nor will it affect the parties' mediation statements, which are due on November 18,

2005 . Accordingly, the JDSU Defendants propose that the parties meet and confer regarding that

topic between December 5 and December 16, 2005 .

ii . more narrowly tailored requests for the production of personnelfiles

Response : As this topic also is not related to the parties' November 29, 2005 Court-

ordered mediation, the JDSU Defendants propose that the parties meet and confer regarding the

topic between December 5, and December 16, 2005 .

iii . the production of documents in response to Requests 33 and 35

Response : With regard to the production of documents sought in response t o

Request Nos . 33 and 35 (seeking documents concerning "any cancellation, reduction, delay, or

modification" of orders that in the aggregate are worth more than $1 million), the JDSU

Defendants have repeatedly suggested that Lead Plaintiff limit its request to documents that on

their face reflect cancelled, delayed, or modified orders over $1 million . Lead Plaintiff ha s

refused to narrow its demand. Therefore, during the week of November 14, 2005, the JDSU

Defendants will make documents available for inspection at the Company's off-site storage

JoTNT DISCOVERY PLANMASTER FILE NO . c-02-1486 CW (EDL)sf-2026333

131


1 facility in Ottawa, Canada that may relate to cancellation, reduction, delay, or modification of

2 orders greater than $ I million. Those documents, referred to as "travelers" by the Company,

3 track each product made at JDSU and contain information regarding its manufacturing, sale ,

4 return, and reconditioning . If after reviewing those documents Lead Plaintiff has any remaining

5 concerns, the parties should meet and confer after the mediation .

6 iv. procedures for identifying additional former finance employees, inaddition to those identified in subparagraph (b)(ii) above, whose

7 information is not readily accessible

8 Response : As this topic also is not related to the parties' November 29, 2005 Court-

9 ordered mediation, the JDSU Defendants propose that the parties meet and confer regarding the

10 topic between December 5 and December 16, 2005 .

11 v. the production of exit interview memos from former finance or12 accounting employees

Response : As this topic also is not related to the parties' November 29, 2005 Court-13

ordered mediation, the JDSU Defendants propose that the parties meet and confer regarding the14

topic between December 5 and December 16, 2005 .1 5

16 1 e. By November 22, 2005, counsel will meet and confer regardin g

i. the procedure and timing of the production of data from JDSU's17 Enterprise Resource Planning database s



20 topic between December 5 and December 16, 2005 .

21 ii, the production of all paper and electronic documents, includingemail from backup tapes and active mail boxes, in the fi les of the

22 Redbook team



25 topic between December 5 and December 16, 2005 . 4

264 Lead Plaintiff's proposal specifically seeks email from "back-up tapes ." While the

27 JDSU Defendants volunteered to restore certain back-up tapes created soon after the filing of theComplaint, the JDSU Defendants do not agree to restore - and should not be required t o

28 restore - additional back-up tapes .

JOINT DISCOVERY PLAN 14

"ASTER FILE NO , c-02-1486 CW (EDL)

sf-2026333

Case 4 :02-cv-01486 Document 394 Filed 10131/2005 Page 15 of 2 5

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iii, the timing of the production of diaries, appointment calendars andtelephone logs as directed in the Court's Order of September 7,200 5


ordered mediation, the JDSU Defendants propose that the parties meet and confer regarding the


iv. the sequencing and timing of the JDSU Defendants' remainingproduction


ordered mediation, the JDSU Defendants propose that the parties meet and confer regarding th e


If. By December 2, the JDSU Defendants shall complete the production ofemail from the files of the following individuals :

Don Bossi ; Jeff Chase; Dan Clayton; Ken Crawford; Kerry Dehority ; RickFieber ; Steve Fife ; Dave Fox ; John Gordon ; David King; Leo Lefebvre ;Peter Moore ; Steve Moore; Michael Phillips ; Shelly Pietrusiak; CharlesRagussa; Maurice Taveres ; and Yves Tremblay .

Response : As discussed above, the majority of these persons were proposed by the JDSU

Defendants as likely to possess core documents that would be relevant for the November 29, 2005

mediation . Many of these persons have files that must be produced before the mediation, as their

fi les contain documents relating to demand forecasting, company -wide financials, and other core

issues .

Lead Plaintiffs division of documents into two categories, i .e ., files to be produced b y

November 15 (in Section lc, above) and files to be produced three days after the mediation

(Section If) is artificial, and would prevent JDSU from producing the necessary documents

before the mediation. Moreover, although Lead Plaintiff only seeks emails from these

individuals, the JDSU Defendants believe that certain core documents are in paper files .

Accordingly, the JDSU Defendants intend to continue their review of these persons' files and to

produce information from the key spring and summer 2000 time period before the mediation . As

stated above, the JDSU Defendants will maintain a team of 20-30 document reviewers for this

task.


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2. By November 15, 2005, JDSU shall allow Lead Plaintiffs electronicdiscovery expert to inspect JDSU's Enterprise Resource Planningdatabases. JDSU shall provide a technologist with high level administratoraccess to all the database systems, who can demonstrate the types ofreports that the database can generate, the types of searches it can executeand the types of access logs that the database systems maintain .

Response :

The JDSU Defendants have addressed this issue in their Opposition to Motion to Compel ,

filed October 26, 2005, and respectfully request that the Court refer to that brief.

3 . During the week of December 5, 2005, JDSU shall make available fordeposition, pursuant to rule 30(b)(6), in San Francisco, on consecutivedays, witnesses knowledgeable about the following :

a. how the company integrated electronic data from its various sites intocompany-wide reports ;

b . the types of electronic data and paper records that exist at three sites,Bloomfield, West Trenton and Horsham, where events at the heart of thealleged fraud occurred, and the steps JDSU took to preserve those recordsand produce them in this litigation ;

c . JDS's company-wide efforts to preserve of paper and electronic recordsand the production of those records in response to document demands inthis litigation.

Response :

The JDSU Defendants have addressed this issue in their Opposition to Motion to Compel,

filed October 26, 2005, and respectfully request that the Court refer to that brief.

Electronic Search Terms

As discussed at the October 11, 2005 hearing, the parties have not agreed on the use o f

electronic search terms .

Lead Plaintiff seeks to require the manual review of every page of every electronic

document to determine responsiveness . The JDSU Defendants seek to winnow their review of

nonresponsive email by using electronic search terms . 5

At the October 11, 2005 hearing, Lead Plaintiff argued that the use of search terms may

exclude responsive documents . As an example, Lead Plaintiff indicated that if it had not been

5 The JDSU Defendants' list of search terms is attached as Exhibit A .

JOINT DISCOVERY PLAN 16MASTER FILE NO , c-02-1486 cw (EDL)sf-2026333


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aware of the August 18, 2000 Pitre email, it would not have known of the importance of the

words "disconnect" and "delta ." The JDSU Defendants believe that Lead Plaintiffs position is

wrong and words such as "disconnect" and "delta" add limited value to the list, as those words

would rarely be found absent other words already contained on JDSU's list of search terms . For

instance, the Pitre email would have had "hits" on eight different search terms : Redbook;

demand; forecasting ; forecast ; Nortel ; Lucent; capacity ; and backlog .

The parties appear to have reached an impasse regarding electronic search terms and w e

request the Court's guidance on how to resolve this issue at the November 8, 2005 hearing .

if . JDSU'S DISCOVERY DIRECTED TO THE REPRESENTATIVE PLAINTIFF S

The JDSU Defendants believe that many of Lead Plaintiffs discovery responses are

inadequate.6 The JDSU Defendants therefore propose the following schedule for addressin g

outstanding issues with respect to requests for production, interrogatories, and certain depositions :

A. By November 15, 2005, Lead Plaintiff shall amend its response to Interrogatory

No. 25, regarding its communications with the confidential witnesses cited in the Complaint, to

conform with the Court's Order compelling Lead Plaintiff to produce a privilege log, as well as

copies of certain communications with confidential witnesses . Although Lead Plaintiff has now

produced certain documents in response to this Interrogatory, the Interrogatory seeks all

"communications," including oral communications, and is not limited to documents . Moreover,

the Interrogatory response must be amended to remove the assertion of privilege.

B. Also by November 15, 2005, the parties shall meet and confer regarding :

i . Lead Plaintiff's response to JDSU's Request for Production 49, whic h

requests documents suppo rting Lead Plaintiff 's assertion that Defendants made the statements

that Lead Plaintiff challenges .

6 Although the JDSU Defendants believe that certain discovery responses provided by theother representative plaintiffs are insufficient, those plaintiffs are not parties to this DiscoveryPlan. Accordingly, JDSU limits its discussion to discovery issues involving Lead Plaintiff .

JOINT DISCOVERY PLANMASTER F ILE NO . c-02-1486 CW (EnL)sf-2026333

171

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ii . Lead Plaintiff's response to JDSU's Request for Production 12, which

requests documents showing Lead Plaintiff's research, investigation, or due diligence regarding

the allegations of the Complaint .

iii . Lead Plaintiff's response to JDSU's Request for Production 18, which

requests documents regarding damages calculations .

iv. Lead Plaintiff's response to JDSU's Interrogatory 17, which request s

documents regarding Plaintiff's communications with class members .

v. Lead Plaintiff's response to JDSU's Interrogatory 29, which calls for

information showing that the Individual Defendants made the statements attributed to them in the

Complaint .

vi. Lead Plaintiffs responses to JDSU' s Interrogatories 30 and 31, which

request information support ing the allegations in the Complaint regarding the Pitre email and the

Redbook .

vii . Testimony concerning the basis for Catherine E . LaMarr's verification of

her responses to Defendants' Interrogatories .

C . Remaining issues with respect to Lead Plaintiff's discovery responses, and

discovery responses by other representative plaintiffs, may be addressed in a timely manner after

the November 18, 2005 hearing on class certification .

III. LEAD PLAINTIFF' S RESPONSE TO JDSU'S PROPOSED DISCOVERY OFLEAD PLAINTIFF

A. Interrogatory 25

Lead Plaintiff has already produced and identified the documents that the Court ordered

Lead Plaintiff to produce . This satisfies Lead Plaintiff's obligation to answer the interrogatory

under Rule 33(d) .

111

111

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JorNT DISCOVERY PLANMASTER FILE NO. C-02 - 1486 CW (EDL)sf-20263 33

181


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B.-C. Remaining Discovery

Lead Plaintiff agrees to meet and confer as the JDSU Defendants have proposed .

Dated: October 31, 2005MELVIN R. GOLDMANJORDAN ETHTERRI GARLANDPHILIP T. BESIROFMORRISON & FOERSTER LLP425 Market Stree tSan Francisco, CA 94105-2482Telephone: (415) 268-7000Facsimile : (415) 268-7522

By : Isl Philip T. BesirofPhilip T. Besirof

Attorneys for DefendantsJDS Uniphase Corporation,Charles J. Abbe, Jozef Straus, and AnthonyMuller



191


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Dated: October 31, 2005JOSEPH T. TABACCO, JR .CHRISTOPHER T. HEFFELFINGERBERMAN DeVALERIO PEASE

TABACCO BURT & PUCILLO425 California StreetSan Francisco , CA 94104-2205Telephone: (415) 433-3200Facsimile : (415) 433-6382

JONATHAN M . PLASSEBARBARA J. HARTANTHONY J . HARWOODLISA BUCKSER-SCHULZMICHAEL W. STOCKERJON ADAM SLABATON SUCHAROW & RUDOFF LLP100 Park Avenu eNew York, NY 10017-5563Telephone: (212) 907-0700Facsimile : (212) 818-047 7

By : Is/ Anthony J. HarwoodAnthony J. Harwood

Counsel for Lead PlaintiffConnecticut Retirement Plansand Trust Funds

GENERAL ORDER 45 ATTESTATION

I, Philip T . Besirof, am the ECF User whose ID and password are being used to file

the Joint Discovery Plan . In compliance with General Order 45, I hereby attest that Anthony

J. Harwood has concurred in this filing .

JOINT DISCOVERY PLANMASTER FILE NO. G02-1486 CW (EDL)sf-2026333

201


EXHIBIT A

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4xABN AMROAccountantAccountingAcquisition*Actual incomeActual salesAddeccoAdeccoADVAAgereAgilentAlcatelAnalystAsset acquisitio nAssume riskAttachment AAudit*B of ABack dateBack datedBackdatingBacklogBanc of AmericaBank of AmericaBilling postponementBlock*BoardBofABrioBuild planBuild-outBuildup of inventoryBuild-up of inventoryBuy backBuy extraBuy inventoryBuybackCancel order .CancellationCancelled orderCancelled ordersCapacityCarrying ValueChange deliveryChange orderChange ordersChanged deliveryChanged orderChanged ordersChanging orderChannel stuffChannel stuffed

JonNT DISCOVERY PLANMASTER FILE NO . c-02-1486 cwsf-2026333

Channel stuffingChardonnayCIBCCIENACiscoCitigroupConcession*Consign*Constrain*ContractionComingCorroded modulatorsCorrosionCost savingCost savingsCredit Suisse First BostonCS First BostonCSFBCustomer acceptanceCustomer cancellationsCustomer orderCustomer ordersCustomer supportCut shiftsCut staffCutting shiftsCutting staffDecline in growthDecline in ordersDecline in salesDecline marketDeclined salesDeclining growthDeclining in marketDeclining salesDecrease in growthDecrease in marketDecrease in ordersDecrease in salesDecreased growthDecreased marketDecreased ordersDecreased salesDecreasing growthDecreasing marketDecreasing ordersDecreasing salesDefective productsDefer orde rDefer paymentDefer saleDefer shipmentDeferred order

Deferred paymentDeferred saleDeferred shipmentDeferring orderDeferring paymentDeferring saleDeferring shipmentDefers orderDefers paymentDefers saleDefers shipmentDelay ordersDelay paymentDelay paymentsDelay saleDelay salesDelay shipmentDelay shipmentsDelayed orderDelayed ordersDelayed paymentDelayed paymentsDelayed saleDelayed salesDelayed shipmentDelayed shipmentsDelaying orderDelaying ordersDelaying paymentDelaying paymentsDelaying saleDelaying salesDelaying shipmentDelaying shipmentsDelays ordersDelays paymentDelays paymentsDelays salesDeltaDemandDeutsche BankDiamondDigital LightwareDisconnectDouble orderDouble ordersDownsiz*DownturnDSODuplicate orderDuplicate ordersDuplicated orderDuplicated orders

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Case 4:02-cv-01486 Document 394 Filed 10/31/2005

E&OE&YE+YEarly deliveryEarly shipmentEarly shipmentsEarly shippingEarningsEliminate jobEliminate jobsEliminate ordersEliminate positionsEliminate shiftsEliminate staffEliminated jobsEliminated ordersEliminated positionsEliminated shiftEliminated shiftsEliminated staffEliminates positionsEliminates shiftsEliminates staffEliminating jobsEliminating ordersEliminating positionsEliminating shiftsEliminating staffElminate headcountEnterprise Resource PlanningErnst & YoungERPExceed*Excess capacityExcess headcountExcess inventoryExcess shiftsExchang*Expand capacityExpand incomeExpand inventoryExpand ordersExpand salesExpand shiftsExpanded capacityExpanded incomeExpanded inventoryExpanded ordersExpanded salesExpanded shiftsExpanding capacityExpanding incomeExpanding inventoryExpanding ordersExpanding sales

Expanding shiftsExpands capacityExpands incomeExpands inventoryExpands ordersExpands salesExpands shiftsExpansionExpect growthExpect incomeExpect ordersExpect salesExpected growthExpected ordersExpected salesExpecting growthExpecting incomeExpecting ordersExpecting salesExpects growthExpects incomeExtend payExtend paymentsExtend termsExtended payExtended payment sExtended termsExtending termsExtends payExtends paymentsEYFirst UnionFlashFlex systemForecast*FraudFreezeFrozeFrozenFujitsuFull rights of returnFurukawaFuture discountsGAAPGeneral ledgerGenerally Accepted

Accounting PrinciplesGLGlobal RealignmentGlobal reorganizationGoldman SachsGoodwillGrow ordersGrow salesGrow shift


MASTER FILE NO . c-02-1486 Cw

sf-2026333

Page 22 of 2 5

Growing ordersGrowing salesGrowing shiftGrowth in salesH& QHambrechtHatboroHatboroughHead countHeadcountHire*HiringHold merchandiseHold productHorshamHyperionImpairedImpairmentIncrease capacityIncrease in incomeIncrease in ordersIncrease in salesIncrease inventoryIncrease returnsIncrease salesIncrease shiftsIncreased capacityIncreased incomeIncreased inventoryIncreased ordersIncreased returnsIncreased salesIncreased shiftsIncreases capacityIncreasing capacityIncreasing incomeIncreasing inventoryIncreasing ordersIncreasing returnsIncreasing salesIncreasing shiftsIndustry slowdownInsider sale sInsider tradingInventoryJ.P. MorganJP MorganK.2KBMLate deliveryLate shipmentLay offLay-offLayoffLead time

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Case 4 :02-cv-01486 Document 394 Filed 10/31/2005

Lehman BrothersLevel offLeveled offLeveling offLevels offLight ReadingLosing businessLucentManufacturing resource

planningMargin calculationMargin calculationsMarket declineMarket Value MethodMaster Production ScheduleMerlotMidasMinutesMorgan StanleyMosaicMotley FoolMP SMRPNortelObsoleteOlstenOpComOperating CommitteeOPSSOracleOrder cancellationsOrder sOrg chartOrg chart sOrganizational chartOrganizational chart sOTOver-capacityOverdueOverstate*OverstockOversupplyOvertimeOvervaluationP.O .Paine WebberPart shortagePayment extensionPayment termPayment termsPiper ]affrayPOPressureProduct defectProduct return

Product returnsProduct shortageProduct swapProject capacityProject earningsProject incomeProject salesProjected capacityProjected earningsProjected incomeProjected salesProjecting capacityProjecting earningsProjecting incomeProjecting salesProjects capacityProjects earningsProjects incomeProjects salesProper accountingPrudentialPull arrangementPull inPull insPull systemPulled inPulling inPulls inPurchase extraPurchase inventoryPurchase orderPush outPush outsPushed outPushing outQuarter endQuarter-endQuestionableRainbowRampRecognizable incomeRecognizable salesRecognize incomeRecognize salesRecognized incomeRecognized salesRecognizes incomeRecognizes salesRecognizing incomeRecognizing salesReconfigur*Red bookRedbookReduce capacityReduce earnings

JOINT DISCOVERY PLANMASTER FILE NO , c-02-1486 cwsf-2026333

Page 23 of 25

Reduce headcountReduce incomeReduce salesReduced capacityReduced earningsReduced headcountReduced incomeReduced salesReduces earningsReduces incomeReduces salesReducing capacityReducing earningsReducing headcountReducing salesReduction in forceReduction-in-forceRedundanc*Refuse deliveriesRefuse deliveryRefusing deliveriesRefusing deliveryRe-orgReport incomeReport inventoryReport lossReport resultsReport salesReported growthReported incomeReported inventoryReported lossReported resultsReported salesReporting growthReporting incomeReporting inventoryReporting lossReporting resultsReporting salesReports growthReports growthReports incomeReports inventoryReports lossReports resultsReports salesReserveRestate*RestructuredRestructuringRetention bonusRetention policyRetun*Re-tun*

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Return Material Application Side letters Threat*

Return merchandise Signing bonus Time of shipmentReturn product Slow boat TopazReturned merchandise Slow pay Trading

Returned product Slowboat Trading policiesReturning merchandise Smith Barney Trading policy

Returning product Special arrangement Trial balanceReturns merchandise Special arrangements Turn rate

Returns product Special deal Turn ratioRev policy Special discount Turning rati oRev Rec Special meeting Turnrate

Revenue* Special payment TWPRIF* Special price U.S. Bank

Rise in inventory Special prices UBSRise in results Special pricing UncollectibleRise income Special request UndercapacityRising income Special requests UnderstateRising inventory Special shareholder Unethica lRising loss Special shareholders Unfinished goodsRising results Special terms Unfinished productRMA Stock awards Unique orderRMC Stock grants UnpaidRobbie S Stock options Vintage

Robbie Stephens Stock sales VintnerRobby S Stock trading VisibilityRobby Stephens Strengthen earnings WakoviaRobertson Stephens Strengthen income Wall Stree tRobust Strengthen orders WarbergROSCO Strengthen sales WarburgRound trip Strengthened earnings Weak earning sRushed shipments Strengthened income Weak incom eSA Strengthened orders Weak ordersSafety stock Strengthened orders Weak sale sSales decline Strengthening earnings Weakened earningsSales declined Strengthening income Weakened incomeSales declining Strengthening orders Weakened order sSales goal Strengthening orders Weakened sale sSales growth Strong earnings Weakening earning sSales increase Strong income Weakening incomeSales increased Strong orders Weakening ordersSales increasing Strong sales Weakening salesScaling back Stronger earnings WeiselScientific Atlanta Stronger income Whistle blowerSecret Stronger orders WhistleblowerSG Cowen Stronger sales William BlairShip early Substantial earnings WindowShip in place Substantial income WIPShut down Substantial orders Work in progres sShuts down Substantial sales WRShutting down Suspicious WR Hambrecht

Side agreement Swap Write downSide agreements TCW Write offSide deal Temp* WritedownSide document Termina* Write-downSide letter Thomas Weisel Writeoff

JOINT DISCOVERY PLANMASTER FILE NO . C-02-1486 Cwsf-2026333

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JOINT DISCOVERY PLANMASTER FILE NO . C-02-1486 CVO(sf-2026333

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EXHIBIT H


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IN THE UNITED STATES DISTRICT COUR T

FOR THE NORTHERN DISTRICT OF CALIFORNI A

In re : JDS UNIPHASE CORPORATION No. C-02-1486 CW (EDL)SECURITIES LITIGATION

DISCOVERY PLAN

This document relates to ALL ACTIONS

In response to the Court's October 12, 2005 Order, the parties filed a joint proposed discovery

plan on October 31, 2005 . The Court held a discovery conference on November 8, 2005 . For the

reasons stated at the conference, the Court orders the following discovery plan for the next phase of

discovery :

I . By November 15, 2005, the JDSU Defendants shall produce : (i) documents concerning stock

purchases during the Class Period and any reasons for such purchases by Bruce Day, Robert Enos

and Casimir Skrzypczak; and (ii) all contact information that the JDSU Defendants have in an

"accessible electronic format for all persons they can readily identify as former finance or

accounting employees . "

2. By November 15, 2005, the JDSU Defendants will complete the production of responsive e-mail

during the Class Period in the files of Keith Bisbee, Kevin Kalkoven, Anthony Muller, Jozef Straus

and Leo Lefebvre .

3 . During the week of December 5, 2005, counsel (including Barbara Hart and Jordan Eth or Terri

Garland) will meet and confer regarding : (i) a procedure for sampling documents from the time

period following the Class Period; (ii) more narrowly tailored requests for the production of

personnel files; (iii) the production of documents in response to Requests 33 and 35 ; (iv)

Case 4:02-cv-0 1 486 Document 407 Filed 11/10/2005 Page 2 of 3

1 procedures for identifying additional former finance employees whose information is not readil y

2 accessible, beyond those identified in subparagraph (b)(ii) above, ; and (v) the production of exit

3 interviews from former finance or accounting employees .

4 4 . During the week of December 5, 2005, counsel will meet and confer regarding : (i) the procedure

5 and timing of the production of data from JDSU's Enterprise Resource Planning database ; (ii) the

6 production of all paper and electronic documents, including e-mail from backup tapes and active

7 mail boxes, in the files of the Redbook team ; (iii) the timing of the production of diaries ,

8 appointment calendars, and telephone logs, as directed in the Court's order of September 7, 2005 ,

9 and (iv) the sequencing and timing of the JDSU Defendants' remaining production .

10 5 . By November 9, 2005, Defendants shall provide to Lead Plaintiff a list showing the server locatio n

11 of e-mail for the remaining individuals for which Lead Plaintiff seeks e-mail production . Those

° 12 individuals are : Charles Abbe, Don Bossi, Jeff Chase, Dan Clayton, Zita Cobb, Ken Crawford ,

13 Harry Deffebach, Kerry Dehority, Rick Fieber, Steve Fife, Dave Fox, John Gordon, Joseph Ip ,

14 David King, Fred Leonberger, Peter Moore, Steve Moore, Danny Pettit, Michael Phillips, Shell y

g 1 54-1 Pietrusiak, Charles Ragussa, Maurice Taveres, and Yves Tremblay . The parties shall meet and

16 confer by telephone no later than November 10, 2005 to reach agreement on production of e-mail

17 on a server-by-server basis .

19 6. Lead Plaintiff shall produce documents, including IRS 1099 tax forms, re flecting fees paid to any

19 confidential witness. No later than November 22, 2005, Lead Plaintiff shall respond in writing t o

20 interrogatory 25 to identify oral communications with confidential witnesses, including who mad e

21 the communication and when it was made.

22 7. No later than November 10, 2005, the parties shall meet and confer regarding Defendants '

23 production of the metadata from all copies of the Pitre e-mail .

24 8. No later than November 15, 2005, the parties shall meet and confer regarding Defendants '

25 discovery directed to Lead Plaintiff as listed in the Joint Discovery Plan filed on October 31, 200 5

26 at page 17, line 20 through page 18, line 18 .

27 9 . The parties shall meet and confer regarding the search terms that Defendants are using to review

28 documents . Lead Plaintiff may prepare a reasonable number of additional search terms if they hav e

2


1 a good faith basis for doing so .

2 10 . Defendants shall use their best effo rts to encourage their former accountants to produce th e

3 accountants' work papers .

4 11 . No later than November 9, 2005, the parties shall meet and confer regarding a date for the nex t

5 discovery conference and the filing of a joint proposed discovery plan for the next phase o f

6 discovery following that discussed here, as well as an update on discovery completed in this phase .

7 The joint proposed discovery plan must be filed no later than ten calendar days before th e

8 discovery conference . No later than November 14, 2005, the parties shall notify the Court of thei r

9 joint proposed conference date . The date shall not be later than mid-February 2006, but may b e

10 earlier.

11 11 . The parties are not limited only to production of the documents described in this Order and in th eZ° 12 accompanying Order Granting in Part and Denying in Part Lead Plaintiffs Motion to Compel an d+r w

13 Defendants' Motion to Compel . If a party has other documents that the party believes th e

A E 14 opposing party should have before the mediation, the party is encouraged to produce thos e

15 documents .ea o

16 IT IS SO ORDERED .a~ W

17 Dated: November 10, 2005 ~-- -j, 91

18 ELIZ ETH D. LAPORTEUnited States Magistrate Judge

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EXHIBIT I

PULLED FOR CONFIDENTIALITY

EXHIBIT J

JDSU0032844

IDS Uniphase Corporation' ]p Customer Sales

($000's)Top 10 GAAP - Q4 (sorted by Q4 )

LucentNortelComing*Alcatel'SiemensCienaTyco"SICPAAgilent (HP)MarconiScientific Atlanta,)5 : ,, -, 3727

Total Revenue (above)

Total Company Revenue

EYQQ FY90 Q4 Q Q 2 Q 3 Q Q Q1 521YTD VTD FY00 k 91 FY40 FY00 FY00 FY00 FY00 FY 00

$ % J[! In EUS!1 4 S!1 3 ,LDS.II %a$304,114 2I .3% 5 106 ,773 20. 4% $84,818 21 .5% 562,895 22 .3% $49,628 21 .6%$212,874 14 .9% $77,583 14 .8% $62,162 15 .8% $40, 487 14 .4% $32 ,642 14 .2%$ 73,458 5 . 1% $36,425 7 .0% $18,752 4.8% $11,368 4 .0% $6,913 3 .0%$ 84,436 5 .9% $24,463 4 . 7% $20, 439 5 .2% $25 , 554 9 . 1% $13,980 6 .1 %$40,961 2 .9% $20,622 3 . 9% $13,493 3 .4% $3,619 1 .3% $3,227 1,4%580,041 5 .6% $20,561 3 .9 % $ 20,250 5 .1% 5 19,613 7 .0% $19 , 617 8 .5%560,266 4 .2% $18,858 3 .6% $16,386 4 .2% 515 ,691 5 .6% 59,331 4 .1 %522,259 1 .6% $14,685 2 .8% $7,574 1 .9% 30 0 .0% SO 0 .0%$38,589 2 . 7% $13,664 2 .6% $11 , 181 2 .8% $8,001 2 .8% S5 ,743 2 .5%538,923 2 .7% $12,648 2 .4% $8,409 2.1-A $6,609 2 .3% $11,257 4 .9%$33,227 2 .3% 59,028 1 .7 % $7,571 1 .9% $8,284 2 .9% $8,344 3 .6%

$969,149 69 . 2% $355 ,310 67 .8% $271, 036 68 . 7% 5202 ,121 71 .8% $160 ,682 69 .8%

51 430 361 $ 523,960 S394,644 5281 ,698 5230,059

Prior periods have been restated to reflect merger & acquisition activity .

Fluctuation Analysis:

Alcatel - Pick-up in business for EPD (I OGb/s Mod's for Submarine )

Corning - Strong growth continued on the FPG products (specifically WDM & Isolators) . Revenue up -.65% in each of thelast 2 quarters.

Siemens - Continued growth in Q4 vs Q3 from Ottawa on the Optical Amp's (-1 .7x growth, or $16 .1 M,vs $9.SM) and EPD for itsOC-48 Mod's (-20% increase) .

Marconi - IJNC strong growth vs. last quarter .-52 .9 M

k

CONFIDENTIAL- JDSU 0032844

ATTORNEYS ' EYES ONLY

PURSUANT TOINTERIM AGREEMENT

EXHIBIT K

JDSU0530150

T ,, ; aagar>1~ :08125t20O3 06:22 AM

To : .Ala h Shdyahpo¢ 1IHQIJDS FEML r=@ IDS FUEL Irtc. NJ neh ChohdHQIIDS FT TL fhc @ IDS FITBL bhc,RaxdaD. NortkMQIJtS FrrELNo8JOS F176tIhc , Zbig Sobidsid /EQ(IDS FTrELInc OIDS FTTELihc,Gn]i+uM BajsradHQIJDS FrML I= 0JDS FII'BL Th e

cc : KaroarVitvahathn -JarkifinKriahOIDS FUELirtc , B&kae1Tretn blayFHQ/JDSFLTELLic@IDS FtTELrtm, L mu GrecofHQIJDS FUEL I= RIDS FUELlnc, Leo PaukWBQ1IDS FCTELLnc0IDS FEPSL Inc,Lloyd SuMivrtNHQrfl FUEL I1hc@ JDS FTTELT,ttc, NhggiBdhhaWRQIJDS FCFSLbhc 41 JtS FITELThc,Ctrol DavisIHQJIDS FML Inc 0 IDS FII' EL kc, Pam] HebedHQIIDS FUEL tic 13 IDS FML N z, MaltDeckhatoa BQ#JDS FEELBwOJDS F ELLhc

Subjec t- 1WGHzBuljPha&,iQ 2

Please note that Nortel have committed to pulling 100 0Hz product a t the Nor el Demand Run Rate(received Monday) . As a weuli the demand an DWDMhas increased from about231Cto about 54K forQ2.

FYI the tab Ica below ahow the Nortel100 GHz requimmenta that have been passed to the plan n 3s .Although, we would prefer a flatter pmfie it was made hnea rto accommodate the pulkin of other o ides .This ramp appears to be manageable atthi9 tim e

1 b elieve we should consider ouutel s lucky that the No rte I de mand materialized, however, we need acontingency plan in place for when the "Nortel clif'inevitably arrives, for now Iwould mccommend caution

and plan an it happening in Q5 or Q4.

Thankyou fo r your ongoing support,Roger-------- ---- Foru~hiedbf&og~xM 1 ,w z/HQ~IDS FMLT.%coh2510B1M00 M-56 AM

Rvgar M k weiea24A3Sl200012Z 1 P M

To: 1-Milt Be fl/RQIIDB FClELIna0JDS FPTELLIc,HavigPIta'4jiiWHQ(JDS FITBLInceJts FL18L!ae,PaulBebeeIHQ/IDS FTTELI=8IDLS FLTSLTae

cc : RandalNorthiHQIIDS FtTBLihc0IDS FTTELIac, I&iitess C niaiot+HQIJDS FITELIlEOIDS FMLIae

Subject : 100 GHz Build P hk for Q 2

Below arc the requirements based Ottawa allocation (75%)finished goods at Week 39, 3 weeks offinished goods at the end ofweek52, and that Nartel willpu 1113 weeks of p noducts .

P lease review this plan and amend an necessary Please note that we would pie for a more leve I loadingbut we do need allthe devices indicated forthe quarte r

P lc ase rea pond to Ma rites @ Cameron and myself

Thant ,Roge r

CONFIDENTIAL JDSU 0530150

EXHIBIT L

JDSU074961 8

Bsaada EII-Y<08l16170D0 0 7 :3 9 AM

To: LbydSahirnn/HQ/JDSFCfELtic07DS FLTELbc,Knxrablwjitm IHQJDSF ELInc@JDS Ft Lba,L ui:e HatykILIS 1[I141PHASEL UNIPHASH, Pciai Hi1bou 1W IJDS F1TELbc'3 JDS FIfEL Stc. EStvarL'fPan11HQ/JDS FL18LTII SDS FIIHL Th e

cc : Rick TxiFnao SI QIJDS FLTELbw9JDS FTT$Lho, Maggiloxnsh/HQIJDS FtFELSCUDS FTTELLcc,GmhdmPemucw •i *nRngd x07D5FTTHLInc

Snbjaci it theta Objectives

Terri,As you are probably already aware` agreat deal ofemphasis has been plated on. revenue general ing opportunities .One obvious area of exploration is the aaeea invento ry poo LJust under on e hundred million dalisia is sittingpoten .tial y idle with the following accounts :Nartell $71MLucent $LSM

Mena $7M

Harmonic Lightwave .p1M

siemens $i .a9 M

Over thn ncmt few dais, l would appmciate your emphasis on this issue in ranjunetfon with youroutside salescounterpart . What you are looking for are short term, cnnent quarter revcaue opportunities .

Rums Johnson has already taslmd the field sales tramwiththis item a we work tnwaids our revenue goals forthe

quarter. l attach. his original note fo r your information .

1 appreciate pour support .Rends,

Mikea~a,iss,~eM.~ei,~s .w.w awl.ar r~rf~ar~++~w+rvwswYr.,ry~rtww~:+~nw~r~++~+rwsa~wr+w6,w

rsarrwa~wwir* wiww~w~ia

. Rnsa IohuamiOUNIPHAS$OSl102MO 0621 P M

To: LaoPsolattifHQ5DSFPELllic JDS F17EL&m, 5lepheu-LybikGaeucellrom,PhilCtacao/US1U 1?HASE0L1NIPHASH,HatZuia iltIS(IJNIPHASH0UNIPHASH,GceriEm3tma/NL/H3A PJMPHMRGUN1PHASH, RT*wer Vsnaaitti1HQ1JDS FuEtinct JDS FUM E= ,Kres_de Wa HASE UNIPHASH

cc. M ioI.cducfHQ€.DS F ELTnc07DS FPTELr=, L ehnalTlembhyiHQJJDS FITEL Tnc@JDS FTTELHEC,1VIa;gEBanhahlHQI1D5 FUEL lnc07DS FA'SLbc, Giahain Poared-Kninn Log" 7DS FL .PELInc,Maniico TaviiwsMQIJOS FtML E c JOE PirEL Ste . Knal Vitvahatld7acm11i Exish @JDS F= Inc,aEo5 poJi too lek .cont

Subject: Rey : FPG • H=ess Fii,tshad Gmds TiLwhimy

Leo, Steve , Ha], and Kees ,

Please see the following messages from HCuma ra nd Maria Ledu c rega rding excess inventory

We will discuss this during ourvideo conference tomorrow Please be prepared to contact the customerand provide feedback by the end ofthis weck(August 18 ) in Me and Doke Tremblay.

CONFIDENTIAL JDSSU 0749618

JDSU074961 9

Tha nla,Russ

* aoASagc fibre LCumat """

Russ and Mike,

As you bath are aware, this is going to be a challenging quarter in temrs of revenue One area where Lwould hlw your immediate asewtance is is trying to zeduce the excess a ntorgpesitianthatwe currentlyhave with various customers . My recommendation would he to have the intcmalsalcs pezon Walk withthe account manager in trying to get our customers to aceeptthis mvcntoxp. Mario, please provide theinventory details (amount, part no, etc) to Mike and Rums . A summary of he apprux inventory holdingsfrom my UU a shown below. Lam not sure how accurate theme numbers are but even if they are bwerbp25%, we have a substantialapportunitp here:

Nodal $71MLucent $LSMComing $411Ciena $7MHamionicUgh .twave $1 MS ie mens $O .9 M

Total $98M

Irea lize that we have demand pulls and cons ignment with Norte 1, Lucent, Corning, and Cicna However,ihoow that In some cases we arc carrying too much inventory, eg .,NorteL Ruas,1havedkcu.ONedtheNo de t s rtu.atb n with Leo P aoletti and he is baking into it

Lwould appreciate yours upport on reducing any emeeaa inventory we are carrying Please, also provideregularupdatem, as Lneed to keep Moe mfcnnodofthe progres s

Regards,

Kuma r

KumarVivanatha @ .1 DS PLTELLN C

Komar Msva natha JOS PEEL INC08/1 40'2000 0255 P M

Ta: Mario Ledvc1HOffl FTTELrnEGIDS FIISLTxc , Raart 7ahuAoW .TSI[ MtPFIM HOU N1PHA58 . MthaalTirmbhy1HQIJDS FTTELIxc@JDS FITELtr . NFiggr .Sonxsls'HQ~717S PTTELrnE JDS FtIELLce

cc : Gnlam Franca -Iiarah IL g 4JDS =L c, Manitc Ta waac./HQfJDS P11'BLrnee3DS Fi[P,Lbc

Subject: Rae : FPG • $ :=vias Finiithrd Gmds Ixvinimy I

Mario ,

Thanks for verifying the finished goods inventory position

Russ and Mike ,


JDSU0749620

The ball is in Your court now to have the account ma nagcss and sales people contact the customersand detemlmc how much ofthe inventory we can move this quarter Lwould appreciate roceivingfromyou a $ target that lean expect, so Lean firm up my quarterly revenue numbers to !toe !

Maggi,

Z thinly logo-, is a way rho week, so 1 would appnecia be your help in wo rlcmg with Russ 's team on this

Regards ,

KumarMann Leduc

~, •~ &faiic Ledac

OW102=04A9 P M

Te: Russ Iahhson/LfSfLTNIPHASE t1N ]Pl ME , N,haaLT1, mbhy1HQI3tS FEFEL xnc@JDS FLTSLTnccc: Komar V v . eutha dncin a KdahQ JiM FEEL Ike, Gnu T7wmaa/HQEJDS FITEL 7neGJAS FIT$Lbt,

Gr]uirmPau]ce-Kucu Rogeie JDS FLTELItre, Gnla~m ut SujwafHQfJLSS FrTELIac@JDS FTTELInc,b4ioars Tava1 mQfJtS MELT =@ JD5 FITEL Lie

S nbjeet: FP CT - H=ews Firtitlrrd Goods m oire

Asa follow- up to Kumar's note , attached is a aum.marp p it pared by Goid Thomas by part num b er andcua tame rofthe F inished 'foods inventory in atockmoms atFPcl

The actualquantitins will change over time as shipments are done on a daflgbasia

The reports priced ou.t in Canadian dallats at currant a elling price .

Regards,

Maria

Inventory Aug !@ Greater Than 10(3kCuat .xl n


EXHIBIT M

JDSU0919604

M4br1FLT3 EMBrn zhxyb kiE

49I141l000 02,46 PM

Nancy 8 it1 1HQVJItS MELIucOJDS =Lbw, IaioIAfiabine 1IDS FrrELncc 6IDS FU Gic, Da*e$e unwO TSIURM HASHOIINIPHASE, DavidWikas!IJStUN1PHASESUN HASH,

76 ILTSItJ HAS$OUN1P RASE, Stevebboi*MSAJN1PHASEOLTN]PHASE, cbro1katoocb. o n,R lecca 33kaifte1US!U1(IPH'ASE UNIPHASH, W illowH VC'H/HMHAAJNIPHASH0UNWHASH, RobWhftkouxelUl EDMAIUNIPHASH13UNTPHASEJ=dfSttnus7HQ/JD8 FUELthe0IDS FPTHLIhe,IGrw e

cc ve S/UNIPHASE U PHASE,pbba®ocklcom

bcc

Subjact Txvehbly k* 161 M

Our mventorlc® have been growing faster than males, and it is time for each divi ion csontoo liar to L ad usback to nom acceptable inventory turns.

5'pectf Bally, our inventory leve ls and inventory tuna have gone in the wrong dioection 3hs data isapparent f mm a toview afEebrury financial sta tementa, and it not a "second quarter" a feet - thecomparisons with November, the last second-month-of-the-quartere how the same deteriorlatioaFurther, the toms data are smoothed oserthe last three months . The problem is moat acute in thefo Dowing divisions :

FF GTS DUHFaFoLIFFLILT

1 a m as ling each of the division controlle i to advise me what actions you are taking to bring this auto nunder contmL ?lease !et Lea, Steve, Craig and me know of your action plans by the a nd of tb i4 wee k

Please let me lmaw ffyou have anpquo,tinna at comments.

Tony


EXHIBIT N

JDSU0921957

Laa Lo&bm4M11W 61< . TT 7o:ef Sttnvrae

cc0111dl2CA0 12:19 PM

bcc

Subject Q2 TA- t-Y T c1ase

---------`------ IbivuadadhyLeaLei5bvmhV fJD3 FIM. ncanO1I 4i2OcU01M ]

,. Leo Iefebrve

0 111 312000 0315 P M

Te: Misso L educ/J Q/fl S FTIELluc0JDS FIT$LIhccc: M carte Tar-dies 1J17S =LLnc13 JAS FITEL fnc, Nancy Si JtSubjdci: Q2Ih96htoiy1kc1 zia r

Msrio, Inecd your help to expla in the $30M inventory increase in inventory this quarter (toms dawn to 4-4f r o m S.O) . Ihase attached a sp=adsheetwhichhightlighis the in creases Iwouldappreeiaw a responseby early next we ekto be prepared for the audit committee meetin g

Can you please espond in the following forma t

- IWDM metro point invento iy build u p $XXX- Furukawa laser buildup XXX- 'M Laserbui[dup XXX.

Tota1 incseas a $30M

Do not hesitate to ca11vhauld you have anyqu.cEtions.

Regards ,

Lea

Irwenlaiy Summaty .xk

CONFIDENTIAL .JDSU 0921957

EXHIBIT 0

JDSU0925584

"sttdai AMID 16ems.Nahn$IA' LIDS F ELihc0JI33 FtIELtar , 7am*fFMZ%c To Su-dut/UQlrD69 MELT @I DS FUEL $4c

07/2$t100007.45AM JctyAbix/Sa2oAXV O-" t&uxi;e TariuwtkEQfJI75FC18LTic@IDS FUEL iaa

bc c3n*ct Lucie at in ofw Je afa Jose Meetaag toda y

J©zel; Petcris on vacation so enclosed is a aumarp ofthe bus es with Lnccnt (it is a littb rough butgiaes y ou a 50 ,000 foot level view).

Ina auto bell the forecast into da around $850MinFY2401ataveralGM of38% where the480Cr OApricstays at the curzent price of $19,200. Ofthis revenue b2% is for 4000 CIA mvenu a at ZS% GM (with other

OM the total DAbusmess is 72% oft ue)andnon-DA component r % mein at 50% 01 .

Where the 4000 OAprice drops to $15,000 as Lucent Lao axled tar (t)rey a sl ed trit to go to $12k is

$15Krangej, this takes a $100M o$onr top and bottom Buell. Overaf GMdrops to 299 , with the 400GOAC Mdmpiag to 8.6% . The $100M aepussents about a11 .5% ovcallprice induct n onourF .001

business .

Orig ins! ftir - , I (Based m 24,000 400G Al s Il$19,200jFY2M

a Ma l

PraimmDivision Solos %SaIBs

735,882 , 8°. 84.EPQ 2ia,2AC!EpRazz 74,3 MOM aUNL 55=v 0dd s .TOTAL a ,o wa 10q

[bstod Pioduais

Rolactad Prgoclod OvIra IRaise ckxft Margins

425, ,2M 410 ,350173 34 .4%2,018,2$0 1,311 35

74,300,= 32,301 .0W 95 .6W.M.= 2.3 2P31 000 5516

757,94~,SB4 487 .274,055 38 .4

Flour d Farewst(Freed m 24AM 40DO Arms 0$15.0001FY2D0t

aa

Division Bales %Sal=s

FBG 685,582,3F 52.FPD 2,018,25 C.Lpibxx 74,3€50, CX U 9.W1L 1 5a OW

1.2w . 7

TOTAL 768,~,67T '100.

L1 " Producll;

R ojactod Pr"jonted Oust IIankle coats IR -g 1 s

5r24,4s,2&4 411),350,173 -21 .8%2018,250 1,311,8152 a5D%

74,35,I= 32,301,OGt0 MB53 000 23,281 .~

657,148,564 487,274,055 25


EXHIBIT P

JDSUG930138

6dsuim TsTang £ Q1 D To Jay Abbs15a1ofc 1I1BOCLt

VMTSC YaeafStmnsIHQIIDS Ft The 13 IDS FttELlnc, Zita06MIY20 0 1CLO9 .u i CnbbIHQIJDS FICEL Iftc*JDS FFTELTnc,Tony

h&l6itUSnJNVHASE@UNFHASE, Pou tcc Reufa3IDSFUELInc,KamnxVitva"0=-Jacia4ha

Mith @ 7DS FC1BL B=, Leo P ao]a11itHQ17LS PIf&LTncSIDS PtrELrnc

bcc

Snb ct N01WlM ting

Peter Moo=, Kumar Vis vanatha and 1met With Ken Bradley (VP, Supply Management, GlobalOperations, Dave Hudson (VP, Technology and Supplier Relations) and trmna Cuneo (Director, SupplyManagement Optics Commodities) at I4oztel"s Carling Ave . oTme on dune 7th to discuss the impbcation■

to JCS U afthe demand pcduations on Optem,2 ]OGhz Long Haul and Mosaic .

Oorotk 204 Ghe Latig$ttil .

Naite1agmedto work with us to reduce the accumulated inventory of 5,4MUS at Maritetvalue ($14.5M2 O47Ghz, $10 .9M Optera) . Ciaaia was aetibned to wo ± with Pete r Moore on establishing theimplementation plan.

(Cirzia had previously proposed a $325b v eekpull on Optera that Nortel suspended after2week :s_ Our goforward strategywill be to propose a'tlraw down"rate to agreed stookmglevels on both Optcm and

20aGhz by the end ofthe calendaryead

The 40% dm p ta fa re carted demand an Mosaic for Qt and QZ was a tidhuted toAssumption aunts (the majercontributor ) inthe ratio translationofSyatenw to Components.A delay (as opposed in a drop in dema n4 on S ystem deployment

Ken Hmdley affirmed tha tNortel had a responsibility to work with us to minimize the impact afthe $42M drop in forecasted

demandThey were concerned that we would deploy any capacity made available as a result of the change

to suppo rtthcseampetitors .There was internal pressure to reduce inventories and imp rove 1350 but g iven the strategic

nature of Optica lcomponents , the eaueas inventory was defensible

We reached agmement tha tWe would as sere the oppottunitiea to r -dueotthe utiliratian ofcapacity under the Btek OEM

a gm ement an dqu anti" the inventory epos uxc .That there was no immediate imp act to the eune nt quarto r and out fa cal year end and that

coketive1ywe will es tabl is h a p mgr m to mitigate on rriak on an ongoing ba sir with re solu tian no later than

ourfi cat Q2..

In summary, it was a productive meeting a nd 1 believe we arrived at a way forward that preserves thee stab hshe d pas hive is latibnship .Please call should you need clarification or need to discuss furtherRegards ,Moe .


EXHIBIT Q

JDSU0931268

Mat Mm"M l IMSL 7e lay Abbe/SaroIO1 ;l1 OCLI

rsc 7n_af Sttaas * Q/1DS PDELIncO SDS FLTELInc, ZilaOWDY2 0 7003 .25PM cc ZcbbIHQIJDS FCISL I=0IDSFTPSLhLr

bcc

5nb~esot Q4 REVENUE EXPOSURE AND ISSUES UPDATE

Received ca ll from J R Newland, Augur t Is; with update that Lucent was puu ;uing a "new pxngmmpushit]g the demand curve ourthat will impact their Q4 (ends Sept .) a nd FY200 L It appeals that Lucent

cannot satire s ufficient Tranamiss io n modu Its to ma tch up with supply on other mate rial a~ quircd S ratheir 10 Gteabitsystem initiative _ Cuatameua are not pmpared to continue with 2 .5 Gigabitdeployment

until the 1 0 Gig et ring is available- J R sized the impact at 313 to 40% starting in the curscnt quatterandcommitted io a tlowup callearly next week b3 provide futtheru.pdatea

OUR 2 RSLZMENARY INTERNAL ASSESS M 51WT

4U00($52 .5maIN)FYULQ1 Commit 5200 unitsShipped to Aug.4th 17211Anticipated pulh* 24614

2 haltau 2,736

@$L9.2k us $52.53m

FYOLQ2 Commit 6600 unitsRevised Demand 4556Drop 2244-

a $19 .2k US $43 .1m

K.'MM 1os s i i (F2-32LtQ1 Unit Reduction US $ impac t

S LL 6-Z1 452 841kWMUJ3000-Z3 291 2,022

The above analysis ass times that Luce nt is planning an absorbing $1.2-3m US of on hand but not invoiced

inventory on consignment at Lucent4000 $11.51SL16 $140KWMU $320M

We will be explnrmg ahcrdnt a opportunities to offsetthe revenue, sh r6llimmcdiately.

XORT L1Dti~$sAs camp axed to the lot 4 weeks ofthe previous quarter, Norte?s L00GHz pull has dropped from `117m t o`$7m with a subsequent increase in on hand inventory to $1Gm (vs contractural commit at 4 weeks x

San ;casteddemand or $14m) . With Etmkb L00 GHz qualifratian, Norels puUrate, already below plan,has been reduced to 75% o fthe previous level On the assumption that the 25% it soused to Etck weneed a strategy for tnc+entorp depk tioa

Wnea3c VDMMoasir WOMB, built on the pilot lion, have failed qualificatio a (damp heat) . Replacement qual units fromthe production line, with results du e to Nortelthis Friday, have alm a failed The problem has bee nid utiiied an stresses induced a s a result ofa new coupler attachment pmecduic (sleeve placed an tab e) .Two new des ion variants incorporating corrective act as (adjacent sleeves not touching, replacing


JDSU0931269

aLove a with foam) atatted damp heat testiag on Augusi Lot How we provide comfort to NartCl wiilrequnecareful co rnmunicatiana .

Received Lette r Oflntent from Norte i an the Misaic Am.plifer. We anticipate xc coiving a PO next weekand a committmc nt for A minimum a f 90% of the 1500 unite .

ho od f8'11pP-9Fl, iNoitlis requesting a single inteiface andemand/supply planning .

CWHACiena wi lcontinue to take WD i915a and Hdybrija [me]ad ag relacements an RMAr d Amplif is) to bedeployed at52.milhwatts vs 110 .

Failure mechanism not fully undem toad but current hypothesis isepoxy phokidegradation due to green light in combination with

980 Pm light.U is anticipated (hoped) that time to failure willbe significantly increasedat the In wer power leve lCiena has an alternate source an the pump WDM and Hybrid(FDLQ)and are not peep ared to introduce unqualified pa its from Sik m or Etekat ibis point in time .

We have committed to the rework an the wtumcdAmplders .Ciena intends to pursue the elimination of epoxy based devices i sAmplification .

With a current run rite of-2 returnsfday ('60 Iodate} and with appmx 1000 Amps in the fold, the problemis serious and Ciena is obviously concemedthat visibility-on the issue is reatdcted

TMUSMLOMWe have meacbedthe concluskinthat we should not, at this time . pursue acquisition as a method ofguarantee mg security ofsupplp en Tunable lasers for the S WS. Contingency plans iuclude pursuingsecond and third sou wee with New Focus (currently incorpo mted an a iahouae c band SWS syetems) andAgilent as well as investigating mtemaIdevelopment

Regards,Mae .


EXHIBIT R

EXHIBIT S

EXHIBIT T

EXHIBIT U

JDSU035091 8

ii s7;eet Elk 41V 1J2000 0 153 P M

To: OPSScc : Ric1BajihskifHQfJDS FUELhtc(JDS FITELtnc, Cafol DavirHQVJDS FUELIhc@JDS FUELLh, Eiic

Lsi to it le /EQIJDS FUEL Inc @ JDS FUEL Inc, Steve Yau .M'FIQIIDS PTTEL IUcO IDS FUEL lac, KimWbideR3QI t)S FtTELtnc0IDS FtIEL Inc . Douglas McNaiiWHQ/JDS FTi73LIrtc0IDS FUELiec, OrlandoEata~&IHQ/JDS FUEL IticiJDS FuTELInc, Dart GoodwiWRQIJDS FUEL TncOIDS FtTELtnc, Bo bRi oWHQ/JDS FUEL IncOJDS FUEL Inc . Btoz ReiebazdfflQ/JDS F ELIne0JIJSFUELIn+c,PhilChateanvet1/HQIIDS FITELbac0IDS FUELtnc, Boaiaie Spen7Jf Q/JDS FUEL btcQJDS FrrEL1nc, JeffR7kite]oc1dHQ/JDS FUELGc0 JIBS FUEL lac, Into wo CRvelhiIHQTJDS FUTELIticOIDS FUEL Inc,LAax Be I UHQIJDS FETEL Ike 0 SOS FUEL bac . C ath y Fa+sz etfHQ/JDS FUEL the OJDS FITEL bc, MaggiBoaxahIRQBDS FrMLhLeeJDs FtTELTnr. Rick Ttifateo*IHQiIDS FLTELIac8JDS FITELIbc, Ricl1FtcM16 .h.hM1JDS =1=3 IDS FrMLtiac, David L*;kif6o1HQ13DS F ELT7icliiJISS FttELlnc

Subject: (RedSwl)Saks andOpetaticpbsPhtthtu g

Our weekly Thursday Red book mating proved to be an enlightening exporianoa .Consider ing alI the recent dornand chancgas ouar the past f ew weeks , we are st iIIontrack to finish theRsdbcok subrrission prior tot hequar ter end . The farecastinggroup has comrritted to publishing a 'revised forecast', first thing Monday . Th is'ravissd forecast' will have changes relating tot he Nortal and Lucent changes, aswell as of hors . The Supply Chain has boon instructed to cons ider the 'netchanges', and whore largo deltas tot he last forecast exist r use that signal ast heir 'statement ct demand" . Whore the delta is not sogreat, use Mansgarrtentjudg wont astowhich signal to process .

I have not iced through r ious conversat ions wit h Rodbook folks that a rraj or

disconnect ea ist s between f ut ura for vast ed demand and our growth curve . I t

seams t hat we have a divarg nce between ou r overarch ing grout h of 25 %

QTftr QTR and t he f orscast demand out in Q S. and Q 4 . So st at ad plainly theforecast out in QS and O 4 is substantially less than our proj set ed growt h curve .

It is a f orgone conclusion that gvon t ha rnarket s' need for bandwidth, we willoxperionoe the 25%QTR+QTRgrowth. Thaimpcrtancoof identifying all sources

of demand cannot be over emphasized - a If the rrr~briafarr a CV#y~re tobsi

plart of fectdreiy, aff sauces of efama 1d exist be iaent ified. For atrarqIe : arc

partA invaatorystrateg`o r wproaticts; aistribution invaitorios and many

otfi6rs. When all sources of demand have boon r aaiizodr it is only t hen t hat a

realist is plan can be developed t o ach iovo t he ccmpan ias ' goal s, wh i to bettermanaging product ion, inventories and back hogs . That orocast ing depart rr aint is now

addressing the atsme , and hopes to capt are a rrore

aecur at a stat rrent of demand in Mondays ' revised f orecast ' . However, wa r ustendeavour t o rapt urn, all sources of demand each f oracast irg cycle .

f 'st regards,


JDSU035091 9

Thomis G Rf reManajar, Da n&w MWmganzm

JDS Unfphase, FIG

(613)727-1304 x2846

0 An excerpt IrcmTttorres E va n n, Wllllam Lee Berry, D .Oay dark "MsruTaetLrlN Ranring Enocmtrci

Syetww'


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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

In re: JDS UNIP14ASE CORPORATION No. C-02-1486 CW (EDL)SECURITIES LITIGATION

ORDER VACATING HEARING

This document relates to ALL ACTION S

On December 20, 2005, Lead Plaintiff filed a motion for issuance of a letter rogatory to th e

Superior Court of the Province of Ontario, Canada to obtain discovery from Thomas Pitre, a former

JDS Uniphase employee who lives there . On January 3, 2006, Defendants JDS Uniphase and Kevin

Kalkhoven filed statements of non-opposition to the issuance of the letter rogatory . The parties,

however, ask the Court to make additional prospective orders regarding the procedure and scope of

the discovery in Canada . Because this matter is appropriate for hearing without oral argument, the

January 24, 2006 hearing is vacated. The Court grants Plaintiff's motion .

The Court declines to make any advisory rulings regarding the Canadian discovery . The

parties should, of course, comply with applicable Local Rules . Questions regarding the scope of the

discovery would appear to be more properly addressed to the Canadian court . The Court has no

reason to doubt that the Canadian court will recognize the importance of this deposition and giv e

each party an appropriate and fair opportunity to participate .

IT IS SO ORDERED .

Dated: January 18, 2006 47j,n 0. L.ELIZA ETH D. LAPORTEUnited States Magistrate Judge


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Joseph J . Tabacco, JR. (75484)Christopher T. Heffelfinger (118058)BERMAN DeVALERIO PEASE

TABACCO BURT & PUCILLO425 California Street, Suite 202 5San Francisco, California 94104-2205Telephone : (415) 433-3200Facsimile : (415) 433-6382

Liaison Counsel for Lead PlaintiffConnecticut Retirement Plans and Trust Fundsand Counsel for Oklahoma FirefightersPension and Retirement System

Jonathan M. PlasseBarbara J. HartAnthony J . HarwoodMichael Stocker (179083)Jon AdamsLABATON SUCHAROW & RUDOFF LLP100 Park AvenueNew York, New York 10017-5563Telephone: (212) 907-0700Facsimile: (212) 818-0477

Lead Counsel for Lead PlaintiffConnecticut Retirement Plans and Trust Fund s



OAKLAND DIVISION

IN RE JDS UNIPHASE CORPORATION) Master File No. C 02-1486 CWSECURITIES LITIGATION )

} [PROPOSED] LETTER ROGATORY TOTHE SUPERIOR COURT OF JUSTICE OFONTARIO , CANADA

Date: January 24, 2006Time: 9:00 a.m.Ctrm: E, 15th FloorBefore: Hon. Elizabeth D . Laport e

PROPOSED LETTER ROGATORY

Master File No . C 02-1486 CW

Case 4:02-cv-01486 Document 433 Filed 01/1812006 Page 2 of 8

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TO THE SUPERIOR COURT OF JUSTICE OF ONTARIO, CANADA :

WHEREAS the captioned action is properly under the jurisdiction of and is now pending

in this Court ; and

WHEREAS it appears necessary for the purpose of justice that Thomas Pitre , a witness

residing or otherwise doing business within your ju ri sdiction be examined there, with a view to

testifying , producing , authenticating and reviewing documents within his possession and con trol ;

YOU ARE REQUESTED, in furtherance of justice , to cause the aforesaid witness to

appear by means ordinarily used in your jurisdiction to answer questions under oath or

a ffirmation and to bring to and produce at the examination the documents set forth in the

schedule annexed hereto .

When you request it, this Cou rt is ready and wil ling to do the same for you in a similar

i case .

This Letter Rogatory is signed and sealed by Order of the Court made on the date set

forth below .

Dated: January 17, 2006

4;"q 0. LywtELIZABETH D . LAPORTEUnited States Magistrate Judg e


Master File No. C 02-1486 CW


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SCHEDULE A

DEFINITIONS

1 . "You" and "Your" shall mean each person to whom this document request i s

directed and any persons acting on their behalf or under their direction or control .

2 . "JDSU" or the "Company" means JDS Uniphase Corporation and each of its

subsidiaries, divisions, subdivisions, affiliated companies or persons, predecessors, and all

present and former directors, officers, employees, representatives, advisors, agents,

intermediaries, attorneys, accountants and all other persons acting on its behalf.

3 . "Individual Defendants" means Jozef Straus, Kevin Kalkhoven, Anthony R.

Muller, and Charles J . Abbe, both collectively and individually .

4. "Defendants" means JDSU, and the Individual Defendants, both collectively an d

individually .

5 . "SEC" means the United States Securities and Exchange Commission and al l

employees, bureaus, divisions, regional offices, and representatives thereof

6. "RedBook" means internal product demand forecasts produced by JDSU .

7 . "RedBook Team" means the employees, consultants or other personnel at JDS U

responsible for generating the RedBook .

8 . "Document" or "Documents" means any and all written, recorded or graphic

material, whether recorded or stored in hard copy or electronically, including but not limited to :

tapes or other voice recordings, e-mails, booklets, brochures, pamphlets, circulars, notices,

periodicals, papers, contracts, agreements, photographs, agendas, minutes, memoranda, written

instructions, messages, appraisals, analyses, reports, plans, evaluations, financial calculations an(

representations, diary entries, calendars, phone or other logs, correspondence, telegrams, press

releases, advertisements, notes, transcripts, working papers, drawings, schedules, tabulations and

projections, surveys, studies, graphs, charts, films, printouts, and all other data, including draft s


Master File No. C 02-1486 CW2


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of or modi fications to, including subsequent reproductions containing additional commentary ,

notes or annotations .

9 . "Communication" means any and all transmittals of information, in the form of

facts, ideas, inquiries or otherwise, whether orally, electronically or in writing ; whether directly

or indirectly; and whether in person or by telephone, telecopier, mail, personal delivery,

electronic mail, Internet or otherwise .

10. "And," "or" and "and/or" have both conjunctive and disjunctive meanings ; "all "

and "any" means each and every .

11 . "Concerning" means directly or indirectly referring to, relating to, connected

with, commenting on, impinging or impacting upon, affecting, responding to, showing,

describing, analyzing, reflecting on or considering .

12. "Refer," "relate," "referring" and "relating to" mean any and all documents which

comprise, memorialize, embody, discuss, evaluate, consider, comment on, reflect, record or

report on the subject matter of the request, or which were reviewed in conjunction with, or were

created, generated or maintained as a result of, the subject matter of the request .

13 . "Meeting" means the contemporaneous presence of any natural persons, in

person, by telephone or by any other means, for any purpose, whether or not such presence was

by chance or prearranged, and whether or not the meeting was formal or informal or occurred i n

I connection with some other activity .

INSTRUCTIONS

1 . In responding to this Request, You shall produce all responsive documents which

are in Your possession, custody or control, or in the possession, custody or control of Your

agents, employees, attorneys, accountants or other representatives . A document shall be deemed

to be within Your control if You have the right to secure the document or a copy of the documen t

from another person having possession or custody of the document .PROPOSED LETTER ROGATORY

Master File No . C 02-1 486 CW3


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2. You are to produce for inspection and copying by Plaintiffs original documents as

they are kept in the usual course of business, or You shall organize and label them to correspond

with the categories in these requests . All non-identical copies which differ from the original or

from the other copies produced for any reason, including, but not limited to, the making of note s

thereon, are to be produced.

3 . If any responsive document was, but is no longer in Your possession or subject to

Your control, state whether it is : (a) missing or lost ; (b) destroyed; (c) transferred voluntarily or

involuntarily to others ; or (d) otherwise disposed of, and in each instance identify the name and

address of its current or last known custodian, and the circumstances surrounding suc h

disposition .

4. You shall produce said documents as they are kept in the usual course of business

or shall organize and label them in correspondence with the categories in this request .

5 . You are to produce all documents originating in, referring to, considering or

concerning the Relevant Time Period .

6. Where a claim of privilege is asserted in responding or objecting to any Requests

for Documents, and information is not provided on the basis of such assertion, You shall in the

response or objection identify the nature of the privilege (including work product) which is being

claimed; and set forth the state privilege rule being invoked and indicate whether (a) such

documents exist, or (b) such oral communications took place . In addition, if any part of th e

I Request for Documents is deemed to call for the production of any privileged materials and suc h

privilege is asserted, a list is to be furnished identifying each document so withheld together

the following information:

(a) the reason for withholding;

(b) statement of facts constituting the basis for any claim of privilege, work

or other ground ofPROPOSED LEITER ROGATORY

Master File No . C 02-1486 CW4

Case 4:02-cv-01486 Document 433 Filed 01118(2006 Page 6 of 8

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(c) brief description of the document, including :

(i) the date of the document;

(ii) the name of its author, authors, or preparers and an identificatio n

by employment and title of each such person ;

(iii) the names of each person who was sent or had access to, or

custody of the documents, together with an identification of each such person ;

(iv) the paragraph to this request to which the document relates ; and

(v) in the case of any document relating in any way to an ora l

communication, identification of such oral communication .

(vi) If the documents requested herein have been lost or destroyed, th e

documents so lost or destroyed shall be identified by author, date and subject matter .

7. You are to produce each document requested herein in its entirety without

deletion or excision (except as qualified by the preceding instruction concerning privilege),

regardless of whether You consider the entire document to be relevant or responsive to th e

I request.

8. Where a document is not produced in full or is produced in redacted form, so

indicate on the document . State with particularity the reason it is not being produced in full, and

describe to the best of Your knowledge, information and belief, and with as much particularity a s

possible, those portions of the document which are not being produced or are being redacted .

9. You are to supplement Your responses if, subsequent to the date of this Request ,

you locate or come into possession of documents responsive to this Request .

10. You are requested to provide an appropriate affidavit attesting to the authenticity

of the documents produced.

YRorosm LETTER ROGATORY



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RELEVANT TIME PERIOD

Unless otherwise specified, the relevant time period for these Document Requests shal l

be from October 28, 1999 through July 26, 2001, inclusive, and shall include all documents an d

information that relate in whole or in part to such periods, or to events or circumstances durin g

such periods, even though dated, prepared, generated, used or received prior or subsequent t o

those periods . If a different time period is indicated in a particular document request, that time

period shall similarly include all documents and information that relate in whole or in part to

such period, or to events or circumstances during such period, even though dated, prepared,

generated or received prior or subsequent to that period.

REQUEST FOR DOCUMENT S

1 . All documents produced, authored, or otherwise created by You conce rn ing the

production of JDSU's product demand forecasts .

2. To the extent not covered by Request Number 1, all documents produced,

authored, or otherwise created by You concerning the production of JDSU's RedBook .

3 . All documents reviewed or relied upon by You or any other member of th e

RedBook team in preparing product demand forecasts

4. To the extent not covered by Request Number 3 , all documents reviewed or relied

upon by You or any other member of the RedBook team in preparing any RedBook .

5 . All documents concern ing or reflecting any communications between You and the

Individual Defendants , including email or other electronic communications .

6. All documents conce rning, reflecting , or memorializing any presentations made

by you or any other member of the RedBook Team to the Individual Defendants .

7. To the extent not covered by Request Number 6, any documents provided by you

or any other member of the RedBook Team to the Individual Defendants, including but not

limited to documents concerning JDSU's product demand forecasts or RedBook .

8 . All documents concerning JDSU that were sent to, received from, or concerning

communications with the SEC or other regulatory agency.




1 9. All documents concerning facts, information, or projections about current and

2 expected demand for JDS products .

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EXHIBIT W


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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNI A

I In re JDS UNIPHASE CORPORATIONSECURITIES LITIGATION

No . C 02-1486 CW

ORDER DENYINGDEFENDANTS'MOTIONS TO

DISMIS S

Defendants JDS Uniphase Corporation (JDS), Josef Straus,

Anthony R . Muller and Charles Abbe move to dismiss the second

amended consolidated complaint (SACC) . Defendant Kevi n

Kalkhoven moves separately to dismiss the SACC . Lead Plaintiff

Connecticut Retirement Plans and Trust Funds opposes the

motions . The matter was heard on June 4, 2004 . Having

considered the parties' papers, the evidence cited therein and

oral argument on the motions, the Court DENIES Defendants JDS,

Straus, Muller and Abbe's motion to dismiss . The Court GRANTS

in part and DENIES in part Defendant Kalkhoven's motion to


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II dismiss .

BACKGROUND

The following facts are alleged in the SACC . Defendant JDS

manufactures and supplies components of fiber-optic networks to

telecommunications and cable television system providers .

Defendants Straus, Muller, Abbe and Kalkhoven are current and

former executive officers and directors of JDS . Defendant

Kalkhoven retired from his position as director and officer of

JDS in late September, 1999, although he continued to be

employed full-time by JDS until July 31, 2000, and part-time

until July 31, 2001 . Defendant Kalkhoven received a $400,000

salary for the year ending July 31, 2000, and $200,000 for the

subsequent year of part-time work ; he continued to be employed

at the San Jose headquarters of JDS and consulted with upper

management on strategic and operational issues .

Lead Plaintiff purports to represent a class of persons and

entities that purchased or otherwise acquired securities of JDS

between October 28, 1999 and July 26, 2001 . Lead Plaintiff

alleges that, during the class period, Defendants engaged in a

scheme to inflate artificially the price of JDS stock by

fraudulently recognizing revenue, by falsely representing that

demand for JDS products was strong, and by overstating the value

of its inventory by failing to write off excess inventory . Lead

Plaintiff alleges that Defendants benefitted from this scheme by

selling stock at inflated prices and by using the value of JDS

stock to purchase other companies for less than their worth .

Lead Plaintiff alleges that Defendants improperl y

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recognized revenue throughout the class period in several ways .

First, Defendants recognized revenue from shipping to customers

orders that contained full rights of return, in direct violatio n

of general accepted accounting principals (GAAP) . Pursuant to

GAAP, revenue should not be recognized until the custome r

becomes obliged to pay for the products . Employees at several

of JDS's larger United States plants also shipped millions o f

dollars worth of goods during the last weekend of each fisca l

quarter (through at least the quarter ending June 30, 2000) to

temporary storage units, in order to meet the plants' internal

sales goals . The unopened products were returned to the

respective plants several weeks later . This practice occurred

under the supervision and approval of a general manager in

Horsham, Pennsylvania who reported directly to Defendant

Kalkhoven . Lead Plaintiff further alleges that, from the

beginning of the class period through approximately March, 2000

(a period in which demand for JDS products was strong), several

JDS plants intentionally delayed shipments of goods until

subsequent fiscal quarters once then-current quarterly sales

goals had been met .

Beginning in March, 2000, demand for JDS products began t o

decrease substantially across the country, as reported by

confidential witnesses employed at a majority of JDS

manufacturing plants in North America . As demand decreased,

increased numbers of order cancellations occurred at JDS

facilities, resulting in large stockpiles of excess inventory .

In response, JDS plants did not stop manufacturing goods, bu t

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rather continued to ship products on canceled orders and to ship

goods prematurely in anticipation of future orders . Both

practices allowed JDS to recognize revenue immediately .

The decrease in demand for JDS products continued to worse n

throughout the summer of 2000 . Excess inventory also continued

to accumulate . As a result, JDS began discussions about a wide-

scale company downsizing as early as June, 2000 ; cost-cutting

measures were already being implemented on a smaller scale at

individual plants, most notably in Ottawa, one of JDS' s

headquarters .

JDS closely monitored its sales and demand forecasts in a

document known as the "Redbook,u a spreadsheet that listed

quantitative data regarding sales quotas and anticipated

profits . The Redbook was discussed and updated weekly, and was

circulated among upper-level management at JDS . Defendants all

had regular access to the Redbook . On August 18, 2000, manager

of demand management Thomas Pitre sent an internal email to

twenty upper-level management employees that stated, in

pertinent part, "Considering all the recent demand changes over

the past few weeks . . . a major disconnect exists between

future forecasted demand and our growth curve . It seems that we

have a divergence between our overarching growth of 25% QTR/QT R

and the forecast demand out in Q3 and Q4 . "

Meanwhile, in conference calls with securities analysts o n

July 27, 1999, October 29, 1999, January 26 , 2000 and April 25,

2000, Defendants Kalkhoven and Muller reported strong demand for

JDS products and strong visibility regarding future demand . In

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conference calls with securities analysts on July 26, 2000,

October 26, 2000 and January 25, 2001, Defendants Straus, Muller

and Abbe similarly reported strong demand for JDS products .

On November 4, 1999, JDS acquired Optical Coatin g

Laboratory, Inc . (OCLI) . Again, Lead Plaintiff alleges that

prior to acquiring OCLI, JDS engaged in fraudulent revenue

recognition practices that artificially inflated its sales

statistics and, thus, its stock price . JDS acquired E-Tek

Dynamics, Inc . (E-TEK) on June 30, 2000, and recorded

approximately $15 .7 billion in goodwill in connection with the

acquisition . Lead Plaintiff alleges that Defendants knew or

were reckless in not knowing that $15 .7 was a vast overstatemen t

of goodwill for E-TEK ; Defendants wrote off $13 billion of it in

the third quarter of 2001 . Defendants also announced a $41

billion dollar acquisition of SDL, Inc . (SDL) on July 10, 2000

(although JDS did not obtain shareholder consent for the merger

until February, 2001) . Defendants made all three acquisition s

by exchanging shares of stock with the acquired companies, and

it was thus in Defendants' best interest to keep the JDS stock

price artificially high in order to secure a more favorable

exchange rate . JDS's stock price was near an all-time high in

June, 2000, and had increased significantly just before the OCLI

acquisition, as well . Additionally, Lead Plaintiff alleges that

proxy-prospectuses that JDS filed with the Securities and

Exchange Commission (SEC) in connection with the acquisitions of

OCLI and E-TEK were fraudulent in that they identified strong

demand based in part on JDS's faulty accounting practices . The

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OCLI statement was signed by Defendants Kalkhoven, Straus and

Muller ; the original E-TEK statement was also signed by all

three, although an amended version was signed only by Straus an d

IMuller .

It was in the interests of Defendants Kalkhoven, Abbe,

Muller and Straus to inflate artificially JDS share prices for

another reason . During a time when JDS stock prices were near

all-time highs, and with knowledge of wide-spread declining

demand for JDS products as reported in the Redbook and by the

Pitre email, these Defendants sold millions of shares of JDS

stock for profits in the hundreds of millions of dollars in the

month of August, 2000 alone .

Defendant Kalkhoven later admitted in an industry journal

that he knew JDS was having financial difficulty in spring,

2000, even as he was making contrary and misleading statements

to the public . A May, 2001 article profiling Kalkhoven in Light

Reading stated that he "managed to engineer his departure from

JDSU at a choice moment -- a few months before everything

optical started going sour (a development that he says he also

saw coming) . "

On January 25, 2001, JDS publicly announced that its

quarterly sales would not meet projections, marking the first

time that JDS or its agents acknowledged publicly that business

was turning sour . However, at the same time, JDS stated falsel y

that sales in the March quarter were projected to exceed sales

for the quarter ending December 30, 2000 by as much as ten

percent . Lead Plaintiff alleges that Defendants continued to

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mislead investors and analysts in January, 2001 because it had

yet to obtain shareholder approval of its SDL acquisition .

Indeed, immediately after it obtained shareholder approval on

February 12, 2001, JDS significantly adjusted downward its

projections for the then-current quarter . JDS thereafter

revealed additional bad financial forecasts, including on July

26, 2001, when it announced a $44 .8 billion write down o f

goodwill and, for the first time, claimed excess inventory ($270

million worth) .

On the basis of these allegations, Lead Plaintiff claims

that Defendants JDS, Straus, Muller and Kalkhoven violated

section 11 of the Securities Act of 1933 (Securities Act) ;

Defendant JDS violated section 12(a)(2) of the Securities Act ;

Defendants Straus, Kalkhoven and Muller violated section 15 of

the Securities Act ; Defendants JDS, Kalkhoven, Muller, Abbe and

Straus violated section 10(b) of the Securities Exchange Act of

1934 (Exchange Act) and Rule 1Ob-5 promulgated thereunder ;

Defendants Kalkhoven, Muller and Straus violated section 14 of

the Exchange Act and Rule 14a-9 promulgated thereunder ;

Defendants Kalkhoven, Muller, Straus and Abbe violated section

20(a) of the Exchange Act ; and Defendants Kalkhoven, Muller,

Straus and Abbe violated section 20A of the Exchange Act .

On October 11, 2002, Lead Plaintiff filed a first amended

consolidated complaint (FACC) . Defendants filed motions to

dismiss, which the Court granted in part and with leave to amend

in an order dated November 3, 2003 . On January 9, 2004, Lead

Plaintiff filed the SACC .

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LEGAL STANDARD

A motion to dismiss for failure to state a claim will be

denied unless it is "clear that no relief could be granted under

any set of facts that could be proved consistent with the

allegations ." Falkowski v . Imation Corp ., 309 F .3d 1123, 1132

(9th Cir . 2002), citing Swierkiewicz v . Sorema N .A . , 534 U .S .

506 (2002) . A complaint must contain a "short and plain

statement of the claim showing that the pleader is entitled to

relief ." Fed . R . Civ . P . 8(a) . "Each averment of a pleading

shall be simple, concise, and direct . No technical forms of

pleading or motions are required ." Fed . R . Civ . P . 8(e) . These

rules "do not require a claimant to set out in detail the fact s

upon which he bases his claim . To the contrary, all the Rules

require is 'a short and plain statement of the claim' that will

give the defendant fair notice of what the plaintiff's claim is

and the grounds on which it rests ." Conley v . Gibson , 355 U .S .

41, 47 (1957) . All material allegations in the complaint wil l

be taken as true and construed in the light most favorable to

the plaintiff . NL Indus . . Inc . v . Kaplan, 792 F .2d 896, 898

(9th Cir . 1986) .

DISCUSSION

I . Sections 10(b) and 14 of the Exchange Ac t

A . Legal Standard

1 . Section 10(b )

Section 10(b) of the Exchange Act makes it unlawful for any

person to "use or employ, in connection with the purchase or

sale of any security . . . any manipulative or deceptive devic e

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or contrivance in contravention of such rules and regulations as

the [SEC] may prescribe ." 15 U .S .C . § 78j(b) ; see also 17

C .F .R . § 240 .IOb-5 (Rule lOb-5) . To state a claim under

section 10(b), a plaintiff must allege : "(1) a misrepresentation

or omission of material fact, (2) reliance, (3) scienter, and

(4) resulting damages ." Paracor Fin ., Inc . v . Gen . Elec .

Capital Corp . , 96 F .3d 1151, 1157 (9th Cir_ 1996) ; see also

McCormick v . Fund Am . Cos_ , 26 F .3d 869, 875 (9th Cir . 1994) .

Some forms of recklessness are sufficient to satisfy the

element of scienter in a section 10(b) action . S Nelson v .

Serwold , 576 F .2d 1332, 1337 (9th Cir . 1978) . Within the

context of section 10(b) claims, the Ninth Circuit defines

"recklessness" a s

a highly unreasonable omission [or misrepresentation],involving not merely simple, or even inexcusablenegligence, but an extreme departure from the standardsof ordinary care, and which presents a danger ofmisleading buyers or sellers that is either known tothe defendant or is so obvious that the actor must havebeen aware of it .

Hollinger V . Titan Capital Corp . , 914 F .2d 1564, 1569 (9th Cir .

1990) (en banc) (quoting Sundstrand Corp . v . Sun Chem . Corp . ,

553 F .2d 1033, 1045 (7th Cir . 1977)) . As explained by the Ninth

Circuit in In re Silicon Graphics Inc . Securities Litigation,

183 F .3d 970, 976-77 (9th Cir . 1999), recklessness, as defined

by Hollinger , is a form of intentional conduct , not merely an

extreme form of negligence . Thus, although section 10(b) claims

can be based on reckless conduct, the recklessness mus t

"reflect[] some degree of intentional or conscious misconduct ."

Id_ at 977_ The Silicon Graphics court refers to thi s

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subspecies of recklessness as "deliberate recklessness ." Id .

Plaintiffs must plead fraud with particularity, pursuan t

to Rule 9(b) of the Federal Rules of Civil Procedure . In re

GlenFed Inc . Sec . Litig . , 42 F .3d 1541, 1543 (9th Cir . 1994)

(en banc) . Rule 9(b) provides that "in all averments of fraud

or mistake, the circumstances constituting fraud or mistake

shall be stated with particularity ." The allegations must be

"specific enough to give defendants notice of the particular

misconduct which is alleged to constitute the fraud charged so

that they can defend against the charge and not just deny that

they have done anything wrong ." Semegen v . Weidner , 780 F .2d

727, 731 (9th Cir . 1985) . Pursuant to the requirements of the

Private Securities Litigation Reform Act of 1995 (PSLRA), Pub .

L . No . 104-67, the complaint must "specify each statement

alleged to have been misleading, the reason or reasons why the

statement is misleading, and, if an allegation regarding the

statement or omission is made on information and belief, the

complaint shall state with particularity all facts on which that

belief is formed ." 15 U . S . C . § 78u-4(b)(1) .

Further, pursuant to the requirements of the PSLRA, a

complaint must "state with particularity facts giving rise to a

strong inference that the defendant acted with the required

state of mind ." 15 U .S .C . § 78u-4(b)(2) . The PSLRA thus

requires that a plaintiff plead with particularity "facts giving

rise to a strong inference that the defendant acted with," at a

minimum, deliberate recklessness . Tom, ; Silicon Graphics , 183

F .3d at 977 . Facts that establish a motive and opportunity, o r

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circumstantial evidence of "simple recklessness," are not

sufficient to create a strong inference of deliberat e

recklessness . at 979 . In order to satisfy the heightened

pleading requirement of the PSLRA for scienter, plaintiffs "must

state specific facts indicating no less than a degree of

recklessness that strongly suggests actual intent ." LL

2 . Section 14

Section 14 of the Exchange Act and SEC Rule 14a-9

promulgated thereunder disallow "the solicitation of a proxy by

a statement that contains either (1) a false or misleading

declaration of material fact, or (2) an omission of material

fact that makes any portion of the statement misleading . "

Desaigoudar v . Meyer-cord, 223 F .3d 1020, 1022 (9th Cir . 2000)

(citing 15 U .S .C . § 78n(a) ; 17 C .F .R . § 240 .14a-9) . To succeed

on such a claim, a plaintiff "must demonstrate that the

misstatement or omission was made with the requisite level of

culpability ." Desaigoudar , 223 F .3d at 1022 (citing TSC Indus .,

Inc . v Northway, Inc . , 426 U .S . 438, 444 & n .7 (1976)) . The

requisite level of culpability is negligence . In re McKesson

HBOC, Inc . Sec . Litig . , 126 F . Supp . 2d 1248, 1263 (N .D . Cal .

2000) (noting that the Supreme Court had concluded that

virtually identical language contained in Section 17(a) of th e

Exchange Act does not imply any requirement of scienter) .

Pursuant to the requirements of the PSLRA, a section 1 4

claim must "specify each statement alleged to have been

misleading [and] the reason or reasons why the statement is

misleading ." 15 U .S .C . § 78u-4 . Further, such a claim mus t

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"state with particularity facts giving rise to a strong

inference that the defendant acted with the required state o f

mind ." Id .

B . Discussion

1 . Misrepresentation or Omission of Material Fac t

In order to state a claim pursuant to sections 10(b) and 14

of the Exchange Act, Lead Plaintiff must allege, inter alia , a

misrepresentation or omission of material fact . For purposes of

analysis, the class period may be broken into two time frames :

(1) from October, 1999 to March, 2000, and (2) from March, 2000

through July, 2001 .

a) Prior to March, 200 0

Lead Plaintiff alleges that, prior to March, 2000, JDS

fraudulently manipulated its revenue recognition by (1) delaying

shipments in order to inflate artificially the sales statistics

for later quarters, (2) improperly recording revenue fo r

shipments that its customers took on consignment, and (3)

shipping millions of dollars worth of goods to warehouses and

temporary storage facilities, only to take the same goods back

unopened several weeks later .

Defendants argue that Lead Plaintiff's revenue manipulation

allegations fail to meet the heightened pleading standards of

sections 10(b) and 14 in several ways : Lead Plaintiff (1) does

not allege facts associating the recognition of revenue with the

alleged fraudulent practices, and (2) fails to provide

sufficient allegations of the amount of revenue that wa s

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allegedly overstated . Both arguments are unavailing . First,

the only reasonable inference from the facts as alleged is tha t

JDS was recognizing revenue from the alleged fraudulent

practices . In fact, there is no other reasonable inference that

can be drawn from the facts alleged in the SACC .

Regarding Defendants' second argument, it is true that

factual allegations regarding approximate amounts of overstate d

revenue are required to meet the relevant pleading standards .

See In re Vantive Corp . Secs . Litig . , 283 F .3d 1079, 1091 (9th

Cir . 2002) . However, Lead Plaintiff has sufficiently met those

standards . Lead Plaintiff alleges that, during the last weekend

of each quarter from September, 1999 to June, 2000, JDS

employees at the Horsham plant sent from $1 to $3 million in

goods to temporary storage facilities, only to have those same

goods returned several weeks later . Lead Plaintiff also alleges

that, due in large part to JDS's policy of claiming revenue for

consignment shipments to several large customers, much of which

was later returned to JDS due to declining demand, JDS suddenly

announced $270 million in excess inventory in July, 2001 . Lead

Plaintiff has plead sufficient facts to support its allegations

that JDS's revenue recognition was false and misleading prior t o

March, 2000 .

b) March, 2000 and Afte r

Lead Plaintiff alleges that demand for JDS products started

a steep decline around March, 2000 . Thus, Lead Plaintiff

alleges that statements made by Defendants on April 25, 2000,

July 26, 2000, September 1, 2000, October 26, 2000, January 25 ,

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2001, and March 31, 2001 were false when made because they

overstated demand for JDS's products and/or understated

inventory buildup in. JDS's facilities . Lead Plaintiff also

alleges that Defendants vastly overstated goodwill in connection

with its acquisition of E-TEK .

In the order on the FACC, the Court ruled that additiona l

factual allegations were necessary to demonstrate that

Defendants' statements indicating strong demand and relatively

low inventory buildup were false when made . For one, the Court

ruled that Lead Plaintiff, in identifying only a few former JDS

employees who made statements regarding increased cancellations

and cost-saving measures at individual plants, had not

demonstrated that declining demand was widespread by spring,

2000 . In response, Lead Plaintiff has now identified more than

fifty confidential witnesses who worked in five of JDS's eight

North American manufacturing plants, all of whom confirm that

demand for JDS products decreased dramatically in early 2000 .

Lead Plaintiff's SACC also includes specific allegations of

substantial order cancellations, decreased demand, and cost-

cutting strategies such as large-scale layoffs in JDS's dual

corporate headquarters in San Jose and Ottawa, as well as a

company-wide "re-alignment plan" aimed at cutting costs that wa s

first discussed in June, 2000 .

In support of its allegations, Lead Plaintiff relies on the

Pitre email, which it did not include in the FACC . Defendants

argue that a passage in the Pitre email not cited by Lead

Plaintiff, which states that twenty-five percent growth "is a

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foregone conclusion," refutes Lead Plaintiff's argument .

However, that argument is unavailing . The passage cited b y

Defendants does not alter the fundamental message of the email -

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re-examining given the decline in demand for the company' s

1products .

Defendants argue further that Lead Plaintiff's amended

allegations of decline in demand company-wide are deficient

because they cannot account for large increases in workforce an d

facilities during the class period . However, Lead Plaintiff

points out that JDS's expansion was due in large part to its

purchases of E-TEK and SDL . In any event, Lead Plaintiff argue s

that the facilities from which its confidential witnesses

reported declining demand constituted sixty percent of JDS's

square footage in June, 2000, and almost fifty percent in June,

2001, the month before the class period ended . Lead Plaintiff

has plead sufficient facts to support its allegations that

Defendants' statements that demand for JDS products remained

strong after March, 2000 were false when made .

Lead Plaintiff has also plead sufficient facts to support

its allegations that Defendants' statements regarding inventory

balances were false when made . In the order on the FACC, the

Court ruled that Lead Plaintiff's allegations that Defendants'

statements reflecting inventory balances were false when made

did not state a claim because the FACC failed to allege that

inventory exceeded reasonably foreseeable future demand . Lead

Plaintiff cures that deficiency in the SACC by including, inte r

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alia , allegations relating to JDS's "no inventory" policy . The

SACC alleges that, due to the nature of the technology that it

produced, JDS manufactured products to each customer's unique

specifications ; inventory that was sent back by customers was by

definition excess because JDS could not subsequently sell it to

new customers . In other words, the reasonably foreseeable

future demand for products returned by customers or manufacture d

for orders that were subsequently canceled was effectively zero .

Due to these circumstances, Lead Plaintiff alleges that JDS had

an official policy to write off all inventory in excess of six

months of supply . In contravention of that policy, by June,

2000, JDS had more than a one-year supply of inventory at its

San Jose headquarters alone and excess inventory buildups at its

remaining manufacturing plants as well .

Moreover, Lead Plaintiff alleges that JDS's statement for

the third quarter of 2001, dated March 31, 2001, included an

inventory balance of over $670 million (none of which was

disclosed as excess), a thirty-six percent increase over the

previous quarter . Shortly thereafter, on July 26, 2001, JDS

suddenly declared that $270 million of its inventory, or almost

fifty percent, was excess . JDS's write-off of such a

significant portion of its inventory over only one quarter, when

Lead Plaintiff alleges excess inventory buildup over the entire

previous year, creates a strong inference that Defendants'

statements regarding inventory balances were false when made .

2 . Requisite Mental Stat e

In order to state a claim pursuant to sections 10(b) and 1 4

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of the Exchange Act, Lead Plaintiff must further allege that

Defendants acted with the requisite mental state : recklessnes s

under-section 10(b) and negligence under section 14 . Here, Lead

Plaintiff contends that Defendants had actual knowledge of the

falsity of their statements regarding demand for JDS products

and inventory balances . To support this claim, Lead Plaintiff

relies on allegations of sales by Defendants of large amounts of

JDS stock during the class period, the Redbook accounting system

by which all Defendants knew demand and sales forecast figures

that were updated weekly, the Pitre email, and the Light Reading

article on Defendant Kalkhoven in which he allegedly admits

forecasting the market downturn prior to his semi-retirement i n

May, 2000 .

Suspicious stock sales by corporate insiders may constitute

circumstantial evidence that they acted with the requisite

mental state . Silicon Graphics , 183 F .3d at 986 . In evaluating

the suspiciousness of stock sales, courts should consider, inter

alia , three factors : (1) the amount and percentage of shares

sold ,

(2) the timing of sales, and (3) consistency with prior trading

history . Tci . Lead Plaintiff alleges that JDS acquired E-TEK in

late June, 2000 and over-stated its goodwill by $13 billion ,

just in time to inflate artificially its financial status for

the end of fiscal year 2000 . As a result, JDS stock was selling

at near an all-time high ($117 .41 per share on. August 31, 2000

compared to $84 .19 on May 30) . Lead Plaintiff then points to

the Pitre email, sent on August 20, 2000 to JDS upper-leve l

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management employees, that alludes to "all of the recent demand

changes over the past few weeks" ; Lead Plaintiff alleges that,

at the very latest, Defendants and other upper-level management

knew in mid-August of demand problems that had surfaced over the

previous month . While the SACC does not contain information

regarding Defendants' stock sales for time periods prior to the

class period, Lead Plaintiff does highlight stock sales made by

Defendants from July 31 through August 31, 2000, comparing them

to stock sales by Defendants earlier in the class period, when

demand was either healthy or just beginning to decline . During

that month alone, Kalkhoven sold 1,312,500 shares of JDS stock,

more than he had sold in the previous nine months combined ;

Muller sold 355,000 shares, almost twice as many as he had sold

in the previous nine months ; and Straus sold over 1,400,000

shares when he had sold less than 80,000 shares of JDS stock

over the prior nine months . Defendants made hundreds of

millions of dollars in these transactions .

While the Defendants' stock sales figures alleged in the

SACC are not different than those cited in the FACC, Lead

Plaintiff now posits a new argument and presents new evidence in

support of it . In the order on the FACC, the Court ruled that

Lead Plaintiff, by simply alleging that Defendants sold almost

all of their JDS stock shares during the class period, had not

shown that Defendants' stock sales were suspicious . Lead

Plaintiff's argument failed because it relied on such an

unusually long class period . The SACC cures this deficiency by

alleging that Defendants' sales of large amounts of JDS stoc k

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from July 31 through August 31, 2000 were suspicious as compared

to sales during the previous months of the class period . In

support of this claim, Lead Plaintiff points to the Pitre email,

sent in August, 2000, which indicates that Defendants had actual

knowledge of declining demand during that particular time

period .

Along with the Pitre email, Lead Plaintiff posits th e

Redbook accounting system, which was accessible to all upper-

level management in JDS, as proof that Defendants had actua l

knowledge of declining demand and increased excess inventory

that started in spring, 2000 . "The most direct way to show both

that a statement was false when made and that a party making th e

statement knew that it was false is via contemporaneous reports

or data, available to the party, which contradict the

statement ." Nursing Home Pension Fund v . Oracle Corp . , 380 F .3d

1226, 1230 (9th Cir . 2004) . Lead Plaintiff pleads facts

sufficient to support claims that demand was declining an d

excess inventory was accumulating company-wide starting in

spring, 2000, that this information was recorded and distribute d

weekly to upper-level management at JDS, and that Defendants had

access to these reports .

Finally, the SACC identifies the article in Light Reading _

This, taken together with allegations of suspicious stock sales

by Defendants and allegations that Defendants knew of declining

demand for JDS products and increases in excess inventory at JDS

facilities, creates a strong inference that Kalkhoven, Straus,

Muller and Abbe all knowingly made false statements . S id . a t

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1234 ("Considered separately, Plaintiffs' allegations may not

create a strong inference of scienter . However, we must

consider 'whether the total of plaintiffs' allegations, even

though individually lacking, are sufficient to create a strong

inference that defendants acted with deliberate or conscious

recklessness .'") .

II . Sections 11 and 12(a)(2) of the Securities Ac t

A . Pleading Standard

Defendants argue that Lead Plaintiff's Securities Act

claims should be dismissed because, as amended, they fail to

meet the particularity pleading requirement of Federal Rule of

Civil Procedure 9(b) . In the order on the FACC, the Court

rejected Defendants' argument that the Securities Act claims

should be governed by the heightened pleading standards of Rule

9(b) because they sounded in negligence, not fraud . However,

Defendants contend that the claims as amended in the SACC do

sound in fraud .

Many of the allegations in the SACC sound in fraud .

However, the claims under sections 11 and 12(a)(2) of the

Securities Act rely, as they did in the FACC, on allegations

that the individual Defendants failed to conduct "reasonable

investigation," to "reasonably assure that [the relevant]

statements were true," and "failed to possess reasonable grounds

for the belief that the [relevant] statements" were true . See

Schwartz v . Celestial Seasonings . Inc . , 124 F .3d 1246, 1252

(10th Cir . 1997)(emphasizing similar language in concluding that

section 11 claims did not sound in fraud) .

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Furthermore, the SACC's causes of action under sections 11

and 12(a)(2) of the Securities Act expressly disclaim "any

allegations based on fraud or deliberate recklessness ." While

the SACC does allege that Defendants acted with scienter in

violating section 14 of the Exchange Act, Lead Plaintiff is

permitted to plead its claims in the alternative in this manner .

Fed . R . Civ . P . 8(e)(2) . The Court rules, as it did in the

order on the FACC, that Lead Plaintiff's claims under sections

11 and 12(a)(2) of the Securities Act do not sound in fraud, and

thus are not required to meet the particularity pleading

standards in Rule 9(b)1 The SACC claims under sections 11 and

12(a)(2) are sufficient to meet the notice pleading standard of

Federal Rule of Civil Procedure 8, and Defendants' motions to

dismiss these claims are therefore denied .

However, Defendant Kalkhoven's motion to dismiss Lead

Plaintiff's second cause of action against him for violation of

section 11 on behalf of the E-TEK sub-class is granted . Section

11 provides civil liability for all individuals who sign a

registered SEC statement, "In case any part of the registration

statement, when such part became effective , contained an untrue

statement of a material fact or omitted to state a material fact

required to be stated therein . . ." 15 U .S .C . § 77k (emphasis

added) . Lead Plaintiff concedes that Defendant Kalkhoven did

not sign the May 31, 2000 SEC statement that was declare d

'-Defendants' motion for leave to file a motion for partialreconsideration of this holding in the order on the FACC isdenied .

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effective ; Lead Plaintiff argues rather that Defendant Kalkhoven

signed the original February 11, 2000 proxy-prospectus statement

that also contained false and misleading statements . However,

because the February 11 statement did not become effective,

Defendant Kalkhoven is not liable under section 11 for signing

it . Defendant Kalkhoven's motion to dismiss Lead Plaintiff's

second cause of action against him is granted . Because

amendment would be futile, the SACC's second claim for relief

against Defendant Kalkhoven is dismissed with prejudice .

B . Statute of Limitation s

Defendants further argue that Lead Plaintiff's newly-

alleged revenue recognition claims under the Securities Act that

are based on the E-TEK and OCLI registration statements are

time-barred . The FACC did not contain allegations of improper

recognition of revenue in the registration statements .

However, the allegations in the SACC relate back to the

timely-filed FACC because they arise from the same conduct,

transactions or occurrences alleged in the FACC . Fed . R . Civ .

P . 15(c)(2) . Defendants were thus put on sufficient notice of

Lead Plaintiff's allegations in a timely manner, which is all

that the law requires . Bee SEC v . Se board Corp . , 677 F .2d

1301, 1314 (9th Cir . 1982) . Defendants' motion to dismiss Lea d

Plaintiff's claims under sections 11 and 12(a)(2) on these

grounds is denied-

III- Sections 20A and 20(a) of the Exchange Act and Section15 of the Securities Ac t

In the order on the FACC, the Court dismissed with leave t o

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amend Lead Plaintiff's claims under sections 20A and 20(a) of

the Exchange Act and section 15 of the Securities Act against

Defendants Straus, Muller, Abbe and Kalkhoven because the FACC

failed to allege sufficiently the requisite underlying primary

violations of the respective Acts . In this motion, Defendants

do not posit independent arguments as to why Lead Plaintiff's

claims under sections 20A, 20(a) and 15 should be dismissed ;

they instead rely on their arguments that Lead Plaintiff has

again failed to allege adequately underlying violations .

However, because the Court rules that the SACC has plead facts

sufficient to support claims under sections 10(b) and 14 of the

Exchange Act and sections 11 and 12(a)(2) of the Securities Act,

the Court denies Defendants' motions to dismiss Lead Plaintiff' s

claims here .

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Case 4 :02-cv-01 486 Document 237 Filed 01/06/2005 Page 24 of 24

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CONCLUSION

For the foregoing reasons, the Court DENIES Defendants JDS,

Muller, Straus and Abbe's motion to dismiss (Docket No . 199) in

its entirety . Defendants JDS, Muller, Straus and Abbe's motion

for leave to file a motion for partial reconsideration (Docket

No . 223) is also DENIED . Defendant Kalkhoven's motion t o

dismiss (Docket No . 195) is GRANTED in part and DENIED in part .

Lead Plaintiff's second cause of action against Defendant

Kalkhoven is dismissed with prejudice . Defendant Kalkhoven's

motion to dismiss all other causes of action alleged in the SACC

is DENIED . A case management conference will be held on March

4, 2005 , at 1 :30 p .m . A joint case management statement shall

be filed by the parties one week before the conference .

IT IS SO ORDERED .

Dated : 1/6/05

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Is! CLAUDIA WILKENCLAUDIA WILKENUnited States District Judge

EXHIBIT X