UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNI A

--------------------------------------- xIN RE FLEXTRONICS INTERNATIONAL, LTD . :SECURITIES LITIGATION . Case No. C-03-2102 PJH

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AFFIDAVIT OF STEPHEN J. CIRAMI IN SUPPORTOF MOTION TO DISTRIBUTE SETTLEMENT FUND S

STATE OF NEW YORK )SS . :

COUNTY OF SUFFOLK )

STEPHEN J . CIRAMI, being first duly swo rn, deposes and says :

1 . I am the Assistant Vice President of Securities Operations for The Garden

City Group, Inc . ("GCG"). Plaintiffs' Counsel retained GCG to act as the Claims Administrato r

herein, to give notice of the proposed settlement to the Class, to process all claims submitted by

Class Members in this action, to prepare the tax returns for the Settlement Fund and to distribute

the Net Settlement Fund to the Authorized Claimants . I make this affidavit in support of

Plaintiffs' application for an order (a) approving the administrative action taken by my firm in

accepting and rejecting the claims filed by Claimants herein, including the rejection of the claims

of Kenneth Balkan and Berta Balkan (Claim No. 11655), Kenneth Balkan IRA Account (Clai m

No. 11658), Allen B . Morrison and Laurie G . Morrison (Claim No. 2013983), Laurie G .

Morrison IRA Account (Claim No . 2013990), Laurent Edward Guimond (Claim No . 2120321) ,

Sally L . Gurr and Ronald M . Gurr, Trustees who filed a claim for the Sally L . Gurr Rev. Living

Trust DTD 08/28/97 (Claim No . 2082451), Hershman and Suway Partners (Claim No. 2114408) ,

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2114408), Steven E . Kay (Claim No. 2046697), and Arthur Planer (Claim No . 2025678), who

have requested this Court's review of the administrative rejection of their claims ; (b) directing

payment to GCG of its fees and all its expenses in connection with the services performed and to

be performed in giving notice to the Class, preparing tax returns for the Settlement Fund, the

processing of the Proofs of Claim, and the administration and distribution of the Net Settlement

Fund; (c) directing distribution of the Net Settlement Fund to the Authorized Claimants ; and (d)

authorizing destruction of paper copies of Proof of Claim forms one year after distribution of th e

Net Settlement Fund, and authorizing destruction of electronic copies of Proof of Claim record s

three years after distribution of the Net Settlement Fund . I have personal knowledge of the facts

stated herein .

2. A settlement of this action with Flextronics International, Ltd .

("Flextronics"), for $4,250,000 (U .S. $) was proposed pursuant to the Stipulation and Agreement

of Settlement dated July 21, 2004 (the "Stipulation") . This Court entered a Preliminary Order In

Connection With Settlement Proceedings (the "Notice Order"), dated July 28, 2004 ,

preliminarily approving the Stipulation and directing that notice of the proposed settlement b e

given to the members of the Class . As more fully described in the Affidavit of Stephen J . Ciram i

dated October 19, 2004, previously filed herein, GCG distributed the Court-approved Notice o f

Pendency of Class Action and Proposed Se tt lement , Motion For Attorneys' Fees and Settlement

Fairness Hearing (the "Notice") and Proof of Claim and Release form (the "Proof of Claim" )

(collectively with the Notice, the "Claim Packet") to potential members of the Class commencin g

on August 25, 2004. In total, GCG has mailed over 313,200 copies of the Claim Packet to

potential Class Members . As part of the initial mailing of the Notice, GCG sent Claim Packet s

to 2,853 of the largest brokerage firms, banks, institutions and other potential Class Membe r

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nominees . In response to requests from brokers and other nominees, GCG has mailed copies o f

the Claim Packet to 222,146 potential Class Members identified by such brokers and nominees ,

and has delivered 78,545 bulk copies of the Claim Packet to 21 brokerage firms who have

requested such packages to mail to their clients/beneficiaries .

3. Pursuant to the Notice, the brokers are entitled to reimbursement of thei r

reasonable expenses incurred in connection with providing notice to their beneficiaries, includin g

reimbursement of postage expenses and the cost of ascertaining the names and addresses of

beneficial owners. The brokerage firms have billed GCG a total of $140,670 .27 for

reimbursement of their expenses in connection with providing notice to their beneficiaries . At

the request of Class Counsel, GCG aggressively challenged such requests and has obtained a

$102,883 .71 reduction to the amount to be reimbursed to out-of-pocket costs of reimbursemen t

to the brokerage firms .

4. As scheduled in the Notice Order, a hearing was held on October 27, 200 4

to consider the settlement pursuant to the Stipulation. By Order and Final Judgment dated

October 29, 2004, this Court approved the Settlement as fair, reasonable and adequate .

PROCEDURES FOLLOWED IN PROCESSING CLAIM S

5. Under the terms of the Stipulation, Class Members were required to

submit a Proof of Claim in order to obtain their share of the Net Settlement Fund (the Settlement

Amount, less all attorneys' fees and expenses of the litigation approved by this Court, less al l

administration fees and expenses approved by this Court , plus interest earned on the Settlement

Fund, less taxes payable on such interest) .

6 . GCG undertook the following tasks in order to prepare to process the

Proofs of Claim: conferred with Plaintiffs Counsel to define the project and guidelines for

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claims processing ; trained staff in the specifics of the project; and developed programs for entr y

of the Class Members' identifications and their transaction information .

7. Class Members seeking to share in the Net Settlement Fund were directe d

in the Notice to submit their Proofs of Claim to :

Flextronics International, Ltd . Securities Litigationc/o The Garden City Group, Inc .

Claims AdministratorPost Office Box 9000 #6246

Merrick, NY 11566-9000

8. GCG sorted incoming mail into Proofs of Claim and administrative mail .

Claim Packets that were returned by the Post Office were reviewed for better addresses and ,

where available, new addresses were entered into the database and new Claim Packets wer e

mailed to the updated addresses. Administrative mail such as correspondence and requests fo r

forms were reviewed and appropriate responses given .

9. Over 51,000 Proof of Claim forms were received, opened and scanne d

into a database along with all submitted documentation . If the Proof of Claim form did not have

a pre-assigned claim number, it was assigned one. The information from each claim form,

including the name, address, Taxpayer I.D. or Social Security Number of the Claimant, and th e

purchase and sales transactions listed on the claim were then entered into a computerized

database . The documentation provided in support of each claim by the Claimant was reviewed

to ascertain whether the Claimant had in fact purchased or otherwise acquired Flextronic s

common stock during the period from and including January 18, 2001, through and includin g

June 4, 2002 (the "Class Period") . Claims were then reviewed to be sure they were not from th e

Defendants, any entities in which any Defendant has or had a controlling interest, the past o r

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present officers and directors of Defendants, and members of the immediate families of such

persons, each Individual Defendant's immediate family, and the legal representative, heirs ,

successors or assigns of any excluded party to the extent that the identities of such persons or

entities are known to us through the list of defendants and through the Claimant's certification o n

the Proof of Claim form . Claims were also reviewed against the list of persons requesting

exclusion .

10. GCG established internal claim codes (also known as "message codes") to

identify and classify types of claims and conditions that exist within the claims . Where a

submitted claim lacked the required filing information or documentation to substantiate the Clas s

Member's transactions during the Class Period, or was otherwise deficient, a deficiency letter

was sent to the Claimant advising him or her of the deficiency and requesting the submission o f

the appropriate documentary evidence or correction of the defect .

11 . Where a deficiency letter was sent, each Claimant was notified that unles s

the deficiency was corrected within twenty (20) days, his or her claim would be accepted only t o

the extent of the documentation supplied, or that the claim would be entirely rejected if they ha d

not supplied the required documentation or filing information for any transactions .

12. Responses to deficiency letters were carefully reviewed and evaluated . If

the response corrected the deficiency, the database was updated to reflect the accepted claim. If

the response did not cure the defect, GCG either (a) called the Claimant and advised him or her

that (i) the claim was still deficient, (ii) what was needed to cure the defect and, (iii) if the

deficiency was not corrected the claim would be rejected in whole or part, or (b) an Ineligibl e

letter was sent if the submitted response demonstrated that the Claimant was not eligible to share

in the Net Settlement Fund .

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13 . Claimants who submitted claims which showed that they were ineligibl e

to participate in the Net Settlement Fund (for example, where their claim showed that they had

suffered no Recognized Claim from their purchases of Flextronics common stock during th e

Class Period, or where their purchases were not made within the Class Period) were sent an

ineligibility letter . Claimants who submitted duplicate claims were also sent ineligibility letter s

rejecting the duplicate claims .

14. Attached hereto as Exhibit A is a copy of the forms of letters used t o

notify claimants of the deficiency in their claims or the ineligibility of their claims . The rejectio n

letter and ineligibility letter advised the claimant of his, her or its right to request this Court' s

review of our administrative determination rejecting the claim. The letter stated that th e

Claimant could request this Court's review of the rejection or determination of ineligibility o f

their claim by filing a statement in writing setting forth the reasons why they believe that the

claim was adequately submitted and eligible for payment .

CLAIMANTS OBJECTING TO GCG'S ADMINISTRATIVE DETERMINATIO N

15. In addition to the above, GCG had communications with claimants whose

claims were deemed ineligible, or otherwise deficient, and who contested this determination .

Most of these issues were satisfactorily resolved, however, there are still several claimants who

seek judicial review of GCG's determination of their claim . Specifically, nine claimants dispute

GCG's determination to reject their claims . All nine claimants had no Recognized Claim a s

calculated under the Court-approved Plan of Allocation .

16. The reason many ineligible claims were filed relates to the increasing

percentage of alleged inflation during the Class Period, even while the price of Flextronics wa s

declining over this time. The approved Plan of Allocation fixed a percentage by which th e

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market price of Flextronics common stock was allegedly artificially inflated during four separate

intervals in the Class Period: (1) for the period from January 18, 2001 through April 24, 2001,

the price is deemed to have been inflated by 1 .7%; (2) from April 25, 2001 through January 23,

2002, the price is deemed to have been inflated by 1 .8%; (3) from January 24, 2002 through

April 25, 2002, the price is deemed to have been inflated by 5 .3%; and (4) from April 26, 2002

through June 3, 2002, the price is deemed to have been inflated by 8 .6%. Thus, purchasers at an

earlier part of the Class Period paid less "inflation" as a percentage of their purchase price pai d

than the "inflation" they received as a percentage of their sales proceeds received if they sol d

later in the Class Period, even where the sale was at an overall loss . In other words, absent th e

artificial inflation their purchase price would have been less, but their sale price would have been

even lower, and they would have lost more . Thus, but for the alleged fraud, they would have los t

more than they did and in effect they benefited from the alleged misstatements and received a

gain from the alleged artificial inflation . Specifically, nine claimants in this situation dispute

GCG's determination to reject their claims . All nine claimants had no Recognized Claim a s

calculated under the Court-approved Plan of Allocation .

17. Recognized Claim amounts were calculated in accord ance with the Plan of

Allocation for claims which were properly filed and supported with adequate documentar y

evidence. Under the Court-approved Plan of Allocation, a Recognized Claim was calculated, as

stated in Section 25 of the Notice, as follows :

(i) For shares of Flextronics common stock purchased during the period

January 18, 2001 through April 24, 2001, inclusive (when the art ificial inflation was indicated to

amount to 1 .7% of the Purchase price paid), and

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(a) Sold at a loss on or before the close of trading on April 24, 2001, an AuthorizedClaimant's "Recognized Claim" shall mean 1 .7% of the purchase price paid (includingcommissions, etc .) (the "PPP") less 1 .7% of the sales proceeds received (net ofcommissions, etc .) (the "SPR") (provided the difference is a positive number, if thedifference is a negative number there is no Recognized Claim from that transaction) ;

(b) Sold at a loss during the period April 25, 2001 through January 23, 2002, an AuthorizedClaimant's "Recognized Claim" shall mean 1 .7% of the PPP minus 1 .8% of the SPR(provided the difference is a positive number, if the difference is a negative number thereis no Recognized Claim from that transaction) ;

(c) Sold at a loss during the period January 24, 2002 through April 25, 2002, an AuthorizedClaimant's "Recognized Claim" shall mean 1 .7% of the PPP minus 5 .3% of the SPR(provided the difference is a positive number, if the difference is a negative number thereis no Recognized Claim from that transaction) ;

(d) Sold at a loss during the period April 26, 2002 through June 3, 2002, an AuthorizedClaimant's "Recognized Claim" shall mean 1 .7% of the PPP minus 8 .6% of the SPR(provided the difference is a positive number, if the difference is a negative number thereis no Recognized Claim from that transaction) ;

(e) Held as of the close of trading on June 3, 2002, an Authorized Claimants "RecognizedClaim" shall mean 1 .7% of the PPP .

(ii) For shares of Flextronics common stock purchased during the period Apri l

25, 2001 through January 23, 2002 (when the artificial inflation was indicated to amount to 1 .8%

of the Purchase price paid), an d

(a) Sold at a loss during the period April 25, 2001 through January 23, 2002, an AuthorizedClaimant's "Recognized Claim" shall mean 1 .8% of the PPP minus 1 .8% of the SPR(provided the difference is a positive number, if the difference is a negative number thereis no Recognized Claim from that transaction) ;

(b) Sold at a loss during the period January 24 , 2002 through April 25 , 2002 , an AuthorizedClaimant's "Recognized Claim" shall mean 1 .8% of the PPP minus 5 .3% of the SPR(provided the difference is a positive number , if the difference is a negative number thereis no Recognized Claim from that tr ansaction) ;

(c) Sold at a loss during the period April 26, 2002 through June 3, 2002, an AuthorizedClaimant's "Recognized Claim" shall mean 1 .8% of the PPP minus 8 .6% of the SPR(provided the difference is a positive number, if the difference is a negative number ther eis no Recognized Claim from that transaction) ;

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(d) Held as of the close of trading on June 3, 2002 an Authorized Claimant's "RecognizedClaim" shall mean 1 .8% of the PPP .

(iii) For shares of Flextronics common stock purchased during the perio d

January 24, 2002 through April 25, 2002 (when the artificial inflation was indicated to amount t o

5 .3% of the Purchase price paid), and

(a) Sold at a loss during the period January 24, 2002 through April 25, 2002, an AuthorizedClaimant 's "Recognized Claim" shall mean 5 .3% of the PPP minus 5 .3% of the SPR(provided the difference is a positive number , if the difference is a negative number thereis no Recognized Claim from that transaction) ;

(b) Sold at a loss during the period April 26, 2002 through June 3, 2002, an AuthorizedClaimant's "Recognized Claim" shall mean 5 .3% of the PPP minus 8 .6% of the SPR(provided the difference is a positive number, if the difference is a negative number ther eis no Recognized Claim from that transaction) ;

(c) Held as of the close of trading on June 3, 2002, an Authorized Claimant's "RecognizedClaim" shall mean 5 .3% of the PPP .

(iv) For shares of Flextronics common stock purchased during the period Apri l

26, 2002 through June 3, 2002 (when the artificial inflation was indicated to amount to 8 .6% of

the Purchase price paid), and

(a) Sold at a loss during the period April 26, 2002 through June 3, 2002 an AuthorizedClaimant's "Recognized Claim" shall mean 8 .6% of the PPP minus 8 .6% of the SPR(provided the difference is a positive number, if the difference is a negative number ther eis no Recognized Claim from that transaction) ;

(b) Held as of the close of trading on June 3, 2002, an Authorized Claimant's "RecognizedClaim" shall mean 8 .6% of the PPP .

18 . Sales during the Class Period were matched first against any prior

holdings and then against purchases during the Class Period on a First-In-First-Out basis . To the

extent a Claimant had a gain from his, her or its overall transactions in Flextronics common

stock during the Class Period, the value of the Recognized Claim was zero . To the extent that a

Claimant suffered an overall market loss on his, her or its overall transactions in Flextronics

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common stock during the Class Period, but that loss was less than the Recognized Clai m

calculated above, then the Recognized Claim was limited to the amount of the market loss .

19. The reason for the rejection of the nine claimants who contest GCG' s

determination of No Recognized Loss as well as the history of communications with th e

claimants, are set forth in the following paragraphs :

Kenneth Balkan and Berta Balkan (Claim No . 11655) owned 23 shares ofFlextronics common stock at the beginning of the Class Period . They alsomade various purchases of Flextronics common stock during the ClassPeriod totaling 62 shares (29 shares purchased on February 13, 2001 for$35.4375 per share, and 33 shares purchased on November 29, 2001 for$25.63 per share) . They sold all 85 shares during the Class Period onMarch 4, 2002 for $16 .7435 per share . All of these transactions wereadequately documented . Mr. Balkan also filed a claim for his IRAaccount (Claim No. 11658) in which he owned 87 shares of Flextronicscommon stock at the beginning of the Class Period . He also purchased 80of Flextronics common stock during the Class Period on April 11, 2001for $20.0571 per share. He sold all 167 shares during the Class Period (56shares were sold on February 20, 2001 for $34 .2500 per share, 80 shareswere sold on February 25, 2002 for $15 .7960 per share, and 31 shareswere sold on March 4, 2002 for $16 .7435 per share) . All of these shareswere adequately documented .

The Balkan's claim is calculated under the Plan of Allocation as follows :

The 29 shares purchased on 2/13 /2001 at $35 .4375 cost $1,027 .69. ThePlan of Allocation treats 1 .7% of this amount (60.20 per share or a total of$17.47) as having been attributable to art ificial inflation. These shareswere sold (as part of a larger sale) on 3/4 /2002 at a price of $16.7435 pershare or a total of $485 .56. The Plan ofAllocation treats 5 .3% of thisamount (85 .40 per share or a total of $24.77) as having been attributable toartificial inflation . Since the artificial inflation received on the sale($24 .77) was greater than the art ificial inflation paid ($ 17.47), there is noRecognized Claim on this transaction .

The 33 shares purchased on 11/29/2001 at $25 .63 cost $845 .79. The Planof Allocation treats 1 .8% of this amount (46 .1 ¢ per share or a total of$15.22) as having been attributable to artificial inflation . These shareswere sold (as part of the larger sale) on 3/4/2002 at a price of $16 .7435 pershare or a total of $552 .54. The Plan of Allocation treats 5 .3% of thisamount (85 .40 per share or .a total of $28 .18) as having been attributable t o

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artificial inflation. Since the artificial inflation received on the sale($28 .18) was greater than the artificial inflation paid ($15 .22), there is noRecognized Claim on this transaction.

These calculations are more simply described as the Purchase Price Paid("PPP") times the percentage inflation applicable to each purchase, minusthe Sales Proceeds Received ("SPR") times the percentage inflationapplicable to each sale, equals the Recognized Claim, or (PPP X %) -(SPR X %) = RC . For the Balkans claim the calculation is :

(($1,027.69 X 1 .7%) + ($845 .79 X 1 .8%)) - (($485 .56 X 5 .3%) + ($552 .54X 5.3%) = ($17.47 + $15 .22) - ($24.77 + $28.18) = $32 .69 - $52.95 =<$20.26> (gain not loss) .

Mr. Balkan's IRA claim is similarly calculated under the Plan ofAllocation as follows :

The 80 shares purchased on 4/11/2001 at $20 .0571 cost $1,604 .57. ThePlan of Allocation treats 1 .7% of this amount (34 .1 ¢ per share or a total of$27.28) as having been attributable to artificial inflation . These shareswere sold in two transactions (matching 31 of the 80 shares sold on2/25/02 against his prior holdings on a First In First Out basis) first, 49shares were sold on 2/25/2002 at a price of $15 .7960 per share or a total of$774.00 (5 .3% of this amount or 83 .70 per share or a total of $41 .02representing artificial inflation received), and second, 31 shares were soldon 3/4/2002 at a price of $16 .7435 per share or a total of $519 .05 (5 .3% ofthis amount or 88.70 per share or a total of $27.51 representing artificialinflation received). Since the artificial inflation received on the sales($41 .02 plus $27.51 = $68 .53) was greater than the artificial inflation paid($27.28), there is no Recognized Claim on these transactions .

($1,604 .57 X 1 .7%) - (($774 .00 + $519.05) X 5 .3%) = $27 .28 - $68 .53 =<$41 .25> (gain not loss) .

Consequently, on February 11, 2005, GCG mailed two Final Notices ofIneligibility to the Balkans stating that both claims were rejected becausethey had no Recognized Claim. Mr. and Ms. Balkan responded by a letterdated February 18, 2005, disagreeing with GCG's determination for bothclaims. A GCG representative left messages for the Balkans on March 14and 15, and finally spoke with Mr . Balkan on March 18, 2005 an dexplained to him that, as described in the Plan of Allocation, his inflationpaid was less than his inflation received, which resulted in his claimshaving no Recognized Claim under the Plan of Allocation . Despite thisexplanation, the Balkans still object to GCG's determination on bothclaims. Attached hereto on a CD-ROM as Exhibit B and Exhibit C are the

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Proof of Claim forms for Mr . and Ms. Balkan, Mr. Balkan's IRA claim,and supporting documentation as well as all additional correspondencebetween GCG and the claimants .

Allen B. Morrison and Laurie G . Morrison (Claim No. 2013983) did notown any shares of Flextronics common stock at the beginning of the ClassPeriod. They purchased 210 shares of Flextronics common stock duringthe Class Period (95 shares were purchased on April 12, 2001 for$1,823 .05 ($19 .19 per share), 20 shares were purchased on August 2, 2001for $571 .59 ($28 .5797 per share), 40 shares were purchased on September25, 2001 for $654 .40 ($16.3601 per share), 55 shares were purchased onFebruary 26, 2002 for $819 .80 ($14 .9054 per share)) . They sold all 210shares during the Class Period (40 shares were sold on October 12, 2001for $905.10 ($22 .6276 per share), 30 shares were sold on December 6,2001 for $866 .10 ($28.8767 per share), 140 shares were sold on May 3,2002 for $1,770 .93 ($12.6495 per share)) . All of these transactions wereadequately documented . Laurie G. Morrison also filed a claim for herIRA account (Claim No . 2013990) in which she did not own any shares ofFlextronics common stock at the beginning of the Class Period . She alsopurchased 80 of Flextronics common stock during the Class Period onJanuary 2, 2002 for $1,963 .92 ($24 .5490 per share). She sold all 80 sharesduring the Class Period on May 7, 2002 for $1,037 .60 ($12 .9700 pershare). All of these shares were adequately documented .

Under the Plan of Allocation , neither claim results in a Recognized Claim :

For Allen B . Morrison and Laurie G . Morrison the calculation is :(($1,823 .05 X 1 .7%) + ($571 .59 X 1 .8%) + ($654.40 X 1 .8%) + ($819 .80X 5 .3%)) - (($905 .10 X 1 .8%) + ($866 .10 X 1 .8%) + ($1,770 .93 X 8 .6%))= ($30.99 + $10.29 +$11 .78 + $43 .45) - ($16.29 + $15.59 + $152 .30) _$96.51 - $184 .18 = <$87 .67> (gain not loss) .

For the Laurie G. Morrison IRA the calculation is : ($1,963 .92 X 1 .8%) -($1,037 .60 X 8 .6%) = $35 .35 - $89 .23 = <$53 .88> (gain not loss) .

Consequently, on February 11, 2005, GCG mailed two Final Notices ofIneligibility to the Morrisons stating that both claims were rejectedbecause they had no Recognized Claim . Mr. and Ms . Morrison respondedby a letter dated February 16, 2005, disagreeing with GCG'sdetermination for both claims . A GCG representative spoke with theMorrisons on March 14, 2005 and explained to them that, as described inthe Plan of Allocation, their inflation paid was less than their inflationreceived, which resulted in their claim having no Recognized Claim underthe Plan of Allocation. Despite this explanation, the Morrisons still objectto GCG's determination on both claims . Attached hereto on a CD-ROMas Exhibit D and Exhibit E are the Proof of Claim forms for Allen B .

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Morrison and Laurie G . Morrison, Laurie G. Morrison's IRA claim, andsupporting documentation as well as all additional correspondencebetween GCG and the claimants .

Laurent Edward Guimond (Claim No. 2120321) did not own any shares ofFlextronics common stock at the beginning of the Class Period . Hepurchased 1,000 shares of Flextronics common stock on the last day of theClass Period (June 4, 2002) for $9 .84 per share . He held all 1,000 sharesafter the Class Period. All of these transactions were adequatelydocumented .

The Plan of Allocation does not provide any Recognized Claim for sharespurchased on June 4, 2002 because the alleged artificial inflation existingprior to that date was allegedly eliminated by announcements made afterthe close of trading on June 3 and on June 4, 2002 . As such, purchasesmade on June 4, 2002 could not be alleged to have been at artificiallyinflated prices .

Under the Plan of Allocation, Mr . Guimond's does not have a RecognizedClaim. Consequently, on February 11, 2005, GCG mailed a Final Noticeof Ineligibility to Mr . Guimond stating that his claim was rejected becauseit had no Recognized Claim . Mr. Guimond responded by a letter datedFebruary 15, 2005, disagreeing with GCG's determination for his claim .A GCG representative spoke with Mr. Guimond on March 14, 2005 andexplained to him that, under the Plan of Allocation, he has no RecognizedClaim. Mr. Guimond nevertheless still objects to GCG's determination onhis claim. Attached hereto on a CD-ROM as Exhibit F is the Proof ofClaim form for Mr . Guimond and supporting documentation as well as alladditional correspondence between GCG and the claimant .

• Sally L. Gurr and Ronald M . Gurr, Trustees who filed a claim for the SallyL. Gurr Rev. Living Trust DTD 08/28/97 (Claim No . 2082451), did notown any shares of Flextronics common stock at the beginning of the ClassPeriod. They purchased 212 shares of Flextronics common stock duringthe Class Period (156 shares were purchased on December 17, 2001 for$4,151 .16 ($26.61 per share), 15 shares were purchased on March 8, 2002for $297.60 ($19.84 per share), 41 shares were purchased on March 11,2002 for $788 .02 ($19.22 per share)) . They sold all 212 shares during theClass Period on May 17, 2002 for $3,322.04 ($15 .6700 per share). All ofthese transactions were adequately documented .

Under the Plan of Allocation, the Gurr Trust does not result in aRecognized Claim : (($4,151 .16 X 1 .8%) + ($297.60 X 5 .3%) + ($788 .02X 5.3%)) - ($3,322.04 X 8 .6%) _ ($74 .72 + $15 .77 + $41 .77) - $285 .70 =$132 .26 - $285 .70 = <$153 .44> (gain not loss) .

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Consequently, on February 11, 2005, GCG mailed a Final Notice ofIneligibility to the Gurrs stating that their claim was rejected because ithad no Recognized Claim . Mr. Gurr responded by a letter that GCGreceived on March 4, 2005, disagreeing with GCG's determination for theTrust's claim. A GCG representative called and failed to reach Mr . Gurron March 14, March 16, and March 23, 2005 to explain to him that, asdescribed in the Plan of Allocation, their inflation paid was less than theirinflation received, which resulted in their claim having no RecognizedClaim under the Plan of Allocation . Attached hereto on a CD-ROM asExhibit G is the Proof of Claim form for Sally L . Gurr and Ronald M .Gurr and supporting documentation as well as all additionalcorrespondence between GCG and the claimant .

Hershman and Suway Partners (Claim No . 2114408) did not own anyshares of Flextronics common stock at the beginning of the Class Period .They purchased 1,000 shares of Flextronics common stock during theClass Period on February 12, 2002 for $18,230 .00 ($18.23 per share) .They sold all 1,000 shares during the Class Period on May 16, 2002 for$16.019.60 ($16.0196 per share) . All of these transactions wereadequately documented .

Under the Plan of Allocation, the claim of Hershman and Suway Partnersdoes not result in a Recognized Claim: ($18,230 .00 X 5 .3%) - ($16,019 .60X 8 .6%) = $966.19 - $1,377 .69 = <$411 .50> (gain not loss) .

Consequently, on February 11, 2005, GCG mailed a Final Notice ofIneligibility to the Partnership stating that their claim was rejected becauseit had no Recognized Claim . Mr. Mark Hershman responded by a letterthat GCG received on March 18, 2005, disagreeing with GCG'sdetermination for his claim . A GCG representative called and leftmessages with Mr . Hershman's secretary on March 23, March 29, andApril 6, 2005 in an attempt to explain to him that, as described in the Planof Allocation, their claim has no Recognized Claim under the Plan ofAllocation . Attached hereto on a CD-ROM as Exhibit H is the Proof ofClaim form for Hershman and Suway Partners and supportingdocumentation as well as all additional correspondence between GCG andthe claimant.

Steven E. Kay (Claim No. 2046697) did not own any shares of Flextronicscommon stock at the beginning of the Class Period . He purchased 450shares of Flextronics common stock during the Class Period on December18, 2001 for $11,749 .50 ($26.11 per share) . He sold all 450 shares duringthe Class Period on February 25, 2002 for $7,141 .50 ($15.87 per share) .All of these transactions were adequately documented .

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Under the Plan of Allocation, Steven E . Kay's claim does not result in aRecognized Claim : ($11,749 .50 X 1 .8%) - ($7,141 .50 X 5 .3%) = $211 .49- $378.50 = <$67.01> (gain not loss) .

Consequently, on February 11, 2005, GCG mailed a Final Notice ofIneligibility to Mr . Kay stating that his claim was rejected because it hadno Recognized Claim . Mr. Kay responded by a letter dated February 17,2005, disagreeing with GCG's determination for his claim . A GCGrepresentative called and left a message for Mr . Kay on March 14, 2005,and left a message with his wife on March 15, 2005 . GCG received a callback, out of office hours, and we returned his phone call on March 16,2005 and had to leave a message for him again, letting him know that weare trying to explain to him that, as described in the Plan of Allocation, hisclaim has no Recognized Claim under the Plan of Allocation . Attachedhereto on a CD-ROM as Exhibit I is the Proof of Claim form for Steven E .Kay and supporting documentation as well as all additionalcorrespondence between GCG and the claimant .

Arthur Planer (Claim No . 2025678) did not own any shares of Flextronicscommon stock at the beginning of the Class Period . He purchased 2,000shares of Flextronics common stock during the Class Period (1,000 shareswere purchased on June 15, 2001 for $25,000 ($25 .00 per share), andanother 1,000 shares were purchased on August 17, 2001 for $25,000($25 .00 per share)) . He sold all 2,000 shares during the Class Period onMay 20, 2002 for $30,000 ($15 .00 per share) . All of these transactionswere adequately documented .

Under the Plan of Allocation, Arthur Planer's claim does not result in aRecognized Claim : (($25,000 x 1 .8%) + ($25,000 x 1 .8%)) - ($30,000 x5 .3%) = ($450.00 + $450 .00) - $1,590 = $900 .00 - $1,590 = <$690.00>(gain not loss) .

Consequently, on February 11, 2005, GCG mailed a Final Notice ofIneligibility to Mr . Planer stating that his claim was rejected because it hadno Recognized Claim . Mr. Planer responded by a letter dated February28, 2005, disagreeing with GCG's determination for his claim . A GCGrepresentative spoke with Mr . Planer on March 15, 2005 to explain to himthat, as described in the Plan of Allocation, his claim has no RecognizedClaim under the Plan of Allocation . Attached hereto on a CD-ROM asExhibit J is the Proof of Claim form for Arthur Planer and supportingdocumentation as well as all additional correspondence between GCG andthe claimant .

20. Approximately 5,008 claims were postmarked later than November 16,

2004, the submission deadline stated in the Notice . No claim has been rejected because it wa s

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received after the initial submission deadline and we believe no delay has resulted from th e

provisional acceptance of these claims . These claims are included in the list of Authorized

Claimants .

21 . However, there must be a final cut-off after which no more claims may b e

accepted in order that there may be a proportional distribution of the Net Settlement Fund .

Acceptance of any claim received after the date of this application would necessarily increase the

costs of the administration and could require a delay in the distribution . Accordingly, it is als o

respectfully requested that an Order be entered that no claim received after October 24, 2005, b e

accepted for any reason whatsoever .

22. A total of 51,802 persons or entities have filed claims herein (46,794

timely and 5,008 after November 16, 2004), of which a total of 39,785 (36,503 timely, and 3,28 2

untimely) have been accepted .

23 . A total of 12,017 Claimants were wholly rejected for the followin g

reasons :

No. of Claims Reason for Rejection

2,797 Claim Did Not Fit the Definition of the Clas s

235 Duplicate Claim

1,531 Deficient Claims Never Cured

7,454 Claim Did Not Result in a Recognized Clai m

24. An integral part of all of our claims administration projects is the Quality

Assurance review . Once all of the claims have been processed, deficiency and/or rejection

letters have been mailed, and deficiency responses reviewed and processed, GCG's Qualit y

Assurance unit performs a final project wrap-up in order to ensure correctness and completenes s

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of all of the claims processed prior to preparing our final reports to counsel . Here, in connection

with this Quality Assurance process we : (i) checked that all otherwise "valid" claims that do not

have proper Social Security/Tax Identification Numbers were given a "message" flagging th e

computer system to denote that condition ; (ii) determined that valid claims have no message s

denoting ineligibility ; (iii) determined that claims that are ineligible have messages denoting

ineligibility; determined that claims that contained purchases that occurred after the Class Perio d

contain appropriate ineligible messages ; (iv) determined that claim detail (transaction)

message(s) appear(s) only on claim detail records; (v) determined that all claims requirin g

Deficiency/Rejection letters were sent such letters ; (vi) performed a sample review of deficient

claims; (vii) reviewed claims with large dollar losses ; and (viii) sampled claims that were

determined to be ineligible , including those with no Recognized Claim calculated in accordanc e

with the Plan of Allocation, in order to verify that all transactions had been captured correctly;

and tested the accuracy of the calculation program .

25 . In support of the work described above, the GCG computer staff designed ,

implemented and tested the following programs for this administration : Calculation program

with descending dollar and alphabetical order lists ; and Check writing programs .

26. GCG has accepted 39,785 claims representing a total Recognized Claim o f

$187,082 ,021 .88 (including $ 159,867 , 163 .19 from timely claims and $27,214 ,858.69 from

claims submitted after November 16, 2004) .

27. Submitted herewith as Exhibits K, L, and M are administrative report s

listing all the claims filed herein . Exhibit K alphabetically lists all the timely filed Authorized

Claimants and shows their Recognized Claim amounts . Exhibit L is an alphabetical list o f

otherwise acceptable claims submitted after November 16, 2004 showing their Recognized

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Claim amounts . Exhibit M alphabetically lists all the rejected Claimants and shows the reason

why such claims were rejected . For the Court's convenience, these exhibits have been placed o n

a CD-ROM due to the large size of the administrative reports .

28 . GCG has spent the time necessary to do a thorough job of processing th e

claims and to protect the interests of each Class Member filing a claim. No claims were rejected

out-of-hand and adequate time was spent communicating with Class Members and suggestin g

appropriate ways they could document their claims and participate in the settlement . Telephone

calls and written letters from Claimants to GCG were courteously handled. Class Members were

assisted to the fullest extent possible . The professional attitude and work product of GCG was, I

believe, the highest quality .

29. It is respectfully requested that the Court enter an Order approving th e

above determinations accepting and rejecting the claims filed herein . In order to allow the final

distribution of the Net Sett lement Fund it is necessary to bar any further claims against the Net

Settlement Fund and to provide that all persons involved in the review, verification, calculation ,

tabulation, or any other aspect of the processing of the claims submitted herein, or otherwis e

involved in the administration or taxation of the Settlement Fund or the Net Settlement Fund b e

released and discharged from any and all claims arising out of such involvement beyond th e

amount allocated to them .

30. If the Court grants this motion, the GCG staff will undertake the followin g

tasks : calculate the pro rata distribution amounts from the Net Settlement Fund by comparin g

the Authorized Claimants' Total Recognized Claim with the total dollar value of the Ne t

Settlement Fund at the time of distribution; prepare checks and check registers, and mail checks

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by prepaid first class mail; issue replacement checks upon request by payee ; and, answer

inquiries about claim calculation and checks .

31 . If the Court grants this motion , the GCG staff will make reasonable and

diligent efforts to have Class Members who are entitled to participate in the distribution of the

Net Settlement Fund cash their distribution checks . If there is any balance remaining in the Ne t

Settlement Fund one (1) year after the initial distribution of the Net Se tt lement Fund, GCG shal l

re-distribute such balance to Class members who have cashed their checks and who woul d

receive at least $10 .00 from such re-distribution . If after six months after such re-distributio n

any funds shall remain in the Net Settlement Fund, then pursuant to the approved Plan o f

Allocation such balance shall be contributed to non-sectarian, not-for-profit, 501(c)(3 )

organization (s) designated by Class Counsel .

FEES AND DISBURSEMENT S

32. GCG agreed with Plaintiff's Co-Lead Counsel to give notice to the Class ,

process the claims herein, administer and distribute the Net Settlement Fund to the Authorized

Claimants, and prepare the tax returns for the Settlement Fund in consideration of payment of

our standard fees, subject to this Court' s approval . Our actual fees incurred at our standard rates

from July 21, 2004 (inception of the administration) through September 15, 2005 ($967,346 .16)

and to be incurred at our standard rates from September 16, 2005 through the redistributio n

($56,460.30) amount to $1,023,806 .46, as shown on the invoice annexed hereto as Exhibit N . In

our engagement it was also agreed that GCG's out-of-pocket expenses would be reimbursed ,

subject to this Court's approval . Our actual out-of-pocket expenses incurred from July 21, 2004

(inception of the administration) through September 15, 2005 ($292,550 .08) and to be incurre d

from September 16, 2005 through the redistribution ($22,992 .00) amount to $315,542 .08, as also

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shown on the invoice annexed as Exhibit N. Thus, in total , GCG's standard fees and actual out-

of-pocket expenses incurred and to be incurred through the date of the distribution tota l

$1,339,348.54 .

33. At the request of Class Counsel, GCG has agreed to a $340,000 .00

reduction from its standard professional fees and expenses incurred and to be incurred in

connection with the administration of the Settlement . In addition, GCG has aggressively

challenged the expenses billed by brokerage firms for their expenses incurred in providing notic e

to their beneficiaries and has obtained a $102,883 .71 reduction to the amount to be reimbursed t o

these entities . As a result, GCG has reduced its fees and expenses by a total of $442,883 .71 .

34. GCG has not received any payment on account from the Settlement Fund .

Accordingly, I respectfully request that the Court authorize payment of $896,464 .83 to GCG for

our all of fees and expenses incurred and to be incurred in connection with services performed o n

behalf of the Settlement Fund .

RECORDS RETENTION AND DESTRUCTIO N

35. We request that the Court enter an Order providing that one year after

distribution of the Net Settlement Fund we are authorized to destroy the paper copies of th e

Proof of Claim forms, and three years after distribution of the Net Settlement Fund we ar e

authorized to destroy electronic copies of claim records .

CONCLUSION

36. For the foregoing reasons , it is respectfully requested that this Court enter

an Order (1) approving GCG's administrative determinations accepting and rejecting claims as

herein set forth, including the rejection of the claims of the court review claimants ; (2)

authorizing payment to GCG of a total of $896,464 .83 for its fees and expenses incurred and t o

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be incurred in connection with giving notice to the Class, processing the claims, preparing the

tax returns, and administering and distributing the Net Settlement Fund ; (3) authorizing

distribution of the Net Settlement Fund to the accepted claimants; and (4) authorizing destruction

of paper copies of Proof of Claim forms and electronic copies of claim records after an

appropriate time after the distribution of the Net "I

Swo rn to before me this 24thday of October 2005

&W-14"~ ~~": ~'-otary u is

DINANATH GANGAPERSAD6a~ -10Nota ry Public - State of New York

NO.01 GA6085793Qualified in Queens C

My Commission Expires I 6 O

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