auc 3 1 2009 - keller rohrback llp · auc 3 1 2009 inthe unitedstatesdistrictcourt...

ATLANTA DIVISION

IN RE SCIENTIFIC-ATLANTA, INCSECURITIES LITIGATION

CIVIL ACTION NO .1 :01-CV-1950-RWS

follows :

1 . The Court approves, as to form and content, the Notice of Pendency

pursuant to the order entered on September 7, 2007, as well as valid, due, and

RED IN CHAMBERS

A U C 3 1 2009

IN THE UNITED STATES DISTRICT COURT J'~'~j~'~ ~ ~`j~`l ' ~N' C I e r kDeputy ClerkFOR THE NORTHERN DISTRICT OF GEORGIA ~l/ ~~`

[ ~] ORDER AUTHORIZING ISSUANCE OFNOTICE TO CLASS OF PENDENCY OF CLASS ACTION

AND NOW, this 344ay of , 2009, upon consideration of

"Plaintiffs' Unopposed Motion for Approval of Notice to Class of Pendency of

Class Action" and any response thereto, it is hereby ORDERED and DECREED as

of Class Action (the "Notice") and the Summary Notice of Pendency of Class

Action (the "Summary Notice") attached hereto as Exhibits A and B, respectively .

The Court finds that the mailing, distribution and publication of the Notice and the

Summary Notice in the manner and form set forth in Paragraph 2 of this Order

constitute the best notice that is practicable under the circumstances of the

pendency of this action and the certification of the plaintiff class (the "Class")

Case 1:01-cv-01950-RWS Document 382 Filed 08/31/2009 of 5

2

sufficient notice to all persons entitled thereto and complies fully with the

requirements of Fed. R. Civ. P. 23, the Constitution of the United States, and any

other applicable law .

2. Chitwood Harley Harries LLP and Keller Rohrback L.L .P . ("Class

Counsel") are hereby authorized to retain The Garden City Group, Inc. to act as

Notice Administrator to supervise and administer the notice procedures, as well as

the processing of requests for exclusion and any future claims, as more fully set

forth below :

(a) Not later than twenty (20) days after entry of this Order (the

"Notice Date"), Class Counsel shall cause a copy of the Notice to be mailed by

United States first class mail to all nominees contained in The Garden City Group,

Inc .'s proprietary stockbroker database .

(b) All banks, brokerage firms and other nominees for a beneficial

owner who purchased Scientific-Atlanta common stock or sold put options are

directed within seven (7) days after receipt of the Notice, either (i) to forward a

copy of the Notice to all such beneficial owners, or (ii) to provide a list of names

and addresses of such beneficial owners to Plaintiffs' Notice Administrator, The

Garden City Group, Inc., which shall then provide the Notice by mail to such


Scientific-Atlanta common stock purchased, the date(s) of each such purchase, and

persons . Nominees will be reimbursed solely for their reasonable out-of-pocket

expenses incurred in providing the Notice to persons for whom they acted .

(c) Not later than seven (7) days after the Notice Date, Class

Counsel shall cause the Summary Notice to be published once in the Wall Street

Journal and Investor's Business Daily. .

(d) Not later than seven (7) days after the Notice Date, Class

Counsel shall cause the Notice and Summary Notice to be made available on a

dedicated website, www .sfastocksuit.com. The Notice and Summary Notice shall

also be made available on Class Counsel's respective websites .

(e) Class Counsel shall serve upon Defendants' Counsel and file

with the Court proof of such publication and mailing .

3 . Class members who do not wish to participate in this action may

request to be excluded from the Class . Class members requesting exclusion shall

provide their request in writing and postmark it on or before 92009 [75

days after the Notice Date] . The request shall include the Class member's name

and address and the caption and number of this litigation, shall state that the Class

member wishes to be excluded from the Class, shall list the number of shares of


Craig G. Harley, Esq. Juli E. Farris, Esq .Meryl W. Roper, Esq. KELLER ROHRBACK, L.L.P.CHITWOOD HARLEY HARNES LLP 1201 Third Avenue, Suite 3200

Plaintiffs' Class CounselPlaintiffs' Class Counsel

4. Class members requesting exclusion from the Class will not be bound

price(s) paid for the purchase(s), and shall list the date(s) and price(s) of sale(s), if

any, of Scientific-Atlanta common stock . If the Class member sold put options,

the request for exclusion shall list the number of shares of Scientific-Atlanta put

options sold, the date(s) of each sale, and price(s) paid for the put option(s), and

shall list the date(s) and price(s) of the exercise(s), if any, of such put options . All

requests for exclusion must be mailed to the following :

Claims AdministratorIn re Scientific-Atlanta, Inc . Securities Litigation

c/o The Garden City Group, Inc .P.O. Box 9391

Dublin, OH 43017-4291

and

2300 Promenade II1230 Peachtree Street, N .E .Atlanta, GA 30309Telephone : (404) 873-3900

Seattle, WA 98101-3052Tel: (206) 623-1900

by any judgment entered in this action after their exclusion notice is received, will

4


5

not be able to participate in the proceeds of any judgment, settlement or other

recovery that may be obtained on behalf of the Class, and will be free to pursue

whatever legal rights they may have at their own expense .

5 . Class members who have not requested exclusion in the time and

manner set forth in the Notice shall be bound by all orders and judgments entered

in this action, whether favorable or unfavorable .

SO ORDERED THIS .3/.,,Z''DAY OF , 2009.

7~HONORAB E RICHARD W. TORYUNITED STATES DIST T JUDGE


K Clerk

Deputy Clerk

NOTICE OF PENDENCY OF CLASS ACTION

1Questions? Call 1-888-250-5832 Toll Free, or Visit www .sfastocksuit.com

UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

IN RE SCIENTIFIC-ATLANTA, INC. CIVIL ACTION NO.SECURITIES LITIGATION 1 :01-CV-1950-RWS

FILED ~~4 CHAMBERSi I .S .D . C' . axlanw

AUK 3 12009

If you purchased or otherwise acquired the securities ofScientific-Atlanta, Inc. ("SA") (ticker symbol : "SFA")between January 18, 2001, and August 16, 2001, inclusiveand retained said securities on or after July 19, 2001, or ifyou sold put options of SA between January 18, 2001, andAugust 16, 2001, inclusive, which options were exercisedon or after July 19, 2001, your interests could be affected .

A federal court authorized this notice . This is not a solicitation from alawyer.

• This lawsuit concerns whether you paid too high a price for SA securities orsold put options at an exercise price that was too high . The Plaintiffs claimthat SA and two of its officers misled investors about demand for SA'sproducts and engaged in accounting practices that were contrary toGenerally Accepted Accounting Principles in violation of federal securitieslaws. Defendants deny the claims in the lawsuit . The parties disagree onliability and damage issues . See Question 4 below for a more detailedexplanation .

Case 1:01-cv-01950-RWS Document 382-2 Filed 08/31/2009 Page 1 of 11

YOUR LEGAL RIGHTS AND OPTIONS AT THIS TIME

Do NOTHING You will be bound by the result of this lawsuit . Youmay receive compensation if the case is successful andif you are an eligible member of the Class . You willreceive nothing if the case is unsuccessful .

EXCLUDE YOURSELF You will not be bound by the results of this lawsuit . Ifit is successful, you will not receive any payment . Thisis the only option that allows you to potentiallyparticipate in any other lawsuit against Defendantsbased on the legal claims in this case .


• Your legal rights are affected whether you act or don't act . Read this noticecarefully .

• The right to exc lude yourse lf ("opt out" from this lawsuit is exp lained inthis notice . The deadline to opt out i s c .^ "9

• Further information regarding this case may be obtained by contactingPlaintiffs' Co-Lead Counsel :

Craig G. HarleyMeryl W. RoperChitwood Harley Harnes LLP1230 Peachtree Street, NE, Suite 2300Atlanta, GA 30309Telephone: (404) 873-3900

Or

Juli E . Farris


BASIC INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Page --

1 .2 .3 .4 .5 .6 .

What do I gain if I remain in the Class?What am I giving up to stay in the Class?

Keller Rohrback, L.L .P .1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Tel : (206) 623-1900

WHAT THIS NOTICE CONTAINS

Why did I get this Notice?Who is a Member of the Class?What is this lawsuit about?Why is this a class action?

EXCLUDING YOURSELF FROM THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page --

7. How do I exclude myself from the case?8. If I do not exclude myself, can I sue Defendants

for the same thing later?9. If I exclude myself, can I get money if there is a

verdict or settlement?

THE LAWYERS REPRESENTING YOU . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Page --10 . Do I have a lawyer in this case?11 . How will the lawyers be paid?

IF You Do NOTHING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Page --12. What happens if I do nothing at all?

GETTING MORE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Page --13 . How do I obtain more information about the case?

SPECIAL NOTICE TO SECURITIES BROKERSAND OTHER NOMINEES . . . . . . . . . . . . . .. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page -

INQUIRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page -

3Questions? Call 1-888-250-5832 Toll Free, or Visit

www.sfastocksuit.com


4Questions? Call 1-888-250-5832 Toll Free, or Visit www.sfastocksuit.com

BASIC INFORMATION

1. Why did I get this Notice?

You or someone in your family may have purchased securities ofScientific-Atlanta, Inc . or sold put options ("SA securities") asdescribed on the first page of this Notice between January 18, 2001and August 16, 2001 (inclusive) . The Court in charge of the case is theUnited States District Court for the Northern District of Georgia,Atlanta Division, and the case is known as In re Scientific-Atlanta, Inc .Securities Litigation, Master File No . 1 :01-CV-1950 RWS. U.S .District Judge Richard W. Story is in charge of this class action . Thepeople who sued are called Plaintiffs, and the company and individualsthey sued Scientific-Atlanta, Inc ., James F . McDonald and WallaceG. Haislip are called Defendants .

The Court authorized this notice because you have a right to knowabout this class action lawsuit and about all of your options . Thispackage explains the lawsuit, your legal rights, and what you must doto preserve your legal rights .

2. Who is a Member of the Class?

By Order of September 7, 2007, the Court has defined the Class asfollows :

All persons who purchased or otherwise acquiredthe securities of Scientific-Atlanta, Inc . ("SA")between January 18, 2001, and August 16, 2001,inclusive and retained said securities on or afterJuly 19, 2001, or who sold put options of SAbetween January 18, 2001, and August 16, 2001,inclusive, which options were exercised on or afterJuly 19, 2001 (the "Class") . Notwithstanding theforegoing, the following persons and entities areexcluded from the Class : (i) the Defendants to thisaction; (ii) the officers and directors of SA ; (iii) any


5Questions? Call 1-888-250-5832 Toll Free, or Visit www.sfastocksuit.com

entity in which any Defendant or officer or directorof SA has or had a controlling interest ; and (iv) thelegal affiliates, representatives, heirs, controllingpersons, successors and predecessors in interest orassigns of any of the persons or entities identified in(i), (ii) or (iii) above .

3. What is this lawsuit about?

Plaintiffs filed a complaint against Defendants . Plaintiffs madethe following allegations in the Complaint :

The Complaint avers that, because of [issuesconcerning cancelled orders and cablecompanies' reductions in spending], managementbecame concerned about the Company's ability tomeet market expectations and what effect thedeclining demand would have on the stock price .Allegedly because of this concern, SA sought toinduce customers to increase substantially theirpurchases before they would, in the normalcourse, otherwise purchase SA's products . Thispractice, commonly referred to as " channelstuffing" has the effect of shifting earnings intoearlier quarters to the detriment of earnings inlater quarters. The Company encouraged sales bygiving special discounts, offering longer paymentterms, and giving credits to customers whoagreed to receive and store excess inventory inwarehouses. According to Plaintiffs, SAconcealed these practices not only by failing todisclose the activity but also by violating therevenue recognition policies outlined in theGenerally Accepted Accounting Principles("GAAP"), notably by invoicing for product theCompany had not delivered to the customers .During this period, SA did nothing to inform


shareholders of the alleged difficulties or thechannel stuffing and accounting practices . . . .

In addition, Plaintiffs assert that Defendantsshould have disclosed the fact that demand forSA products was declining and that SA wascutting back production . . . .

On July 19, 2001, SA announced that theCompany failed to meet revenue forecasts forfiscal year 2001 due to decreased demand for itsproducts. At the same time, SA reduced itsearnings forecasts for the first quarter of fiscalyear 2002. As a result of the announcement, theprice of SA common stock plummeted, droppingfrom $35 .08 per share to $22 .80 per share. OnAugust 16, 2001, Defendants filed their Form 10-K for fiscal year 2001 with the SEC, and thefiling reported the reduced demand andcustomers' accumulated inventories . The price ofSA stock fell from $25 .01 per share to $21 .24 pershare .

Defendants deny all of Plaintiffs' allegations and claims . Defendants'position is that the lawsuit has no merit and the evidence does notsupport Plaintiffs' claims . Defendants believe the evidence shows thatSA's accounting practices and financial statements were fully incompliance with Generally Accepted Accounting Principles and thatSA did not engage in any improper sales practices. Defendants furtherbelieve that the evidence shows there public statements were accurateand made in good faith . Defendants deny they engaged in anymisconduct

4. Why is this a class action?

In a class action, one or more persons or entities called ClassRepresentatives sue on behalf of all persons and /or entities who have




similar claims . These persons and/or entities are referred tocollectively as a Class, or individually, as Class Members . In a classaction, one court resolves all of the issues for all Class Members,except for any Class Members who exclude themselves from the Class .

5. What do I gain if I remain in the Class?

Unless you choose to exclude yourself, you will remain in the Class . Ifyou remain in the Class and the Class receives a recovery throughjudgment or settlement, you will be entitled to a share of the recovery,and you may object to any proposed settlement that you believe isinadequate. If the case is resolved in the Class's favor, an additionalnotice explaining how recoveries are determined will be providedbefore any distribution. If the case is not resolved in the Class's favor,you will receive nothing .

6. What am I giving up to stay in the Class?

Unless you choose to exclude yourself, you will remain in the Class . Ifthe case is resolved at or before trial, you and all Class Members willrelease or have finally decided all claims against the Defendantsrelated to your S-A investments during the Class Period (and you willnot be able to sue, continue to sue, or be part of any other lawsuitasserting those claims). All of the Court's orders will apply to you andlegally bind you .

EXCLUDING YOURSELF FROM THE CASE

7. How do I exclude myself from the case?

If you want to preserve your right to sue or continue to sue Defendantson your own regarding the legal issues in this case, then you must takesteps to exclude yourself from this class action -sometimes referredto as "opting out" of the Class .

To exclude yourself from this case, you must send a letter by mailstating that you want to be excluded from In re Scientific-Atlanta, Inc.


and

Plaintiffs' Class Counsel Plaintiffs' Class Counsel

8.


Securities Litigation, Master File No. 1 :01-CV-1950 RWS. Be sure toinclude your name, address, telephone number, and your signature,along with information regarding your purchases and/or sales of S-Asecurities and sale/exercise of S-A put options in the period fromJanuary 18, 2001 to August 16, 2001 . You must mail your exclusionrequest, postmarked no later than 49erz.IA~,. J( , 2009, to :



Dublin, OH 43017-4291

Craig G. Harley, Esq .Meryl W. Roper, Esq .CHITWOOD HARLEY HARNES LLP2300 Promenade II1230 Peachtree Street, N .E .Atlanta, GA 30309

Juli E. Farris, Esq .KELLER ROHRBACK, L .L .P .1201 Third Avenue, Suite 3200Seattle, WA 98101-3052

You can't exclude yourself on the phone or by e-mail . If you ask to beexcluded, you will not receive a settlement payment if the case isresolved in favor of the class, and you cannot object to the settlement .You will not be legally bound by anything that happens in this lawsuit .You may be able to sue (or continue to sue) Defendants in the future .

If I do not exclude myself, can I sue Defend ants for the same thinglater?

Unless you exclude yourself, you give up any right to sue Defendantsfor claims related to your S-A investment during the Class Period . Ifyou have a pending lawsuit, speak to your lawyer in that case



immediately. You may need to exclude yourself from this Class tocontinue your own lawsuit. Remember, the exclusion deadline is

., y , 2009 .

9. If I exclude myself, can I get money if there is a verdict orsettlement?

No. If you exclude yourself, you cannot receive money if there is averdict in favor of the Plaintiffs or a settlement . But you may be ableto sue, continue to sue, or be part of a different lawsuit againstDefendants . If you elect to opt out, please be advised thatimportant deadlines to your right to sue may soon expire. Youmay wish to consult a lawyer immediately to preserve your rights .

THE LAWYERS REPRESENTING YOU

10. Do I have a lawyer in thi s case?

The Court approved the law firms of Chitwood & Harley, LLP, n/k/aChitwood Harley Harries LLP, and Keller Rohrback LLP to representyou and the other Class Members . The lawyers in these firms arecalled Plaintiffs' Counsel or Class Counsel . Class members will not becharged by these lawyers . If you want to be represented by your ownlawyer, you may hire one at your own expense . If you elect to excludeyourself from the case, Class Counsel cannot represent you .

11 . How will the lawyers be paid?

Plaintiffs' Counsel have expended considerable time litigating this caseon a contingent fee basis and have advanced expenses with theexpectation that if they are successful, they would receive fees and bereimbursed for their expenses from a verdict or settlement . If Plaintiffsrecover, either through a verdict or a settlement, Plaintiffs' Counselwill ask the Court to award reasonable attorneys' fees and reimbursetheir expenses . Any amounts awarded by the Court will come out ofthe funds available to the Class. Class members will be informed of afee request by Counsel and will have an opportunity to comment or


object. If the action is unsuccessful, Counsel will not be paid fees orhave their expenses reimbursed. YOU WILL NOT BEPERSONALLY RESPONSIBLE FOR ATTORNEYS' FEES ORCOSTS UNDER ANY CIRCUMSTANCES . There will be no cost toyou except for a deduction from your share of any ultimate recovery .

IF You Do NOTHING

12 . What happens if I do nothing at all?

If you do nothing, you will remain in the Class . If you do not excludeyourself, you will not be able to start a lawsuit, continue with a lawsuit,or be part of any other lawsuit against Defendants regarding the legalissues in this case .

GETTING MORE INFORMATION

13. How do I obtain more information about the case?

You can: (1) call 1-888-250-5832 toll free ; (2) write to Claims Administrator,In re Scientific-Atlanta, Inc . Securities Litigation, c/o The Garden City Group, Inc .,P.O . Box 9391, Dublin, OH 43017-4291 or (3) visit the website atwww.sfastocksuit.com, where you will find answers to common questions about thecase, plus other information to help you determine whether you are a ClassMember.

SPECIAL NOTICE To SECURITIES BROKERS AND OTHER NOMINEES

If you purchased S-A securities or sold put options during the Class Period asnominee for a beneficial owner, then within ten (10) days after you receive thisNotice, you must either : (a) send a copy of this Notice by first-class mail to all suchbeneficial owners ; or (b) provide a list, electronically if possible, of the names andaddresses of such beneficial owners to the Claims Administrator :




11Questions? Call 1-888-250-5832 Toll Free, or Visit www .sfastocksuit .com


Dublin, OH 43017-4291

If you chose option (a) above, you may request enough Notices from theClaims Administrator (at no charge) to complete your mailing. You may seekreimbursement of your reasonable expenses actually incurred in complying withthese directives, subject to approval of Plaintiffs' Counsel or the Court . Allcommunications concerning this matter should be addressed to the ClaimsAdministrator.

INQUIRIES

All inquiries concerning this Notice, or any other questions by ClassMembers should be directed to the Claims Administrator or the Attorneys listedabove.

PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE

DATED: 3 , 2009 BY ORDER OF THE DISTRICT COURT :RICHARD W. STORY, JUDGE


rF Il .ED i N CHAMBERS!1 .s .D.C . Atlanta

A l.I ll 3 12 D.J0

EXHIBIT B .iAr~' -,~ ~-~~~T`~v, C 'e '~y.G%~~r~T `G~f,~~ beauty Clerk

IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

IN RE SCIENTIFIC-ATLANTA, )INC. SECURITIES LITIGATION ) CIVIL ACTION FILE

~ NO . 1 :01-CV-1950-RWS

SUMMARY NOTICE OF PENDENCY OF CLASS ACTION,

TO: ALL PERSONS WHO PURCHASED OR OTHERWISE ACQUIRED THESECURITIES OF SCIENTIFIC-ATLANTA, INC . (TICKER SYMBOL :"SFA") BETWEEN JANUARY 18, 2001 AND AUGUST 16, 2001,INCLUSIVE AND RETAINED SAID SECURITIES ON OR AFTERJULY 19, 2001, OR WHO SOLD PUT OPTIONS OF SCIENTIFIC-ATLANTA, INC. BETWEEN JANUARY 18, 2001, AND AUGUST 16,2001, INCLUSIVE, WHICH OPTIONS WERE EXERCISED ON ORAFTER JULY 19, 2001 .

YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States

District Court for the Northern District of Georgia, Atlanta Division, that a lawsuit

is now pending in that Court against Scientific-Atlanta, Inc . ("S-A" or the

"Company") and two of its current or former officers . The lawsuit alleges that S-A

and two of its officers misled investors about demand for the Company's products

and engaged in accounting practices that were contrary to Generally Accepted

Accounting Principles ("GAAP") in violation of federal securities laws, and that as

Questions? Call 1-888-250-5832 Toll Free, or Visit www .sfastocksuit.com1


a result, the Company's shareholders were damaged. Defendants deny the claims

in the lawsuit. The lawsuit will be decided by a jury sitting before the Honorable

Richard W. Story, United States District Judge .

If you purchased S-A common stock during the period beginning January

18, 2001 through and including August 16, 2001, or sold put options beginning

January 18, 2001 through and including August 16, 2001 that were exercised on or

after July 19, 2001, your rights may be affected by this Litigation and any

judgment rendered by the jury. If you have not received a copy of the Notice of

Pendency of Class Action, you may obtain copies by visiting the website at

www.sfastocksuit.com, or writing to the Claims Administrator :



Dublin, OH 43017-4291

You will be bound by any judgment rendered in the Litigation unless,

postmarked on or before &cew`l.. . 5/ , 2009, you

(a) send a request to be excluded, in writing, to the Claims

Administrator at the above address ; and

(b) Mail copies of your request to the following counsel :

Craig G. Harle , Es Juli E. Farris, Es q.



Plaintiffs' Class Counsel Plaintiffs' Class Counsel


Meryl W. Roper, Esq .CHITWOOD HARLEY HARNES LLP2300 Promenade II1230 Peachtree Street, N .E .Atlanta, GA 30309

KELLER ROHRBACK, L.L.P .1201 Third Avenue, Suite 3200Seattle, WA 98101-3052

PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S

OFFICE REGARDING THIS NOTICE.

DATED: 2009

BY ORDER OF THE COURTUNITED STATES DISTRICT COURTNORTHERN DISTRICT OF GEORGIAATLANTA DIVISION


auc 3 1 2009 - keller rohrback llp · auc 3 1 2009 inthe unitedstatesdistrictcourt...

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