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1 LAB ATON SUCHAROW LLP JONATHAN GARDNER 0 2 jardner(à)labaton. corn c r' ANGBLINA NGUYEN rn 3 anguyen(Tclabaton. corn 140 BroaLway - 4 New York, New York 10005 Telephone: (212) 907-0700 5 Facsirmle: (212) 8118-0477 I 6 MOTLEY RICE LLP MARK I. LABATON (159555) 7 rn1abatonrnotleyrice.com C) 1100 Glendon Avenue, 14th Floor 8 Los Angeles, California 90024 Telephone: (310) 500-3488 9 Facsimile: (310) 824-2870 10 Attorneys for Lead Plaintiff Institutional Investor Group and 11 Co-Lead Counsel for the Class 12 Additional counsel jisted on signature page] 13 14 UNITED STATES DISTRICT COURT 15 CENTRAL DISTRICT OF CALIFORNIA 16 SOUTHERN DIVISION 17 RICHARD GAMMEL, Individually No. SA CV 11-01404 AG (RNBx) 18 and on behalf of all others similarly situated, CLASS ACTION 19 Plaintiff, SECOND AMENDED CLASS 20 ACTION COMPLAINT vs. FOR VIOLATIONS OF THE 21 FEDERAL SECURITIES LAWS FWWLBTT-PACKARD COMPANY 22 LEO APOTHEKER and CATHERH'SfE Jury Trial Demanded A. LBS JAK, 23 Defendants. 24 25 26 27 28 Fii.si' AMENDED CLASS ACTION COMPLAINT No. SA CV 11..01404 AG (RNBx Case 8:11-cv 1404-AG-RNB Document 89 Filed 10/19/12 Page 2 of 128 Page ID #:1527

1 TABLE OF CONTENTS 2 3 I. NATURE AND SUMMARY OF THE ACTION...... 2 4 IT. JURISDICTION AND VENUE...... 6 5 11111. PARTIES...... 6 6 A. LeadPlaintiffs...... 6 7 B. Defendants...... 8 8 1. Hp ...... 8 9 Al Individual Defendants...... 9 10 IIIV. FACTUAL BACKGROUND AND SUBSTANTIVE ALLEGATIONS...... 11 11 £ HP Business Overview ...... 11 12 I. I. HP Acquires Palm and Presents webOS as the Base for 13 Multiple Connected Devices...... 12 14 C. HP Introduces Its Strategy to Extend WebOS Across Multiple Devices as a Universal Software Platform for a Connected 15 Ecosystem...... 15 16 D. Defendants Had No Basis for Their Repeated Statements Regarding WebOS PCs or Printers ...... 22 17 1. UP's Development Cycle ...... 23 18 2. Neither webOS PCs nor webOS Printers Progressed 19 Beyond "Concepting"...... 25 20 The webOS Software Team Focused Exclusively on the TouchPad...... 33 21 Defendants' False and Misleading Timeline for webOS 22 PCsand Printers ...... 39 23 E. Defendants Knowingly Release the TouchPad With Serious SoftwareProblems ...... 41 24 V. DEFENDANTS' MATERIALLY FALSE AND MISLEADING 25 CLASS PERIOD STATEMENTS AND ANALYST AND MARKET REACTIONSTHERETO...... 51 26 February 9, 2011 webOS Announcement ...... 51

27 F.' 1Q11 Earnings Conference Call ...... 57 28

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1 C. March 14, 2011 HP Summit...... 58 2 D. March 14, 2011 HP Summit Press Release ...... 67 3 E. 2Q11 Earnings Conference Call ...... 70 4 F. June 1, 2011 All Things Digital D9 Conference...... 73 5 G. June 2, 2011 Sanford C. Bernstein & Co. Strategic Decisions Conference...... 76 6 H. 2Q11 Form 10-Q Quarterly Report ...... 79 7 I. July 6, 2011 All Things Digital Article...... 80 8 J. July 11, 2011 Press Release...... 81 9 July 20, 2011 Bloomberg News Interview...... 83 10 VI. INVESTORS SUFFERED DAMAGES WHEN HP'S STOCK PRICE 11 COLLAPSED AFTER THE MARKET LEARNED THE TRUTH BEHIND THE WEBOS "ECOSYSTEM ...... 86 12 VII. POST-CLASS PERIOD EVENTS ...... 94 13 VIII. ADDITIONAL ALLEGATIONS SUPPORTING THE INDIVIDUAL 14 DEFENDANTS' SCIENTER...... 96 15 A. HP Presents the webOS Ecosystem as Its Core Business During theClass Period ...... 96 16 B. The Individual Defendants Were "Hands On" with webOS 17 DeviceDevelopment ...... 100 18 C. Temporal Proximity and Apotheker' s Termination Support Scienter...... lot 19 Ix. CLASS ACTION ALLEGATIONS ...... 102 20 X. PRESUMPTION OF RELIANCE...... 104 21 XI. INAPPLICABILITY OF STATUTORY SAFE HARBOR...... 106 22 A. Many of Defendants' False and Misleading Statements Were 23 NotForward-Looking ...... 106 24 1. February 9, 2011 Event ...... 106 25 2. February 22, 2011 Earnings Call...... 107 26 3. March 14, 2011 1-IP Summit...... 107 27 4. March 14, HP Summit Press Conference...... 108 28 5. May 17, 2011 Conference Call...... 108

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1 6. June 1, 2011 All Things Digital Interview...... 109 2 7. June 2, 2011 Sanford C. Bernstein Conference...... 109 3 8. June 8 2011 2Q11 Form 10-Q ...... 109 4 9. July 6, 2011 Interview for All Things Digital...... 109 5 10. July 11, 2011 HP Press Release ...... 109 6 11. July 20, 2011 Bloomberg News Interview...... 110

7 I i Any Statements Touching on Future Plans or Intentions are Inextricably Intertwined with and Dependent on Present Fact...... 110 8 C. Several False and Misleading Statements are Not Identified as 9 "Forward-Looking"...... 116 10 D. Defendants' False and Misleading Statements Were Not Accompanied by Meaningful Cautionary Language...... 116 11 1. March 14, 2011 HP Summit...... 117 12 2. May 17, 2011 Earnings Call...... 117 13 XII. CLAIMS FOR RELIEF ...... 118 14 COUNT I Violations of Section 10(b) of the Securities Exchange Act of 15 1934 and SEC Rule 1 Ob-5 (Asserted Against All Defendants)...... 118 16 COUNT II Violations of Section 20(a) of the Securities Exchange Act of 1934 (Asserted Against the Individual Defendants) ...... 119 17 XIII. PRAYER FOR RELIEF...... 121 18 XIV. DEMAND FOR JURY TRIAL...... 121 19 20 21 22 23 24 25 26 27 28

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Court-appointed Lead Plaintiff Institutional Investor Group, composed of 2 Arkansas Teacher Retirement System, Union Asset Management Holding AG, 3 Labourers' Pension Fund of Central and Eastern Canada, and the LIUNA National 4 (Industrial) Pension Fund and LIUNA Staff & Affiliates Pension Fund 5 (collectively, "Lead Plaintiffs"), individually and on behalf of a class of similarly 6 situated persons and entities, for their Second Amended Class Action Complaint 7 for Violations of the Federal Securities Laws asserting claims against Hewlett- 8 Packard Company ("HP" or the "Company") and the Individual Defendants named 9 herein, allege the following upon personal knowledge as to themselves and their 10 own acts, and upon information and belief as to all other matters. 11 Lead Plaintiffs' information and belief as to allegations concerning matters 12 other than themselves and their own acts is based upon, among other things, (i) 13 review and analysis of press releases, news articles, transcripts, and other public 14 statements issued by or concerning HP and the Individual Defendants; (ii) review 15 and analysis of research reports issued by financial analysts concerning HP's 16 securities and business; (iii) review and analysis of reports filed publicly by HP 17 with the Securities and Exchange Commission (the "SEC"); (iv) an investigation 18 conducted by and through Lead Plaintiffs' attorneys, which included interviews of 19 numerous former HP employees on a confidential basis; (v) review and analysis of 20 news articles, media reports and other publications concerning the personal 21 computer and mobile technology industries and markets; (vi) review and analysis 22 of certain pleadings filed in other pending litigations naming HP as a nominal 23 defendant; (vii) other publicly available information and data concerning HP, its 24 securities, and the markets therefor; and (viii) discussions with and analyses 25 'prepared by consulting experts. Lead Plaintiffs believe that substantial additional 26 evidentiary support for the allegations herein exists and will continue to be 27 revealed after Lead Plaintiffs have a reasonable opportunity for discovery. 28

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1 II I. NATURE AND SUMMARY OF THE ACTION 2 1. Lead Plaintiffs bring this federal securities class action on behalf of 3 themselves and all similarly situated persons and entities that, between February 9, 4 2011 and August 18, 2011, inclusive (the "Class Period"), purchased or otherwise 5 acquired the publicly traded common stock of HP on the open market and were 6 damaged thereby (the "Class"). 7 2. 1-lIP is among the world's largest information technology companies. 8 HIP provides a variety of technology-related products, software, solutions and 9 services to individual consumers, small and medium-sized businesses and large 10 enterprises, including customers in the government, health and education sectors. 11 3. Prior to and during the Class Period, HP was best known for selling 12 personal computers, including desktops and laptops (collectively, "PCs"), and 13 printers. HP consistently has been the world's leading provider of PCs, including 14 desktops and laptops for both the consumer and commercial sectors, sold through 15 its Personal Systems Group ("PSG") business segment. During the Class Period, 16 HP's PC business commanded nearly 20 percent of the global PC market, and PSG 17 was UP's largest business segment by revenue, generating nearly $40 billion 18 annually or about one-third of all revenue. 19 4. Although HP was the acknowledged leader in selling such computer 20 and printer hardware, the Company had no ownership interest in proprietary 21 software—BP's PCs and printers ran on Microsoft's Windows operating system 22 and related software applications. Starting in the mid-2000s, as HP continued to 23 assemble and sell hardware for Windows products, a profitable market for 24 "smartphones," tablet computers ("tablets") and other mobile, web-connected 25 devices was rapidly growing. Apple, Google, and blackberry maker Research in 26 Motion ("RIM"), the main competitors in this emerging market, either had or were 27 developing their own mobile operating systems. 28

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1 5. Palm, Inc. ("Palm"), the developer of the PaimPilot, one of the first 2 hand-held computing devices, was a pioneer in this market but had since been 3 overtaken by its competitors and was failing. Palm owned its own mobile 4 operating system, webOS, which powered the latest line of Palm stnartphones. 5 Seeing an opportunity, HP bought Palm in July 2010 for $1.2 billion in order to 6 secure webOS as a unique proprietary asset. 7 6. HP portrayed the Palm deal as a game-changing event, telling 8 investors that with webOS, HP would, for the first time, gain the ability to control 9 both its hardware and software. WebOS would be the key "building block" in 10 ET's strategy to not only enter and compete successfully in the smartphone and 11 tablet markets, but also to create a broader and unified "ecosystem" of devices 12 connected through the "cloud" by webOS. This ecosystem, anchored by the 13 Company's flagship webOS product, the "TouchPad" tablet, would become the 14 universal operating platform for BP's PCs and printers as well as its tablets and 15 smartphones—seamlessly integrating the user's digital environment. Like Apple, 16 HP would be able to offer its customers a unified user experience across a range of 17 elegant devices, with webOS ultimately supporting and connecting the user's 18 smartphone, tablet, PC and printer in a fully integrated and flexible ensemble of 19 devices. HP could thus attract a distinct customer base whose devices and digital 20 environment would be built entirely on HP's proprietary software. 21 7. To that end, on February 9, 2011 HP introduced a "mini-ecosystem" 22 consisting of two srnartphones (largely developed at Palm before the acquisition) 23 and the TouchPad (developed at HP), touting the ability of the three webOS 24 devices to seamlessly and wirelessly connect. Building on this demonstration, HP 25 and the Individual Defendants stated - and repeated throughout the Class Period - 26 that HP would expand the webOS ecosystem of devices and introduce "millions" 27 of webO S-enabled PCs and printers within the short time-frame of less than two 28 years.

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1 8. Similarly, during a March 2011 analyst summit, Leo Apotheker, HP's 2 CEO, represented that HP was "getting ready to roll out web OS on a massive 3 scale," and had "the potential to deliver more than 100 million webOS enabled 4 devices a year, including our PCs, our TouchP ads, our smart phones, and our 5 ers." Apotheker further stated that "you will see us putting webOS . . . on 6 PCs" such that "you will see this to become a very massive, very broad platform." 7 9. However, Defendants had no basis to make these definitive 'I statements. From before the TouchPad was introduced in February 2011, through 9 its delayed launch on July 1, 2011, HP's webOS team was stretched to capacity 10 attempting to make the TouchPad market-ready and rid it of extensive software 11 defects. Even before the TouchPad's release, HP had readied a comprehensive 12 software update with "hundreds of improvements," and an internal e-mail on the 13 release date established that most of the problems were "already known" 14 internally. 15 10. Former webOS group members confirm that no resources were 16 available during the Class Period for PCs or printers, given the entire team's 17 singular focus on the TouchPad. Moreover, because the webOS team possessed 18 the webOS software code, its involvement was a necessary prerequisite for any 19 webOS PC or printer. For example, because printers had relatively small memory 20 capacity, the webOS code would have to be rewritten for the smaller memory 21 "footprint" before any meaningful development could occur. A hiring freeze in 22 effect during the Class Period ensured that no additional webOS resources could be 23 obtained to develop the appropriate software code for PCs and printers. 24 Accordingly, it was impossible that lIP would have market-ready PCs and printers 25 in the tirneframe Defendants misleadingly presented in their public statements, 26 given that - as a former webOS Director of Product Delivery Engineering 27 explained - it would have taken at least two years to develop webOS for printers 28 and PCs.

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1 11. Internal financial projections as far as the end of 2012 also reveal that 2 HP did not expect any revenue from webOS PCs or printers during that timefrarne, 3 confirming that no PCs or printers would have been market-ready until at least the 4 beginning of 2013. According to former employees, no "plans of operation" 5 ("PORs") existed that would have detailed the specific timeline and resources, 6 including "man-weeks," allotted to the development of webOS PCs and printers 7 during the Class Period. PORs were required for products in actual development 8 beyond the "concepting" stage. Although HP had a couple of small exploratory 9 teams - outside the webOS team - that were working on developing possible 10 hardware for webOS PCs and printers, those teams could not progress past the 11 "concepting" stage without a POR and the involvement of the webOS group. Yet 12 during the Class Period, as evidenced by the accounts of former webOS group 13 employees and at least one email, the webOS group was told not to accept any 14 calls from the PC or printer groups, and to focus solely on the TouchPad. 15 12. On August 18, 2011, following the TouchPad's poor performance and 16 market reception, HP abruptly reversed course and announced that it was shutting 17 down all of its webOS hardware operations, thus acknowledging that no wider 18 ecosystem (i.e., webOS PCs or printers) would be brought to market. 19 13. Shocked investors sent HP's stock price plummeting. After dropping 20 6 percent on August 18, 2011, the stock plunged an additional 20 percent on 21 August 19, HP's closing share price on August 19 was the lowest in six years and 22 represented the stock's worst one-day percentage decline since the Black Monday 23 stock market crash of October 1987. In total, HP stock fell by nearly 25 percent o 24 August 18 and 19, 2011, wiping out more than $16 billion in shareholder value, 25 and has not recovered to date. 26 14. Just a month later, the HP Board fired Apotheker. In December 2011, 27 after writing off more than $3 billion in webOS wind-down costs, HP cut its losses 28

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1 and dumped its entire $1.2 billion investment in Palm, contributing webOS to the 2 public as "open-source" software. 3 II II. JURISDICTION AND VENUE 4 15. The claims asserted herein arise under Sections 10(b) and 20(a) of the 5 Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §§ 78j(b) and 6 78t(a), and Rule lob-S promulgated thereunder by the SEC, 17 C.F.R. § 240.1 Ob-5. 7 16. This Court has jurisdiction over the subject matter of this action 8 pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 9 1331 and 1337(a). 10 17. Venue is proper in this judicial district pursuant to Section 27 of the 11 Exchange Act and 28 U.S.C. § 1391(b). Many of the acts and omissions charged 12 herein, including the dissemination of materially false and misleading information 13 to the investing public, occurred in this district. T-IP has operations in this district 14 and division, including substantial places of business at 2125 East Katella Avenue, 15 Anaheim, California, and 15355 Barranca Parkway, Irvine, California. 16 18. In connection with the acts and conduct alleged herein, Defendants, 17 directly or indirectly, used the means and instrumentalities of interstate commerce, 18 including but not limited to the United States mails, interstate telephone 19 communications, and the facilities of national securities exchanges and markets. 20 III. PARTIES 21 Lead Plaintiffs 22 19 On December 19, 2011, this Court appointed the Institutional Investor 23 Group, composed of Arkansas Teacher Retirement System ("ARTRS"), Union 24 Asset Management Holding AG ("Union"), Labourers' Pension Fund of Central 25 and Eastern Canada ("LPF"), and the LIUNA National (Industrial) Pension Fund 26 and LIUNA Staff & Affiliates Pension Fund (together, the "LTUNA Funds"), to 27 serve as Lead Plaintiffs in this action pursuant to the Private Securities Litigation 28 Reform Act of 1995 (the "PSLRA").

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1 20. ARTRS is a cost-sharing, multiple-employer defined benefit pension 2 plan that provides retirement benefits to public school and other public education- 3 related employees in the State of Arkansas. ARTRS was established by Act 266 of 4 1937, as an Office of Arkansas State government, for the purpose of providing 5 retirement benefits for employees of any school or other educational agency 6 participating in the system. ARTRS has more than $9.88 billion in net assets held 7 in trust for pension benefits, and includes 343 participating employers and more 8 than 119,000 members as of June 30, 2010. Asset forth in its PSLRA certification 9 previously filed with the Court, ARTRS purchased HP common stock on the open 10 market during the Class Period and suffered damages as a result of the securities 11 law violations alleged herein. 12 21. Union is a sophisticated institutional investor and experienced 13 fiduciary based in Frankfurt, Germany. Union manages assets of approximately 14 €169 billion, or approximately $230.6 billion, as of September 30, 2011, and has 15 more than 2,400 employees. Union is fully authorized by virtue of a valid 16 assignment of legal claims, which was executed prior to the motion for 17 appointment as Lead Plaintiff; to represent the legal interests of the UniGlobal and 18 UniGlobal-net Funds managed under German law by Union Investment 19 Privatfonds GmbH. As set forth in Union's PSLRA certification previously filed 20 with the Court, the UniGlobal and UniGlobal-net Funds each purchased HP 21 common stock on the open market during the Class Period and suffered damages 22 as a result of the securities law violations alleged herein. 23 22. LPF, based in Oakville, Ontario, is a multi-employer pension plan 24 providing benefits for employees working in the construction industry. LPF has 25 approximately $2.792 billion (Canadian) in assets as of December 31, 2011, and 26 more than 37,500 active members and more than 16,000 retired members and 27 beneficiaries as of December 31, 2010. As set forth in its PSLRA certification 28 previously filed with the Court, LPF purchased HP common stock on the open

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1 market during the Class Period and suffered damages as a result of the securities 2 law violations alleged herein. 3 23. LIUNA National (Industrial) Pension Fund is a joint labor- 4 management trust fund established in 1967 by the Laborers' International Union of 5 North America ("LIUNA"), a construction workers' union, and employers of 6 LIUNA members, for the primary purpose of providing retirement income for 7 LIUNA-represented employees working in various industries other than the 8 building and construction industry. LIUNA Staff & Affiliates Pension Fund is a 9 pooled trust fund established and maintained for the exclusive purpose of 10 providing a defined benefit retirement income for officers and staff employees of 11 LIUNA and of local unions, district councils and other labor organizations 12 affiliated with LIUNA. The LIUNA Funds have more than 17,000 pensioners as 13 of December 31, 2011, with approximately $1.69 billion in assets. As set forth in 14 their PSLRA certifications previously filed with the Court, the LIUNA Funds each 15 purchased HP common stock on the open market during the Class Period and 16 suffered damages as a result of the securities law violations alleged herein. 17 B. Defendants 18 1. HP 19 24. Defendant HP is a Delaware corporation with principal executive 20 offices at 3000 Hanover Street, Palo Alto, California 94304. The Company 21 describes itself as the world's largest information technology company and the 22 leading provider of products, technologies, software, solutions and services to 23 individual consumers, small and medium-sized businesses and large enterprises, 24 including customers in the government, health and education sectors. In particular, 25 HP is the world's leading vendor of personal computers as well as printers and 26 related printing supplies. Throughout the Class Period, HIP common stock traded 27 actively on the New York Stock Exchange ("NYSE") under the ticker symbol 28

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1 2. Individual Defendants 2 25. Defendant Leo Apotheker ("Apotheker") was EP's President and

3 Chief Executive Officer and a member of the Company's Board of Directors from 4 on or about November 1, 2010 until September 22, 2011, when the Board fired him. Apotheker is listed as one of HIP's Executive Officers in the Company's

6 Form 10-K Annual Report filed with the SEC on December 15, 2010 for fiscal 7 year 2010, ended October 31, 2010 (the "2010 Form 1 0-K"). During the Class 8 Period, as more fully alleged below, Apotheker made materially false and 9 misleading statements in HP quarterly conference calls, SEC filings, events for 10 analysts, investors and the media, and industry events. 11 26. Defendant R. Todd Bradley ("Bradley") has served as the Executive 12 Vice President, PSG, UP's PC division that included its Palm and webOS 13 operations, since June 2005. Prior to joining HP in 2005, Bradley served as the 14 CEO of Palm. Bradley is listed as one of HP's Executive Officers in the 15 Company's 2011 Form 10-K and 2010 Form 10-K. During the Class Period, as 16 more fully alleged below, Bradley made materially false and misleading statem 17 in HP quarterly conference calls, media reports and news articles, events for 18 analysts, investors and the media, and industry events. 19 27. Apotheker and Bradley are referred to collectively herein as the

20 "Individual Defendants." 21 28. Each of the Individual Defendants, by virtue of his high-level 22 positions with HP, directly participated in the management of the Company, was 23 directly involved in the day-to-day operations of the Company at the highest levels

24 and was privy to confidential proprietary information concerning the Company and 25 its business, operations, growth, financial statements, and financial condition 26 during their tenure with the Company, as alleged herein. As set forth below, the 27 materially misstated information conveyed to the public was the result of the 28 collective actions of these individuals. Each of these individuals, during his tenure

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1 with the Company, was involved in drafting, producing, reviewing and/or 2 disseminating the statements at issue in this case, approved or ratified these 3 statements, or was aware or recklessly disregarded that these statements were 4 being issued regarding the Company. Accordingly, it is appropriate to treat the 5 Individual Defendants as a group for pleading purposes. 6 29. As senior executive officers and/or directors of a publicly held 7 company whose common stock was, and is, registered with the SEC pursuant to 8 the Exchange Act, and whose common stock was, and is, traded on the NYSE, and 9 governed by the federal securities laws, the Individual Defendants each had a duty 10 to disseminate prompt, accurate, and truthful information with respect to the 11 Company's business, operations, financial statements and internal controls, and to 12 correct any previously issued statements that had become materially misleading or 13 untrue, so that the market prices of the Company's publicly traded common stock 14 would be based on accurate information. The Individual Defendants each violated 15 these requirements and obligations during the Class Period. 16 30. The Individual Defendants, because of their positions of control and 17 authority as senior executive officers and/or directors of HP, were able to and did 18 control the content of the SEC filings, press releases and other public statements 19 issued by HP during the Class Period. Each of these individuals was provided with 20 copies of the statements at issue in this action before they were issued to the public 21 and had the ability to prevent their issuance or cause them to be corrected. 22 Accordingly, each of these individuals is responsible for the accuracy of the public 23 statements detailed herein. 24 31. The Individual Defendants, because of their positions of control and 25 authority as senior executive officers and/or directors of HP, had access to the 26 adverse undisclosed information about BR's business, operations, financial 27 statements and internal controls through access to internal corporate documents, 28 conversations with other corporate officers and employees, attendance at

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management and Board of Directors meetings and committees thereof and via

2 reports and other information provided to them in connection therewith, and knew 3 or recklessly disregarded that these adverse undisclosed facts rendered the positive 4 representations made by or about TIP materially false and misleading. 5 IV. FACTUAL BACKGROUND AND SUBSTANTIVE ALLEGATIONS 6 A. HP Business Overview 7 32 UP is among the world's largest information technology companies, 8 with operations in more than 170 countries and $127.2 billion in revenue in fiscal 9 year 2011. HP describes itself as the leading provider of technology-related 10 products, technologies, software, solutions and services to individual consumers, 11 small and medium-sized businesses and large enterprises, including customers in 12 the government, health and education sectors. 13 33. HP is the world's leading vendor of PCs through its PSG segment, 14 commanding nearly 20 percent of the worldwide PC market in 2010. According to 15 preliminary data, HP continued to lead the worldwide PC market in 2011 with 17. 16 percent of market share by units shipped. 17 34. HP's PSG Group provides PCs, handheld computing devices 18 including tablets' and smartphones, 2 and other products and services for the 19 commercial and consumer markets. PSG is the largest of HP's seven business 20 segments by revenue, generating nearly $40 billion annually and representing mon 21 than 30 percent of HP's revenues. Specifically, for fiscal year 2011, as reported in 22 the 2011 Form 10-K, PSG's net revenue accounted for $39.6 billion out of total ne 23 24 'A tablet computer, or tablet, can be described as a mobile computer, larger 25 than a mobile phone or personal digital assistant, that is integrated into a flat touch screen and primarily operated by touching the screen rather than using a physical 26 keyboard. The Apple Wad is the best-known tablet. 2 27 A smartphone can be described a high-end mobile phone built on a mobile computing platform, with more advanced computing ability and connectivity than 28 a feature phone. The Apple iPhone is a good example of a smartphone.

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revenue of $127.2 billion across HP's seven business segments, representing 2 approximately 31% of the Company's total net revenue. 3 35. During the Class Period, HP was also the world's leading provider of 4 printers and printing supplies through its Imaging and Printing Group ("IPG"), 5 UP's third-largest business segment with $25.8 billion in fiscal 2011 revenue. 6 HP Acquires Palm and Presents webOS as the Base for Multiple Connected Devices 7 36. Palm is widely credited as having pioneered the portable, hand-held 8 computer device in the 1990s with its invention of the first Personal Digital 9 Assistant ("PDA"), the PalrnPilot. Palm's own operating system, Palm OS, 10 powered its PDAs. In January 2009, Palm unveiled its new mobile operating 11 system, called webOS, which was web-based, meaning that it was built on the 12 same technology used by many web browsers.' In June 2009, Palm released its 13 first smartphone powered by webOS, the Palm Pre, on the Sprint network. 14 37. On April 28, 2010, HP announced that it would acquire Palm for $1.2 15 billion. HP bought Palm in order to acquire webOS, calling it the cornerstone to 16 expanding the Company's PC business and building its own line of web-connected 17 mobile devices, including smartphones and tablets, in order to compete with 18 Apple's iPhone and Wad, which run on Apple's own iOS operating system, RIM's 19 Blackberry OS, and other mobile devices powered by Google's Android OS. 20 38. Bradley, who left Palm in 2005 to lead PSG at HP, was the 21 "mastermind" behind the Palm acquisition. 4 Bradley also characterized the Palm 22 acquisition as a "transformational deal" for HP in an increasingly mobile world. 23 24 WebOS can be described more specifically as an embedded Linux operating 25 system that hosted a custom user interface built on standard web browser technology. WebOS offered multi-tasking capabilities through a card-based 26 concept where each application ran as a card and "gestures" were used to navigate 27 among cards and perform actions. JP Manninen, "Meet the Mastermind of HP-Palm: Todd Bradley," 28 VentureB eat, Apr. 28, 2010.

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1 HP executives were also enthusiastic about the acquisition and conveyed the 2 Company's plans to "double down on webOS," stating that they were "very

3 excited about webOS" and saw "great potential" in it. 5 4 39. The news media generally applauded HP's acquisition of Palm, 5 pointing out the tremendous business potential that controlling its own mobile 6 operating system could represent for HP, including extending webOS to multiple 7 devices. As one columnist for All Things Digital, a respected technology news 8 website associated with the Wall Street Journal, explained: 9 In Palm's webOS, H-P has an elegant OS that it controls, 10 something the company--a longtime Windows shop—has 11 never had before. And with it, it can begin untethering itself 12 from Microsoft and differentiate its brand in a market in which 13 most devices not sold by Apple are all running some variant of 14 Windows. Remember, webOS is scalable. And while Palm 15 lacked the means to scale it, H-P does not. It's one of the 16 biggest tech companies in the world, and once it brings its 17 engineering acumen and marketing heft to bear on the OS, my 18 guess is we 'II see it evolve into a much larger platform that 19 extends beyond smartphones to tablets, ultraportables and 20 other connected devices. And H-P, for the first time in its 21 history, will be firmly in control of both its hardware and 22 software 6 23 24 40. Analysts also praised the acquisition. Altimeter Group called the deal 25 a "no-brainer" for HP, explaining that it used to be strong in mobile computing, but 26 John Paczkowski, "HP 'Doubling Down' on Palm's webOS," All Things 27 Digital, Apr. 28, 2010. 28 6 1d.

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1 did not make a strong transition to the smartphone market. 7 It observed that for

2 "[for WebOS to survive, it needs an operation on the scale of an HP." 8 3 41, HP completed the Palm acquisition on July 1, 2010. In a press release 4 that day, HP extolled the opportunity that the deal represented for HP: 5 The combination gives HP significant headway into one of 6 technology's fastest-growth segments with Palm's innovative 7 webOS platform and family of smartphones, plus a rich 8 portfolio of intellectual property from the smartphone pioneer. 9 HP's global scale and financial strength plus Palm's award- 10 winning webOS experience, as well as its acclaimed Pre and 11 Pixi smartphone product lines, enhance liP's ability to 12 participate more aggressively in the highly profitable, $100 13 billion srnartphone and connected mobile device markets. 14 15 42. 1W further stated in the press release that Palm's operations would be 16 integrated into HP's PSG division as the new HP Palm Global Business Unit (the 17 "Palm GBU"), reporting to Bradley. Jon Rubinstein ("Rubinstein"), Palm's CEO 18 since 2005, would join HP following the acquisition as Senior Vice President and 19 General Manager of the Palm GBU, which "will be responsible for webOS 20 software development and webOS based hardware products, from a robust 21 smartphone roadmap to future slate PCs and netbooks." 22 43. In a July 1, 2010 post on its new "Official HP Palm blog," HP 23 emphasized the potential for multiple webOS devices, noting that "[t]he 24 combination of Palm's trailblazing webOS and BP's strength as the leading 25 provider of everything from PC's, laptops, and printers to home electronics and 26 'Jon Swartz, "HP to acquire Palm for about $1.2B," USA Today, Apr. 29, 27 2010. 28 8 1d.

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1 enterprise systems promises an amazing roadmap of new tools for your mobile 2 web-connectedfuture." 3 C. HP Introduces Its Strate gy to Extend Web OS Across Multiple Devices as a Universal Software 4 Platform for a Connected Ecosystem 5 44. During the Class Period, Defendants repeatedly stated that HP would 6 extend webOS beyond smartphones and tablets to include PCs and printers by 7 sometime in 2011 or 2012 (i.e., by the end of 2012 at the latest), representing that 8 sales of webOS-enabled devices would exceed 100 million units annually, and thus 9 misleading the market into believing that development of webOS PCs and printers 10 was well under way. 11 45. On January 7, 2011, in an interview with CNBC at the annual 12 Computer Electronics Show (CBS), Bradley described HP's plans to unveil its new 13 webOS devices, centering on a webOS-based tablet, at an upcoming HP event. 14 This tablet, the TouchPad, would be the first tablet to ship with an operating 15 system other than Apple's iOS or Google's Android. Bradley declared that TIP 16 was "totally focused on the tablet market, totally focused on enabling that with 17 webOS," emphasizing that "we think of this broadly as the tablet is one piece of 18 that ecosystem, one piece of that connected experience that we're going to create." 19 Bradley explained that by "ecosystem," he meant that HP was planning to extend 20 webOS to PCs specifically, in addition to other devices: "[A]s we think about how 21 [webOS] enables everything from smartphones to tablets to PC's to potentially 22 other large screen devices, we see an enormous opportunity." 23 46, On February 9, 2011, HP hosted a major event in San Francisco 24 "Think big. Think small. Think beyond: webOS Announcement," (the "February 25 9 Event") at which it unveiled the TouchPad as well as two new webOS-based 26 srnartphones, the Veer and the Pre3. At this event, Bradley described these three 27 devices as "the building blocks" of EP's "long term strategy" to expand webOS 28 beyond tablets and sniartphones and across a wide range of products, totaling more

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1 than "100 million" webOS devices per year. Bradley stated that HP would "extend 2 the webOS footprint even further as the year progresses, taking webOS to other 3 connected devices, including-printers, some form factors9 you haven't seen before, 4 and as we think about how we enter markets, how HP enters markets, we do so 5 with meaningful intent, with significant resources, and our goal, our commitment, 6 is to extend the webOS experience across the broadest range of devices for our 7 customers and creating the largest install base possible for our developers." 8 Bradley specifically mentioned that HP's "plans to bring webOS to the HP device 9 that has the biggest reach of all: the personal computer," would occur "later this 10 year." HP also announced at the February 9 Event that developers large and small, 11 including Facebook, Amazon and Selfaware Games, as well as content providers 12 like Time Inc. and hybrid providers like DrearnWorks, were partnering with HP to 113 develop mobile applications for its webOS devices. 14 47. Bradley emphasized the importance of webOS-enabled connectivity 15 1 between devices: 16 Since acquiring Palm, we've deployed hundreds of additional 17 engineers to what was already a very talented team of 18 designers with an awesome leader in Jon Rubinstein with a 19 phenomenal vision of connectivity. . . . When Jon and I had our 20 first really serious sets of discussions about the future of the 21 connected device world, the connected device market, I was 22 convinced that we could make a contribution. . . . So we have 23 more and more people accessing more and more cloud based 24 content from more mobile devices. I think that's a lot of 25 'more's.' But no one before today has come forward, 26 27 A "form factor" can be described as referring to the physical size and shape 28 of a computerized device.

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l developed a solution that works ubiquitously across these 2 devices, that provides that consistent experience, a solution that 3 responds to how you look up information, how you access 4 entertainment, how you stay connected on the go, a solution 5 that gives you effortless access to that digital universe, no 6 matter which HP device you use. This work is precisely the 7 place we're focusing on delivering value by seamlessly 8 connecting our customers' worlds, seamlessly connecting all 9 that content, and our intention with webOS devices is really 10 enable people to transform how they think, how they feel, and 11 bow they connect, and we start with unique and differentiated 12 technology, then we'll apply it across aporfolio in ways that 13 is going to thrill, engage, frankly excite consumers and 14 developers alike. 15 48. The February 9 Event included a chatty demonstration of how webOS 16 enabled the apparently seamless connection between the webOS smartphones 17 (largely developed at Palm prior to the acquisition) and the TouchPad, or what the 18 Company called "the magic of HP webOS": 19 20 Today, HP is entering the mobile landscape with a 21 breakthrough new product that shows the power ofwebOS as a 22 multi-device platform.... And best of all, using our next 23 generation TouchStone technology, our new web OS devices 24 can actually share information wirelessly, so they work better 25 together.... TouchPad and Pre 3 talk to each other so I can do 26 all my texting from right here. I can also take phone calls 27 from [the TouchPad] so I don't have to go pick up my phone, 28 and using Touchstone technology, the setup is super easy, just

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1 one touch, and that's all it takes.... These are a couple of 2 examples of how webOS helps me seamlessly integrate my 3 devices, and I'll show you a few more examples shortly.... So 4 that's video calling from my TouchPad to Jon's Pre 3.... 5 Going to Marnacita. I've never been there before, so let me 6 check it out, launch their website, hungry, wow, that looks like 7 a nice restaurant! I can definitely see myself having a couple 8 of margaritas there tonight! I need to check out their menu in 9 the taxi, but I'm not bringing my TouchPad with me. 10 However, I am bringing my Pre 3, and when we bring the two 11 together, we can make magic happen. So here's my Pre 3 on 12 the TouchPad, something's going on, launches the browser, 13 let's put it in landscape, a few moments for the page to load 14 here. A lot of people hitting their site, I assume. And there 15 you go. We call this Touch 2 Share. Using Touchstone 16 technology, you can easily pair webOS devices; you can 17 exchange information between them so they can work better 18 together. And that, ladies and gentlemen, is the magic of HP 19 web OS. 20 49. Analysts were impressed. A February 9, 2011 Wells Fargo report 21 commented, for example, that "this [webOS] software release looks very good and 22 topped our expectations," concluding that it was "a very compelling operating 23 24 system release." 50. A February 10 J.P. Morgan report similarly stated: 25 26 We believe that shares of Overweight-rated Hewlett-Packard 27 stand to enjoy a positive 'shot-in-the-arm,' following 28 yesterday's intro of its tablet, TouchPad. We had highlighted

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1 this tablet announcement as a potential near-term catalyst. In 2 our view, the hardware and software specs of the TouehPad 3 appear to be better than what investors expected. 4 51. The J.P. Morgan report also emphasized that: 5 6 web OS could represent a new line in the sand for PCs, not just 7 tablets. HP foreshadowed the increasing reach of webOS, 8 indicating that the operating system would reach the 9 company's notebook PCs later this year. We think that this 10 plan could gradually chip away at the long-held dominance by 11 Windows. 12 52. Consistent with Defendants' positive statements, and analysts' bullish 13 responses, the February 9 Event drove FIP's stock to its Class Period intraday high 14 of $49.39 on February 10, 2011, before closing at $48.54 that day. The stock 15 remained buoyed thereafter, reaching its high Class Period close of $48.99 on 16 February 16, 2011, four trading days later. 17 53. During the ensuing months, Defendants repeatedly touted webOS's 18 "seamless" connectivity over a broad device "platform." For example, during 19 HP's February 22, 2011 earnings call for the second fiscal quarter of 2011, 20 Apotheker, noting that the "enthusiasm and anticipation for webOS exceeded even 21 our most optimistic expectations" stated that HP would leverage webOS to 22 "provid[e] a differentiated seamless experience across our tablets, smart phones, 23 printers, PCs and future form factors." 24 54. On March 14, 2011, fliP held a "much anticipated" HP Summit for 25 industry analysts and the media.' ° Apotheker represented that HP was "getting 26 27 10 Benjarnin Pimentel, "After 'Rocky' Start, H-P Chief Aims For Reboot," 28 Wall St. f, Mar. 14, 2011.

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1 ready to roll out webOS on a massive scale," such that after the launch of the two 2 new webOS smartphones and the TouchPad in the summer, "there will be wave 3 after wave of technology coming out to support the webOS platform." He further 4 promised that HP would put webOS across a wide range of its products, including 5 PCs and printers, with the plan "to reach 100 million devices a year" so that HP 6 would enable it to "become a very massive, very broad platform." As Apotheker 7 succinctly explained, "going forward we don't intend to play in the junior league it 8 this business either." 9 55. Bradley also gave a presentation on HP's webOS "connectivity" 10 strategy, in which he said that HP's "goal with webOS and our unique opportunity 11 is really to extend webOS to the broadest range ofproducts available" and that HP 12 will "be extending the ecosystem beyond smart phones and tablets," as shown in 13 the two slides from his presentation below. Bradley further stated that 14 "/dJevelopment teams across HP are working to bring webOS and the webOS 15 experience to the Windows PCs," and specified that "[n] ext year, we'll migrate 16 tens of millions of web connected printers into the ecosystem." 17 18 19 20 21 22 23 24 25 26 27 28

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I 2 3 4 5 6 7 8 9 10 11 12 13 56. On May 17, 2011, before the opening of trading, HP held a 14 conference call for investors and analysts to discuss the Company's second quarter 15 2011 financial results. During the call, a Morgan Stanley analyst asked about HP 16 having missed its earnings guidance two quarters in a row and potentially exiting 17 the PCs business entirely. Apotheker emphasized HP's "great strategy to execute 18 towards our connectivity approach" (referencing the webOS product line), noting 19 that "we are very excited about our TouchPads coming out in particular in the 20 summer. And as we all believe that there will be a convergence of these different 21 form factors over time—TouchPads, PCs, et cetera, and in particular, notebooks— 22 we believe this is a great opportunity for HP to participate in this." 23 57. Analysts came away satisfied that HP would continue leveraging 24 webOS to grow its PC business. Credit Suisse, for example, reported that 25 "[m]anagement are arguing for a recovery in consumer PCs driven potentially by 26 the introduction of the TouchPad and tablet strategy." 27 58. Apotheker continued to make assurances regarding a broad webOS 28 device platform in the weeks leading up to the release of the TouchPad to the

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1 market. On June 1, 2011, Apotheker gave a sit-down interview about HP's webOS 2 plans at the All Things Digital D9 conference in Los Angeles. He reiterated that 3 HP would "create as holistic an ecosystem as we can" for webOS, and declared 4 that in addition to the TouchPad and webOS srnartphones, HP would put webOS 5 "on every PC that we'll ship" and "on every printer we ship above $100," so that 6 that number of webOS-enabled devices would total "100 to 110 million devices a 7 year." 8 59. The next day, at a Sanford C. Bernstein & Co. Strategic Decisions 9 Conference, Apotheker reinforced that 1W would build a broad webOS device 10 platform, assuring the market that "webOS is ready for prune time." He also 11 "reconfirm[ed] that webOS will be available on PC's, on top of Windows, which 12 creates a whole new market dynamic for webOS" and added that "we are going to 13 put webOS also on printers," to "create the kind of apiatform of about 100 million, 14 110 million devices a year." 15 D. Defendants Had No Basis for Their Repeated Statements Re garding WebOS PCs or Printers 16 Contrary to Defendants' repeated assertions that webOS would be on 17 "millions" of PCs and printers in a short time frame (varying from the end of 2011 18 to the end of 2012, but no later), HP'S webOS software team was stretched to 19 capacity trying to ready the problematic TouchPad for launch, and had no 20 resources available to work on developing the webOS code for printers and PCs at 21 any time during the Class Period - making it impossible for webOS-enabled PCs 22 and printers to be market ready in Defendants' asserted time period. Nor was there 23 ever a POR for webOS PCs and printers. 24 25 26 27 28

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1 1. HP's Development Cycle 2 61. Confidential Witness ("CW") 1 11 was a Vice President of Software 3 Engineering in the Palm GBU in Sunnyvale, California from October 2010 to July 4 2011, and has more than twenty years of software engineering experience. CW1 5 led the team developing the webOS software platform for the TouchPad, 6 specifically an updated version of webOS, codenamed "Dartfish," that was 7 released on the TouchPad as webOS 3.0. According to CW1, PSG consisted of 8 three GBUs: desktops, laptops/notebooks, and Palm. The Palm GBU was headed 9 by Rubinstein, who reported to Defendant Bradley. CW1 reported to Ari Jaaksi, 10 the Senior Vice President of webOS, who reported to Rubinstein. 11 62. CW1 described the development cycle at HP in detail. According to 12 CW1, product development begins with a "concepting team." The concepting 13 team was responsible for implementing parts solutions and going through "possible 14 options" for development. Once the concepting team comes up with a proposal, 15 they make a presentation to someone at Rubinstein's level (i.e., a Senior Vice 16 President or General Manager of a segment like the Palm GBU). That person 17 would then have to make a recommendation before the official Plan of Record 18 ("POR") is constructed by the Engineering Project Manager ("EPM"). CW1 stated 19 that a POR would contain the features committed to the device, the persons 20 involved in development, the milestones, budget and a description of the product 21 they were developing. The POR would then go to the "producting team to 22 implement." CW1 further described a POR as "a commitment to build something; 23 what we intended to sell in stores," and accordingly distinguished a plan from such 24 terms as talk, discussion, and exploration. CW1 described "discussion" as "just 25 talk of what we might do, with no commitment." 26 27 ' All CWs are referred to in the masculine to protect their identities. A list of the confidential sources, with their descriptions and dates of employment, is 28 attached hereto as Appendix A.

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1 63. CW5 was a Vice President in HP's webOS division from July 2011 2 through July 2012, replacing CW1. CW5 reported to Jaaksi, Senior Vice President 3 of WebOS, and was in charge of the engineering segment of webOS, supervising 4 the production of webOS codes. CW5 described the POR as a project plan that 5 would have detailed a timeline as well as budget details and schedules. According 6 to CWS, the POR at HP was the operational and "architectural document." 7 64. CW6 was Director of Product Management from September 2009 8 through June 2012. Until the last month of his tenure, CW6 reported to Vito 9 Salvaggio, former Vice President of Product Management. According to CW6, his 10 division changed names during his tenure but was consistently responsible for 11 applications and software. During the relevant time period, CW6's team was part 12 of Consumer Applications & Software ("CAS"), and worked in conjunction with 13 other HP divisions including the webOS GBU. CW6 explained that his team was 14 technically part of the PC software group. CW6 confirmed that to obtain a POR, a 15 team would come up with a concept, vet it, make a proposal, then would have to 16 submit the proposal for possible approval. 17 65. CW7 was a Senior Wireless Engineer in the Palm GBU from April

18 25, 2011 through January 6, 2012. He was part of the wireless team that focused 19 on the integration of wireless functionality on the TouchPad and reported to Rob 20 Brown, Senior Manager for bluetoothlwifi. According to CW7, a POR detailed t 21 timeline, an operational plan and the requirements for the plan. 22 66. CW8 was a former Supply Chain Operations/Product 23 Engineer/Program Manager in the Global Services area of HP from 1995 until

24 August 2011. CW8 was responsible for servicing the hardware product lines, 25 specifically repair activity for commercial laser jet printers, and also managed 26 outsourced vendors who handled warranty repair work. CW8 explained that he 27 worked in the commercial imaging and printing division of the Services Group and 28 that there was a "sister" organization in the PSG group that handled the servicing

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1 of the consumer business products. CW8 reported to Tim Knop who was the 2 Americas Supply Chain Program Manager. CW8 confirmed that a POR is for a 3 project that is approved, funded, and allocated resources and budgets. 4 67. CW9 was a Senior Software Quality Assurance ("QA") Engineer at 5 HP from July 2010 until April 2012, reporting to Ekta Sharma, former QA 6 Manager Applications Manager, WebOS, who in turn reported to Margaret 7 Burgraff, former WebOS QA Senior Director. CW9 supported groups working on 8 implementation of WebOS applications after a product had a POR, creating test 9 ware, test scripts, test plans, and test cases. CW9 described a POR as an actual 10 plan of "implementation" that would include "specs, actual people," requirements 11 and specific dates. 12 2. Neither webOS PCs nor webOS Printers Progressed Beyond "Concepting" 13 68. CW1 confirmed that "neither Printers or PCs had a plan-of-record" to 14 develop devices that were webOS-enabled. CWI explained that a POR for a 15 webOS-enabled device would have required Rubinstein's approval to involve 16 CW1 's team - i.e., the webOS team. According to CW1, any webOS-enabled 17 device would require his team's involvement to receive the appropriate webOS 18 coding for that device, necessitating Rubinstein's prior approval. 12 CWI stated 19 that no other team was "cutting" codes for webOS during the Class Period. It was 20 CW1 's recollection that neither Printers nor PCs received Rubinstein's approval 21 and, therefore, that neither device progressed beyond the concepting phase. 22 69. CW1O, former Director of Product Delivery Engineering from August 23 2010 to January 2012, held two different roles within the webOS division of HP. 24 First, CW 10 led a team working on the Pre, Pre 2 and Pre plus. CW 10 then 25 26 12 CW1 ijoined HP as part of the Palm acquisition in July 2010, and was the 27 former Chiet Architect of webOS from January 2011 to February 2012 reporting to Jaaksi, Senior Vice President of WebOS. CW 11 confirmed that anything1 to do 28 with webOS would have gone through him as Chief Architect.

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1 transitioned to the "platform team" within the webOS division at the beginning of

2 2011, and reported to CW12, former Vice President of Product and Wireless

3 Development in the Palm GBU. CWI 0 explained that he was part of the product

4 delivery team in charge of program management, quality assurance, and software

5 development. CWI 0 worked closely with other teams within webOS as well as

6 other divisions in HP on software integration, and his responsibilities included

7 presenting projects to HP executives. CW10 confirmed that the webOS division

8 maintained only one set of source codes and one operating system for all

9 personnel. According to CW1O, it was intended that the webOS division service

10 other divisions and provide a "coherent story" for all the developers, such that the

11 webOS division could make any necessary adaptations for a particular product.

12 CW1 0 explained by way of example that on printers, the mailware required

13 additions for scanning and printing, adaptations which the webOS division would

14 have to build into the source code. 15 70. CW1 0 stated that, from a security and access perspective, the keeper

16 of the code was CW1 1, former Chief Architect throughout the relevant time

17 period. According to CW1 0, CW1 1 was in charge of all access control, which was

18 based on a standard source system, and also dictated the policy regarding who

19 could access the code. CW1 0 confirmed that webOS printers and PCs remained at

20 the concepting phase during the Class Period. According to CW10, prior to

21 entering into a POR for these devices, the webOS division would need to develop

22 "not only a viable webOS experience but a superlative one." 23 71. According to CW1, the PC division (located in Ft. Collins, Colorado)

24 had a concepting team that was exploring webO S-enabled PCs but that it had neve:

25 gone past the "concepting" phase. CW1 recalled that the concepting team began

26 their exploratory efforts around November 2010, because he began interfacing witi

27 them soon after joining HP in October 2010. CW1 recalled attending an executive

28 staff meeting in late winter/early spring 2011 where the PC division presented theii

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1 concept. Rubinstein was also in attendance at this meeting as well as Salvaggio,

2 Vice President of Product Management. According to CW 1, Matt flames, Senior

3 Director of Infrastructure as a Service (TAAS) Engineering, Cloud Service, and the

4 head of the concepting team, made the presentation. CW1 explained that the

5 reason he was invited to attend the meeting was that if Rubinstein recommended

6 that the concept go forward and a POR created for PCs, CW1 would need to give

7 the PC team access to webOS codes. CW1 stated that following the presentation,

8 Rubinstein never made the recommendation to go forward and a POR for PCs was

9 never created. 10 72. CW1 also confirmed that he never gave the webOS codes to anyone

11 HP's Imaging and Printing (IPG) division for use on printers. With respect to

12 printers, according to CW 1, there was a very small group of HP employees (no

13 more than 10) in San Diego who were brainstorming ways of putting webOS on

14 printers. This was compared to the approximately 1,000 HP employees in the

15 Palm GBU working on webOS smartphones and tablets. According to CW1, this

16 San Diego group was part of HP's printing group, which was separate from PSG

17 and the Palm GBU. The San Diego printing group was exploring a new model of

18 printer, codenamed "Zeus," which theoretically would run on webOS and have an

19 innovative retractable or detachable display. According to CW 1, no plan ever was

20 made to "cut" a version of the webOS software for a printer. A Palm GBU

21 employee with the initials A.G. was designated to be the liaison between the Palm

22 GBU and this printing group in San Diego, but A.G. did little work and was

23 completely ineffective. According to CW1, there never was a POR for webOS-

24 based printers; there was talk, but there was never any plan. CW1 would have

25 known of such a plan based on his position overseeing web OS software

26 development. Because CW1 's team had the webOS software code, it would have

27 had to be involved in such a plan. 28

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1 73. CW9 confirmed that webOS products "didn't exist anywhere else 2 outside our [the webOS division's] building." According to CW9, any product that 3 required webOS applications would come to him. There were others in the Quality 4 Assurance department that would have dealt with OS issues but anything related to 5 webOS "stayed within the building." CW9 further confirmed that other HP 6 divisions would have required support from his division to enable any devices with 7 webOS. CW9 stated that had there been a POR for printers and/or PCs, he would 8 have been aware of it given his visibility into the webOS division's engineering 9 side. CW9 never saw or heard about a POR for either webOS printers or PCs. 10 CW9 also never heard any of his co-workers discussing actual initiatives to expand 11 the webOS ecosystem to printers or PCs. 12 74. CWI2 was a former Vice President of Product and Wireless 13 Development in the Palm GBU from July 2010 to January 2012, reporting directly 14 to Jaaksi, Senior Vice President of WebOS. CW12 supervised a team that was 15 responsible for all the "hardware products" within the webOS division, specifically 16 shipping and installing webOS on products as well as all the radio devices (i.e., 17 Bluetooth and wireless). CW12 also supervised the quality assurance team within 18 the webOS business unit, and estimated that 215-220 employees reported to him. 19 75. CW12 confirmed that concepting teams within TPG and the PC 20 divisions were exploring webOS-enabled PCs and printers. According to CW12, 21 the idea was to take the software running on the TouchiPad and convert it for use 22 on the printers and PCs, but added that the development of these products were in 23 the nascent stages. CW12 explained that webOS required much more memory 24 (approximately one gigabyte) than printers had, and HP could not just "load" 25 webOS onto a printer because the memory "footprint" was too large. Accordingly, 26 CW12 stated that the webOS team would have been the only engineering team 27 involved in any potential integration of webOS onto PCs and printers. 28

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1 76. An internal roadmap document, reprinted below, indicates the release 2 of the Veer in or about June; the release of the 16 and 32GB TouchPads in or about 3 July; the 64GB and 4G versions of the TouchPad in or about August; the release of 4 the Pre3 and "Opal" in the Fall; and "More to come" thereafter. The roadmap does 5 not reference printers or PCs: 6 7 8 9 10 11 12 Jidy Fa * Veer • Tot. -iPd ' Moio to 13 ThuchPd 4GB Pre 14 16/32GB • OPAL 15 - Juno Auqust 16 17 18 19 20 21 22 23 24 25 26 27 28

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 77. According to CW1, who reviewed the above document, the document 18 is authentic and dates from the late spring of 2011. CW1 describes the document 19 as "an abstraction of the actual roadmap" because certain smartphones that were 20 later canceled, including the "Windsor" and "Meko," are not referenced. 21 Regardless, according to CW1, the document supports the allegation that webOS- 22 enabled PCs or printers never were approved for Plans of Record. 23 78. CWI2 explained that internal roadmaps had only a hypothetical 24 schedule and did not include resource allocation within webOS. CW12 further 25 explained the schedule was hypothetical based on proper resources and manpower, 26 and the "scope of work" would specify "man weeks" needed to hit specific 27 timelines. The roadmap above outlines the release of specific webOS products 28 without allocating resources to each product, consistent with CW12's general

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1 description of a roadmap. Thus, this internal roadmap was antecedent to the 2 official POR described by above by CWs 1, 5, 8, and 9, which would include the 3 names of the persons involved and outline milestones - and which would require 4 Rubinstein' s explicit approval. 5 79. CW1 3 was a former Product Manager for tablets and software in the 6 image and printing division at HP, located in San Diego. CW13 was employed by 7 HP from September 2010 through April 2012, reporting to Terence Ngai (Director 8 of Cloud Services, Enterprise Marketing), Louis Kim (Director of Product 9 Management Consumer Printing, Web Services til May 2011 and then Vice 10 President, Advance Platforms), and Linda Swanistrorn (Senior Director, Industry 11 Market Development). CW13 stated that he was "absolutely in the mix" when it 12 came to printers and webOS. CW13 confirmed that the printer group had a webOS 13 printer concept and discussions within their division, but that there was "never a 14 commitment" to support the concept from the webOS division. According to 15 CW 13, the concept was that all printers ($199 and up) would work webOS native1 16 and then all printers going down to $99 would support webOS applications. CW1 2 17 also explained that the lower-end printers intended only to support webOS 18 applications (i.e., not run webOS natively) would have required a modification of 19 the CPU processor and printer memory before they could run webOS applications. 20 CW1 3 stated that these concepts were discussed internally within the printer 21 division but never agreed on with the webOS division. 22 80. CW13 stated that the webOS division "never produced any 23 that said they had a POR, their plan of record was the immediate future and the 24 immediate Palm devices (i.e., the TouchPad and mobile devices) that they needed 25 to launch. . . all of their roadmaps had Palm handsets on it" and no references to 26 printers or other products other than tablets and mobile devices. 27 28

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1 81. CW1 3 confirmed that TPG required the webOS division to provide 2 them with a version of webOS that was "optimized to run on the printers" because II IPG could not have done that without the webOS team's involvement. 4 82. CW6 confirmed that webOS PCs and printers were only in the 5 concepting phase. 6 83. Consistent with the accounts from the webOS team that no webOS 7 printers or PCs would be market ready by the end of 2012, HP did not project any 8 revenue for webOS-enabled PCs or printers for 2011 or the entirety of 2012. CWI 9 saw several versions of an internal business plan titled "Plan V2 Palm GBU FY 10 11 Operational Plan." CW1 described it as a PowerPoint presentation used at a 11 meeting attended by HP executives and likely sent via email prior to the meeting. 12 CW1 explained that the Plan V2 was developed by the finance team, headed by 13 Rodrigo Brumana, and reviewed by Apotheker. CW1 worked closely with 14 Brurnana, who ran the numbers and prepared Plan V2. According to CW1, Plan 15 V2 contained all of the analytics for the finances for different years. CW1 knew, 16 from CWI 's boss Jaaksi (Senior Vice President of WebOS), that Apotheker 17 reviewed the V2 and referenced it in weekend meetings with the executive staff. 18 CW1 explained that "Plan V2" provided the product roadmap, financial analytics 19 and projections for each planned Palm GBU product, including expected release 20 dates. According to CW1, webOS-based PCs or printers were never included in 21 any version of the webOS product roadmap in Plan V2. Rather, according to 22 CW1, the product roadmap was limited to tablets and smartphones; namely, the 23 TouchPad, the Veer and Pre3 smartphones, other tablets (including a smaller tablet 24 codenarned "Opal"), and other smartphones (including ones codenamed "Windsor" 25 and "Windsor Thin"). 26 84. CW1 stated that the V2 covered the entire webOS division, and 27 confirmed that there was nothing in the V2 for 2011 or 2012 about printers or PCs. 28 According to CW1, there were no revenue projections for webOS based PCs or

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1 printers in FY20 11 or FY20 12, further stating "God no; of course not. There was 2 no plan of record." 3 85. CW14 was a former Regional Solution Specialist in webOS from July 4 2010 to October 2011, and described his job at HP as being a "webOS subject 5 matter expert." CW14 explained that it was his responsibility to "overlay and 6 support" the PSG teams in the Northeast and visit with HP's largest enterprise 7 customers to extol the benefits of webOS. CW14 stated that he never saw an 8 actual printer (prototype or otherwise) with the webOS operating system on it, and 9 was not aware of any timeframe for the introduction of webOS printers and PCs. 10 CW14 stated that his group was first involved with the promoting and marketing of 11 the TouchPad, and that if there had been a webOS-enabled printer to promote, his 12 group would have been responsible for promoting it. CW14 further stated that if 13 there were a webOS-enabled printer in existence, he would have been trained on it. 14 86. CW7 confirmed that any work on developing webOS PCs or printers 15 was in the "very early" stages and that the other divisions were "still trying to 16 understand how webOS operated." CW7 added that it was "just the groundwork." 17 CW7 could not identify any personnel within webOS actively working on these 18 products, and that the only meeting he recalled attending about these products was 19 run by someone outside the webOS division. 20 87. CW8 stated that his group was told to expect future products in the 21 "laser jet roadmap" that would be webOS enabled. According to CW8, they woul 22 be dealing with webOS-enabled laser jet printers sometime in the spring of 2013. 23 3. The webOS Software Team Focused Exclusively on the TouchPad 24 88. The webOS software team was preoccupied with the problem-ridden 25 ToucbPad, trying to get it ready for launch by the summer of 2011. Several former 26 employees within the webOS division confirmed that the team's focus was solely 27 28

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1 on the TouchPad during this time, with no resources available for "cutting" code 2 for PCs or printers. 3 89. CW1 0 explained that the development of printers and PCs that could 4 operate on a webOS platform was a more long term goal. CW10 stated that tablets 5 took priority because they could be developed and produced in a one year time 6 frame versus printers (with webOS) that would take to 2-3 years to produce. 7 90. CW1 0 explained that producing webOS printers would take 2-3 years 8 because webOS would need to be adapted to a different form factor and input 9 modality with different buttons, different use cases, and different screen sizes. 10 CW1 0 further stated that another issue was the development cycle of printers, 11 which advance on a much slower time frame than mobile devices, and that even 12 after webOS could be integrated it would have taken additional time to certify and 13 then ship the printers. CW10 explained that the hardware requirements and 14 changes for printers would source from different points and required a much longei 15 lead time then adapting the operating system for tablet and mobile devices. In any 16 event, CW1 0 repeated that no-one in the webOS division had time to devote to 17 these products given the urgency to launch the Touchpad. 18 91. According to CW1 0, Jaaksi (Senior Vice President of WebOS) and 19 Rubinstein told CW1O to send an email to the IPG group around April 2011, 20 instructing them to cease all plans to integrate webOS into their products without 21 executive level approval. CW10 recalled the email well as he wrote it. According 22 to CW1O, the email essentially stated that in preparation for the launch of the 23 tablet, all resources within the webOS division would be tied up and not available 24 for the printing division. CW10 stated that after he sent the email, the printing 25 division knew that they could not bother anyone involved in the launch of the 26 tablet. CW10 confirmed that he sent a similar email to employees in the PC 27 division, including Matt Haines, Senior Director of IaaS Engineering, Cloud 28 Services, within a week of the email CW10 sent to TPG. CW10 added that the

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1 emails were meant to convey that the webOS division had a goal (the tablet) and 2 they needed to focus on that goal. 3 92. CW13, who worked in the IPG division, confirmed that at a more 4 senior division level the sole focus was on the TouchPad and mobile devices. 5 According to CW13, the printing group visited HP's Sunnyvale offices to discuss 6 developments but it was clear that the webOS division would not devote any 7 resources to the imaging and printing division. According to CW1 3, printer 8 integration was obviously low priority for the webOS division. 9 93. CW13 recalled receiving the email from the webOS division stating 10 that all webOS resources were devoted to the TouchPad. CW13 recalled the email 11 stating that webOS was "finished engaging" with the printing division without 12 "executive approval." According to CWI3, the email was forwarded throughout 13 his division. CW1 3 also recalled meetings in his division where "no further 14 engagement" with the webOS division was discussed. CW13 stated that Tuan 15 Tran, Vice President and General Manager, Tnkjet Consumer Solutions in IPG, 16 definitely received the email as well the other Vice Presidents and Directors within 17 IPG. 18 94. CWI 3 further recalled seeing internal roadmaps that acknowledged 19 activity (i.e., progress) when it came to integration of webOS onto printers. 20 According to CW 13, it was well known internally that printers were not on the 21 webOS division's roadmap, because webOS needed to get tablets and smartphones 22 out before focusing any resources on printers. CWI3 resigned in April 2012 23 because he was frustrated with all the time spent by his division in planning for the 24 Palm integration without the support of the webOS division. 25 95. CW1 confirmed that he received calls from IPG that Rubinstein 26 instructed him not to answer because the "TouchPad was super important." CWI 27 stated that his team focused solely on the tablet and mobile devices (Pre3 and 28 Veer), which "more then occupied" his team. CW1 added that some people on his

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1 team were still fixing "bugs" on the 2010 webOS releases, and that the team had 2 no time for printers or PCs. 3 96. CWI2 confirmed the prioritization of the TouchPad, stating that the 4 TouchPad was the "company focus" and there was "nothing more important" then 5 getting it out to the market. CW12 added that that message was "from top to 6 bottom," and came from executive management at HP, "including Todd Bradley." 7 CW12 reiterated that there was "no product higher then getting the TouchPad." 8 97. CW9 focused mainly on the TouchPad during the Class Period, and 9 confirmed that given the prioritization of the TouchPad and mobile devices within 10 webOS, there was no capacity for other products such as PCs or printers. 11 98. CW15 was a Director of Engineering, webOS System & UT Platform, 12 who joined HP through the Palm acquisition and resigned in December 2011. 13 CW15 reported first to CW1, former Vice President of Software Engineering, and 14 then to CW5, former Vice President of Development webOS. CW15 oversaw a 15 team of engineers that worked on all webOS software, and confirmed that CW1 S's 16 division was focused mainly on the TouchPad and mobile devices. CW1 5 was 17 aware that teams in other divisions were exploring the integration of webOS onto 18 PCs and printers but stated that they were "not interacting with the webOS team." 19 According to CW15, CW15's own team never had an "official roadmap" reflecting 20 the integration of webOS onto PCs and printers. CW15 described the roadmap as a 21 PowerPoint document controlled at Rubinstein's level. According to CW1 5, 22 Apotheker and Bradley would have received the roadmap. 23 99. CW1 5 confirmed that although the printer division in San Diego and 24 the PC division in Colorado wanted to integrate webOS onto their devices, none of 25 their concepts were adopted by the webOS team and there was no immediate 26 intention to focus on them. CW1 5 stated that the webOS group did not have the 27 capacity or resources to "sustain" any development plans beyond the TouchPad 28 and the phones, and that there was no day-to-day communication with the PC and

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1 printer divisions. CW1 5 explained that given the tight schedule for the TouchPad, 2 all efforts were focused on that launch. CW1 5 confirmed to enable either printers 3 or PCs with webO S,, those respective divisions would have needed assistance from 4 his (i.e., the webOS) division because working with webOS was like "learning a 5 new language." 6 100. According to CW1 5, immediately after the Palm acquisition in July 7 2010 the webOS division was asked to support HP's other groups, but that very 8 quickly that support was phased out because all "energy" had to be spent on the 9 TouchPad. CW1 5 recalled that the decision to stop supporting other HP division 10 occurred around August 2010, and the "focus shifted" to the TouchPad. CW15 11 explained that when the TouchPad project kicked into high-gear, webOS support 12 for the other divisions ceased. 13 101. CW1 5 stated that the decision to change focus was made by 14 Rubinstein, and that had Rubinstein not made the decision to cease supporting or 15 "lock-out" HP's other divisions, CW15 and his colleagues in the webOS division 16 would have "continued to be pestered by the printer and PC divisions." According 17 to CW1 5 , Rubinstein communicated the decision to stop supporting the other 18 division to Bradley and Apotheker, and Bradley in turn communicated the decision 19 to the executives in the other divisions, including the PC and printer groups. 20 102. CW1 6 was an Executive Assistant at HP from March 2011 through 21 March 2012, and worked for Nathan Kelly, former VP of Global Operations & IT, 22 and Lee Ott, former Director of Product Marketing and Product Management. 23 CW16 described the focus on the TouchPad as "fast and furious" as soon as he 24 joined the Company in March 2011, stating that they were "so fast and furious in 25 trying to release product (the TouchPad)" that printers and PCs were never brought 26 to his attention. According to CW1 6, Kelly (along with others) met regularly with 27 Apotheker and Bradley to discuss production numbers, deliverables and timelines 28 for webOS products. CW1 6 did not attend these meetings but recalled that they

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1 occurred on at least a weekly basis, and that they were held in Sunnyvale or by teleconference. CW1 6 added that Kelly often spoke with Bradley and Apotheker ii "after hours" as well. According to CW1 6, Bradley and Apotheker came to 4 Sunnydale on a regular basis. CW 16 also recalled receiving internal roadmaps 5 from either "Leo's admin or Todd's admin" to give to Kelly prior to their 6 meetings. 7 103. CW5 confirmed that when he joined HP, just after the TouchPad 8 launched, the TouchPad was the "big emergency at the time," as its problems 9 persisted after its premature launch, so all of CWS 's efforts were focused solely on 10 that product. CW5 never attended any meetings about webOS-enabled printers or 11 PCs prior to the August 2011 announcement that ended the Class Period. CW5 12 also never saw POR for either webOS PCs or printers, and had never been 13 involved in discussions relating to the launch of such products. According to 14 CW5, his involvement would have been necessary in any development of webOS 15 for printers and PCs, as his responsibilities at HP included enabling other teams to 16 utilize the webOS platform and to facilitate the dialogue between different 17 divisions. 18 104. CW6, who helped develop webOS applications for products such as 19 the TouchPad, confirmed that the entire Company was focused on the launch of 20 TouchPad, stating that "they put a lot of eggs in that basket." 21 105. CW17 was a Senior Finance Manager/Global Operations from July 22 2010 until May 2012, and reported to Monica Hushen, Senior Director of Global 23 Operations Finance for webOS. CW17 explained that he was responsible for 24 product profitability, and was also involved in revising and managing the warranty 25 components of products, as well as setting up the supply chain before the products 26 went to market. CW 17 added that after the product launch his group would review 27 product quality and ensure it was "on target." CW17 stated that when it came to 28 resources, i.e., people, being allocated to various projects in BP's webOS device

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1 ecosystem, Rubinstein had a "laser focus." CW17 explained that while few people 2 were exploring (i.e., cone epting) the integration of other devices into the 3 ecosystem, the mobile division was focused on the TouchPad and ensuring the 4 timeline for its release was met. According to CW1 7, even with this focus the 5 TouchPad was still delayed by a month because of its software. 6 106. Compounding the lack of webOS resources for developing code for 7 webOS PCs and printers was a hiring freeze in place at the time. In a May 4, 2011 8 memo to executives including Bradley, Apotheker urged his deputies to "watch 9 every penny and minimize all hiring," stating that "[w] e have absolutely no room 10 for profitless revenue or any discretionary expenditures," and that the Company's 11 "headcount plans. . . for 2H1 1 are unaffordable given the pressures on our 12 business."13 As Bloomberg reported, "[t]he memo indicates that the company

13 continues to come under pressure and suggests job cuts are in the offing." 14 14 107. Accordingly, the webOS division could not hire additional manpower 15 for developing webOS for PCs and printers. CW12 confirmed that the webOS 16 group had discussed potentially hiring more people. According to CW12, they 17 drawn up a hiring plan but never got a chance to actually "execute" it. 18 4. Defendants' False and Misleading Timeline for web OS PCs and Printers 19 108. According to CW1, in and after February 2011, Apotheker and 20 Bradley repeatedly made public pronouncements that HP would put webOS on 21 PCs and printers when that had not been discussed internally and, as described 22 above, when there were no plans to do so. CW1 characterized Apotheker in 23 particular as a loose cannon and stated that he and Palm GBU personnel he WO] 24 25

26 13 Arik Hesseldahl, "Read Leo Apotheker's 'Tough Quarter' Memo in Full," 27 All Things Digital, May 19, 2011. 14 Aaron Ricadela and Serena Saitto, "Hewlett-Packard CEO Expects 'Tough 28 Third Quarter,' Memo Says," Bloomberg, May 16, 2011.

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I with, including many project managers and Rubinstein himself, were surprised and 2 even horrified upon hearing such pronouncements. 3 109. CW1 recalled Bradley's sweeping assertions starting in early 2011 4 about expanding webOS to PCs, when there were no internal plans to support them. In particular, CW1 recalled looking at the script for the February 9 Event, at 6 which Bradley announced that UP would put webOS on PCs. CW1 recalled 7 thinking how Bradley could possibly make such an assertion when, internally, the 8 Company did not know if or when it would be able to put webOS on PCs. 9 110. CW12 had a similar reaction to Apotheker's March 2011 statements 10 regarding the timeframe for "migrating" printers and PCs into the webOS 11 ecosystem. CWI2 explained that given the organization and the precedence given 12 to the mobile devices and the TouchPad, Apotheker's statements were false. 13 CW12 stated that a small organization like Palm (referring to the webOS group 14 that joined HP in the Palm acquisition) could not have supported the TouchPad and 15 mobile devices, and then been expected to do a "completely different product, 16 printers and PC in a year's worth of time." CW12 repeated that his organization 17 lacked resources including "manpower," and that no one from the webOS division 18 was involved with coming up with the timeline presented by Apotheker in the 19 March 2011 presentation. CW12 described Apotheker's statements as "off 20 message" even though he felt that "we (in webOS) were pretty clear about our 21 roadmap." 22 111. CW12 stated that the webOS group was "appalled" and could not 23 understand "what the hell [Apotheker] was talking about" regarding timeline for 24 webOS PCs and printers. According to CW12, Rubinstein was "equally appalled." 25 112. At the time Apotheker misled the market in March 2011 regarding 26 webOS PCs and printers, CW9 confinned that he "saw no such thing [i.e., any 27 development of such products] happening in our building." CW9 stated that 28

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1 Apotheker' s statements were inaccurate because CW9 never saw any concrete 2 plans to create webOS PCs and printers. 3 E. Defendants Knowingly Release the TouchPad With Serious Software Problems 4 113. The TouchPad, released on July 1, 2011, was HP's flagship webOS 5 product and the cornerstone for the announced "ecosystem" of seamlessly 6 connected webOS devices. During the preceding months, Apotheker trumpeted 7 UP's enthusiasm for the TouchPad and the Company's strategy to produce a broad 8 platform of webOS devices - including PCs and printers - with the ability to 9 connect to each other. To that end, Apotheker assured investors that "webOS is 10 ready for prime time" and that UP, with him as CEO, would not release a product 11 "that isn't perfect." At that time, and months prior to the TouchPad's release, 12 however, Defendants knew or should have known that the TouchPad was far from 13 "Perfect" and indeed had serious flaws, and that the webOS operating system on 14 the flagship TouchPad - let alone other devices in the ecosystem - was not 15 remotely "ready for prime time." 16 114. According to CW1, who was responsible for developing webOS 3.0 17 for the TouchPad, development of the tablet was problematic from the time it was 18 unveiled to the public on February 9, 2011. Leading up to the February 9 Event, 19 CW1 was meeting with Bradley twice a day in preparation to showcase the 20 TouchPad, the Pre3 and the Veer. During this time, CW1 's team was working 21 feverishly, "breaking their necks," to produce a "demo" device for the event that 22 would work for 20 minutes without crashing. 23 115. The iPad 2, Apple's eagerly anticipated follow-up to its wildly 24 successful, market-defining Wad tablet, was unveiled to the public on March 2, 25 2011 and released for sale in the United States on March 11. It was an immediate 26 success. Having shown the TouchPad to the market, the Palm GBU scrambled to 27 release it for sale to try to compete with the iPad 2. 28

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1 116. CW2 worked at HP from 2000 until December 2011, and has more 2 than fifteen years of experience in the PC industry. From 2000 until late June 3 2011, CW2 was a Vice President of Marketing and Strategy in the Solution 4 Partners Organization area of PSG, reporting to Stephen DeWitt, Senior Vice 5 President and General Manager of the webOS GBU. In May 2011, DeWitt asked 6 CW2 to transition to the Palm GBU in order to help develop webOS and adapt the 7 TouchPad for the commercial market. CW2 joined the Palm GBU on June 21 or 8 22, 2011 as Senior Vice President of Enterprise Business Development, reporting 9 to Richard Kerris, Vice President of Worldwide Developer Relations. CW2 10 subsequently reported to DeWitt after he replaced Rubinstein as head of the Palm 11 GBU on or about July 11, 2011.15 CW2 on occasion referred to Rubinstein as 12 "Ruby." 13 117. As Senior VP of Enterprise Business Development, CW2 was 14 responsible for all commercial account application development for webOS; that 15 is, selling the TouchPad and other mobile devices on the webOS platform to large 16 corporate clients. CW2's team was responsible for ensuring that those commercial 17 applications were "ported over" to a webOS platform and were acceptable to the 18 commercial clients. 19 118. CW2 confirmed that the TouchPad was flawed from the time it was 20 unveiled, and that persons attending the February 9 Event could only look at the 21 TouchPads. They were not permitted to handle or use them because of the many 22 "bugs" in the webOS software. In the months following the February 9 Event, the 23 Palm GBU software engineers continued to struggle with the development of the 24 webOS software, missing internal milestones for the platform and experiencing 25 frequent delays. As of February 9, according to CW2, HP had announced a 26 27 On or about July 11, 2011, according to an HP press release issued that day, 28 the Palm GBU was renamed the webOS GBU.

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1 "summer" launch of the TouchPad, Pre3 and Veer and had set an internal deadline 2 in May. Missed milestones and delays, however, pushed the release date to June, 3 and finally to July 1. 4 119. According to CW2, HP rushed to meet the July 1 release date in order 5 to attempt to compete with the Wad 2. According to CW2, the software engineers 6 were trying to develop the webOS software for the TouchPad and the two 7 smartphones at the same time, and they lacked sufficient resources to properly 16 8 develop both. Similarly, according to CW1, the TouchPad ultimately was 9 unsuccessful upon release because the software was not ready. The software was 10 not ready, according to CW1, because Rubinstein pushed development of the 11 software for the Veer and Pre3, diverting resources from the TouchPad. Accordin 12 to CW1 5 if his team had had another three months to work on the webOS software 13 for the TouchPad, they would have released a more robust tablet. 14 120. CW3 was the Senior Vice President of webOS in the Palm GBU from 15 July 2010 until November 2011. CW3 was the Palm GBU employee responsible 16 for running the engineering department, and reported to Rubinstein. CW3 attended 17 a meeting on a Sunday afternoon in February or March 2011 to review the webOS 18 product lines. According to CW3, Apotheker, Bradley and Rubinstein all were 19 present. At this meeting, Apotheker imposed many deadlines leading to release of 20 the TouchPad that CW3 viewed as plainly unattainable. According to CW3, 21 Bradley and Rubinstein agreed to these deadlines in order to appease Apotheker. 22 Referring to webOS, Apotheker stated during the meeting: "If this thing is not 23 working out by the end of the year, I'm gonna shut it down." 24 121. Apotheker used the pre-release TouchPad and experienced software 25 "bugs" firsthand. CW4 was a Director and then Senior Director of webOS in the 26 16 27 As described above, because they were stretched to capacity and were constrained by a hiring freeze, the webOS division had no resources available to 28 develop software code for PCs and printers.

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1 Palm GBU from July 2010 until November 2011. Until July 2011, CW4 reported

2 to CW 1, who was Vice President of Software Engineering in the Palm GBU, and

3 thereafter reported to Jaaksi, Senior Vice President of webOS, who reported to

4 I Rubinstein. CW4 was in charge of core applications including music, messaging,

5 and gallery photos, and supervised approximately 20 people. According to CW4,

6 Apotheker focused his attention on the webOS division soon after he became CEO,

7 and held regular Sunday meetings to discuss the webOS product line. CW4

8 recalled an occasion, prior to the TouchPad' s release, when Rubinstein came to

9 him with a problem with the TouchPad's calendar function that Apotheker had

10 specifically raised with Rubinstein. CW4 recalled thinking it was good that the

11 CEO himself was using the TouchPad. 12 122. CW4's team met with Rubinstein regularly, and sometimes daily,

13 concerning the TouchPad and the timing of its release. CW4 recalled one meeting

14 in particular during which Rubinstein went around the room to all of the webOS

15 directors, asking each person's opinion on the release of the TouchPad. According

16 to CW4, the consensus was that they had made progress on developing the

17 TouchPad, but a July 1 launch was definitely premature. 18 123. CW7 also recalled attending "all hands-on meetings" prior to the

19 TouchPad launch that Rubinstein also attended, which were held at Bp's

20 Sunnyvale offices ("Palm Campus") in the cafeteria at least every 15-20 days

21 leading up to the launch. It was CW7's understanding that Rubinstein conveyed

22 the discussions at these meetings to Bradley and Apotheker. According to CW7,

23 the team discussed all the TouchPad glitches with Rubinstein at these meetings.

24 CW7 recalled one discussion of an issue with YouTube videos "hanging" being

25 discussed, but it was clear that the pressure to launch the TouchiPad superseded any

26 product glitches. 27 124. CW 15, who characterized his personal contact with Rubinstein as

28 frequent, confirmed Rubinstein's heavy involvement, stating that he had frequent

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1 discussions about product development and was very hands-on with the products

2 during the development phase. Rubinstein would frequently "demo" the products

3 himself. According to CW15, Rubinstein and Bradley met frequently. CWI5

4 recalled numerous occasions where Rubinstein would tell CW1 5 and others that he

5 "demo-ed a product to Todd" and had obtained Bradley's feedback. 6 125. CW15 also confirmed the Sunday meetings referenced by CW3, and

7 stated that the meetings were attended by management in the webOS division, as

8 well as Bradley and Apotheker. CW1 5 knew this because Rubinstein would

9 reference the discussions and product demos that occurred at the Sunday meetings. 10 126. CWI5 further confirmed the internal consensus was that the

11 TouchPad was being released prematurely given all the software issues. CW1 5

12 described the TouchPad as a "buggy product" with a "non optimal" user

13 experience, and added that the applications were "sluggish." According to CWI5,

14 Rubinstein was acutely aware of the problems and believed that, given the

15 importance of the TouchPad launch, Rubinstein would have been communicating

16 the issues to Bradley. CW1 5 recalled that prior to the launch, Rubinstein

17 "presented" to Bradley "the state of the TouchP ad. " CWI5 stated that he and his

18 colleagues had "conveyed" to Rubinstein the "state of the product," including

19 many of the issues they identified as bugs prior to the launch. According to CW15,

20 the TouchPad had problems that needed to be rectified prior to the launch but were

21 not. CW1 5 stated that the "biggest problem" with the TouchPad was

22 "performance," which internally was marked as incomplete prior to the launch, but

23 other problems included "memory usage," stability issues (i.e., the software would,

24 keep crashing), and Skype integration. 25 127. During the months leading to the release of the ToucliPad, it was

26 obvious to CW3—who ran the engineering department of the PSG unit—that the

27 TouchPad, given its hardware and software issues and lack of mobile applications

28 ("apps"), was bound to fail. Prior to the TouchPad's release, CW3 observed a

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1 consensus within CW3 's team that the product could not compete with the iPad 2 because it lacked the thousands of apps that Apple offered at the same price point. 3 128. According to CW2, prior to delivery of the TouchPad, there were 4 many missed milestones and many significant technical and software bugs. One 5 significant bug, according to CW2, was that the TouchPad would not properly 6 "boot up" in locations with free "Wi-Fi" networks, such as Starbucks Coffee. 7 According to CW2, end-users who tried to boot up the tablet at a Starbucks were 8 instead directed to another webpage that directed the user to sign-up for Wi-Fi. 9 CW2 recalled having meetings with the head software engineer about this Wi-Fi 10 bug prior to the TouchPad's release; the head software engineer was aware of this 11 bug and told CW2 that the bug was number 4 or 5 on a list of "known listed bugs." 12 According to CW2, Rubinstein told the head software engineer the team would 13 focus on clearing up the top three bugs on the list before shipping the TouchPad, 14 and deal with all the other bugs later. Concerning Apotheker's and Bradley's 15 knowledge of the Wi-Fi bug, CW2 said that he could not imagine a bug "of that 16 magnitude" not being known at the top. According to CW2, many customers 17 returned TouchPads as defective because of the Wi-Fi bug. Ultimately, according 18 to CW2, the TouchPad had a very high rate of returns—more than 20 percent— 19 owing to the Wi-Fi bug and many others. 20 129. CW5 confirmed that following the launch of the TouchPad, there 21 were numerous bugs in the software, and further stated that the TouchPad had bee 22 launched prematurely. CW5 described "memory leaks," performance related 23 issues, missing features, and problems with web browser usability. CW5, who 24 joined HP after the launch, was specifically tasked with fixing the bugs on the 25 TouchPad 1.0. CW5 met regularly with Rubinstein, and observed that Rubinstein 26 would meet with Bradley after he met with CW5 and his colleagues. 27 28

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1 130. CW16 also confirmed the TouchPad that was initially launched had a 2 lot of bugs. CW16 recalled meetings about the bugs, specifically issues relating to 3 powering the tablet on and off; and various software problems. 4 131. In May 2011, according to CW2, after senior management realized 5 that that the Palm GBU would have difficulty meeting milestones that had been set 6 for the TouchPad webOS consumer platform, senior management decided to begin 7 developing the commercial application of the TouchPad as a way of offsetting the 8 expected revenue losses on the TouchPad's consumer sales. CW2 explained that 9 HP's PSG had a good pipeline of commercial accounts—large corporate clients 10 like Kaiser Permanente, Chevron, State Farm, and Shell—that expressed 11 substantial interest in buying TouchPads in bulk for their employees' use. 12 According to CW2, however, because the TouchPad would have to be re-adapted 13 for the commercial setting (by installing stronger security features and adding 14 various commercial applications, for example), it would not have been ready to be 15 sold to commercial customers until approximately November 2011. 16 132. An internal e-mail from Rubinstein to Palm GBU employees, dated 17 July 1, 2011, shows that the serious problems with the TouehPad were widely 18 known internally and that the tablet was far from market-ready upon its release: 19 Team, 20 Today we bring the HP TouchPad and webOS 3.0 to the world. 21 The UP team has achieved something extraordinary— 22 especially when you consider that it's been just one year since 23 our work on the TouchPad began in earnest. Today also marks 24 the start of a new era for HP as our vision for connected 25 mobility begins to take fonn—an ecosystem of services, 26 applications and devices connected seamlessly by webOS. 27 28

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1 If you've seen the recent TouehPad reviews you know that the 2 industry understands HP's vision and sees the same potential 3 in webOS as we do. David Pogue from the New York Times 4 says "there are signs of greatness here." (I've included links to 5 David's review and others below.) You've also seen that 6 reviewers rightly note things we need to improve about the 7 webOS experience. The good news is that most of the issues 8 they cite are already known to us and will be addressed in 9 short order by over-the-air software and app catalog updates. 10 We still have work to do to make webOS the platform we 11 know it can be, but remember. . * it's a marathon, not a sprint. 12 In that spirit, Richard Kerris, head of worldwide developer 13 relations for webOS, reminded me yesterday of the first 14 reviews for a product introduced a little over ten years ago: 15 16 "...overall the software is sluggish" 17 there are no quality apps to use, so it won't last" 18 ". . . it's just not making sense. . . 19 It's hard to believe these statements described MacOS X—a 20 platform that would go on to change the landscape of Silicon 21 Valley in ways that no one could have imagined. 22 23 The similarities to our situation are obvious, but there's also a 24 big difference. Like David Pogue, our audiences get that 25 webOS has the potential for greatness. And like me, they 26 know that your hard work and passion, and the power of hiP's 27 commitment to webOS, will turn that potential into the real 28 thing.

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1 133. Rubinstein' s candid internal statements, and the significant over-the- 2 air software update that was planned even before the TouchPad release, stand in 3 stark contrast with Apotheker's assurances only a month earlier that webOS was 4 "ready for prime time" and that no product that was not "perfect" would be sold. 5 134. According to CW2, the TouchPad—and ultimately the entire webOS 6 initiative—failed because webOS was a good example of an "Os simply not being 7 ready for prime time." CW2 defined "prime time" in this context as meaning that 8 a customer can walk into Best Buy and be able to purchase the product with certain 9 expectations of what it can do, and the product will work and meet the customer's 10 expectations. By this or any other standard, webOS was not "ready for prime 11 time" as Apotheker had promised, and the TouchPad was not "perfect" as he had 12 assured. 13 135. In contrast to what Rubinstein was saying internally, Bradley and 14 other HP executives continued to assure investors that HP's webOS ecosystem 15 strategy was sound. As reported by All Things Digital just a few days later, on 16 July 6,2011: 17 Hewlett-Packard has a lot riding on the launch of the 18 TouchPad. 19 20 The tablet, which went on sale last week, doesn't just represent 21 UP's effort to take on the Wad. It's also the start of what the 22 company hopes will be a renaissance for web OS, the operating 23 system HP acquired with its acquisition of Palm a year ago.

24 * * * 25 26 In recent interviews HP executives have talked about the 27 importance of web OS to the core of the company's business. 28 HP is counting on webOS to power a range of devices, from

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1 future tablets to the Pre3 and other smartphones. HP is also 2 looking to boost the operating system's presence by making it 3 available on printers as well as from within its Windows PCs. 4 "We've got lots of capabilities that we have to bring to scale," 5 HP Executive Vice President Todd Bradley told AllThingsD. 6 "We've just got to do it." 7 8 Bradley wouldn't commit to a schedule for when future 9 devices would hit the market after the already announced Pre3, 10 but he said the company is committed to a broad web OS 11 lineup. 12 136. On July 11, 2011, in a press release titled "HP to Drive Innovation, 13 Scale and Growth of webOS," HP announced that it was reorganizing the PSG 14 division in order to "accelerat[e] the global expansion of webOS." "To support 15 this next phase of growth," HP stated that it was appointing Stephen DeWitt, 16 another PSG executive, to Rubinstein's former position as head of the Palm GBU, 17 now renamed the webOS GBU, while Rubinstein, "the visionary behind webOS," 18 would assume a product innovation role within PSG, still reporting to Bradley and 19 working on webOS. 20 137. On July 20, 2011, Bradley was interviewed by Bloomberg News, in a 21 segment titled "Bradley Says HP to Invest Aggressively in TouchPad." Bradley 22 again professed BP's continued commitment to the recently launched TouchiPad 23 and to webOS as the cornerstone in BP's strategy "to build [a] ubiquitous set of 24 products" across its PC, printing, cloud, and other businesses. Bloomberg noted 25 that there were indications that "the TouchPad wasn't selling well" and asked 26 Bradley whether HP had a "plan B" if that were true. Bradley denied the rumors o 27 poor sales, reassuring investors about HP's continued commitment to the 28

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1 TouchPad: "I would tell you that we're very happy with the ramp, we'll continue 2 to invest very aggressively." 3 138. Finally, on August 1, 2011, as referenced in Rubinstein's July 1 e- 4 mail, HP released a free over-the-air software update for the TouchPad, designated webOS 3.0.2. The comprehensive update included "hundreds of improvements" to 6 enhance "performance and reliability" and add "improved functionality to several 7 core webOS apps." 17 8 V. DEFENDANTS' MATERIALLY FALSE AND MISLEADING CLASS PERIOD STATEMENTS AND ANALYST 9 AND MARKET REACTIONS THERETO 10 A. February 9, 2011 webOS Announcement 11 139. The Class Period begins on February 9, 2011. In a February 9, 2011 12 press release titled "HP TouchPad Brings webOS to the Big Screen," HP 13 announced that later in the year it would release the first webOS-powered tablet, 14 the TouchPad, as well as two additional webO S-based smartphones, the Veer and 15 the Pre3 (the "February 9 Press Release"). 16 140. The February 9 Press Release was part of a larger webOS 17 announcement held on the same day at a major HP media, industry and investor 18 event in San Francisco called "Think big. Think small. Think beyond: webOS 19 Announcement," co-hosted by Defendant Bradley, where HP showcased the 20 TouchPad, Veer and Pre3 to the market. During the February 9 Event, Bradley 21 touted these webOS devices as "the building blocks" of BP's "long term strategy" 22 and "commitment" to expand the webOS platform beyond tablets and srnartphones 23 to a broad range of connected devices, "including printers, some form factors you 24 haven't seen before," and most significantly, PCs, "later this year": 25 26 17 27 "Now Your TouchPad Is Even More Like Nothing Else," The Official HP Palm Blog Aug. 1, 2011, available at http://blog.palrn.com/palm/201 1/08/now- 28 your-ToucbPad-is-even-more-like-nothing-else.htrnl (last accessed Feb. 9, 2012).

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1 At HP, we're about creating amazing experiences for 2 customers who want to be better connected to their world, and 3 right now, we're applying the full force, the full capability of 4 our innovation and our scale to a set ofproducts that are the 5 building blocks in a long term strategy, a strategy that's going 6 to further establish us as the leader in creating and enabling 7 these connected experiences. We're going to show you ways 8 today that our technology, our innovation, our capabilities, will 9 deliver new experiences for millions of people around the 10 world, and the great thing is, today, you're going to see it first.

11 * * * 12 13 So as you've seen, we're extending the WebOS family. We're 14 adding two new smartphones, the first ever WebOS TouchPad, 15 all phenomenal products featuring the significant mobile 16 innovation of WebOS. But we're thinking beyond today. We 17 have a commitment to extend the WebOS footprint even 18 further as the year progresses, taking WebOS to other 19 connected devices, including printers, some form factors you 20 haven't seen before, and as we think about how we enter 21 markets, how HP enters markets, we do so with meaningful 22 intent, with significant resources, and our goal, our 23 commitment, is to extend the WebOS experience across the 24 broadest range of devices for our customers and creating the 25 largest install base possible for our developers. So with this in 26 mind, I'm excited to announce our plans to bring WebOS to 27 the HP device that has the biggest reach of all: the personal 28 computer. So across HP, we have phenomenal people working

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1 hard to enhance our customers' already familiar experience 2 with the PC to add a rich set of applications and services that 3 only WebOS offers, and as we introduce that WebOS to our 4 millions of PC customers later this year, we'll clearly expand 5 the reach for our developers as well, and we'll expand it 6 exponentially. Do the math on two PCs a second. Do the 7 math on two printers per second, and you easily exceed 100 8 million devices with WebOS deployed annually. I think it's 9 fair to say that that's the start of something that's pretty big. 10 So we'll have a lot more details to share with you throughout 11 the year, a lot more work as we progress to deliver these 12 products, and some phenomenal experiences that we'll create. 13 So what you've seen today is how HP is taking a new approach 14 to the entire ecosystem of connectivity, extending mobility to 15 connectivity, an approach that really puts you at the center of it 16 all, and this is the idea, the central idea, behind a marketing 17 campaign that's really the extension of, "The computer is 18 personal again."

19 * * * 20 21 That said, I want to close and emphasize three things. First 22 and foremost, WebOS and the delightful, easy to use 23 experience that we'll deliver to customers using this truly 24 differentiated platform. WebOS is an example of innovation 25 that matters to customers, letting you seamlessly connect your 26 worlds in a way that's unlike anything you've seen before. 27 What you saw today is just the beginning. Second is the 28 commitment HP is making to develop the full potential of

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1 WebOS in the marketplace. We're investing in a complete 2 buildout. We're committed to helping build this ecosystem, 3 from small to big, from local to global, and finally, the work 4 we're doing with the rapidly growing community of WebOS 5 developers and content providers whose work will really bring 6 WebOS to life. 7 141. Bradley's statements that HP was "thinking beyond today" and 8 "comrnit[ted] to extend[ing] the webOS footprint event further as the year 9 ses, taking webOS to other connected devices, including printers," as well 10 as announcing HP's "plans to bring webOS to the HP device that has the biggest 11 reach of all: the personal computer," which he stated would be "later this year," so 12 that the total of such webOS devices "would easily exceed 100 million," with a 13 "new approach to the entire ecosystem of connectivity, expanding mobility to 14 connectivity," were materially false and misleading because at that time, as 15 Bradley knew but failed to disclose, or recklessly disregarded, and as alleged in 16 greater detail in Part IV.D above, that (1) webOS PCs and printers never 17 progressed beyond the "concepting" phase, such that there was never any POR for 18 web OS PCs and printers and therefore no budget or resources allocated to 19 developing them, making it impossible for such products to be introduced "later 20 this year" or "as the year progresses"; (2) the webOS division was unable to devote 21 any resources to developing webOS code for such devices because they were 22 exclusively focused on the TouchPad during the Class Period, and no other 23 division had the expertise to "cut" webOS code for different devices; and (3) 24 because of HP's hiring freeze, the Company was unable to hire additional 25 resources to develop appropriate webOS code for PCs and printers. 26 142. Bradley's statements that HP would "introduce that WebOS to our 27 millions of PC customers later this year," and that "across HP, we have 28

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I phenomenal people working hard to enhance our customers' already familiar

2 experience with the PC to add a rich set of applications and services that only

3 WebOS offers," were materially false and misleading for the same reasons, and

4 because it misled the market into believing that development for webOS PCs was

5 well under way when, in fact, no POR existed and no resources were allocated. 6 143. Bradley's statements touting the TouchPad and webOS smartphones

7 unveiled at the February 9 Event as the "building blocks" of Hp's expansion

8 strategy for webOS, "a strategy that's going to further establish us as the leader in

9 creating and enabling these connected experiences" were materially false and

10 misleading for the same reasons, and because at that time, as Bradley knew but

11 failed to disclose, or recklessly disregarded, and as alleged in greater detail in Part

12 IVY above, development of the TouchPad was seriously hampered by missed

13 milestones, delays and software problems. 14 144. Analysts responded favorably. A February 9, 2011 Wells Fargo

15 report stated that it was "impressed on multiple fronts )" stating that "this [webOS]

16 software release looks very good and topped our expectations." The report also

17 stated that: 18 the decision to take the web OS to the PC gives HP a good shot 19 at building a developer ecosystem since apps can run across 20 phones) tablets, and PCs. 21 22 145. The Wells Fargo report concluded: 23 In our opinion, a very compelling operating system release. 24 While it will be difficult to surpass Apple and Google at this 25 stage in the game, we believe that HP has done a great job 26 positioning itself as a contender for third place, with better 27 products than RIM, Nokia and Microsoft, in our view. 28

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1 146. A February 9, 2011 Deutsche Bank analyst report also was positive: 2 We thought the webOS user interface was impressive on the 3 TouchPad and the most formidable iPad challenger thus far... 4 HP plans to extend the webOS onto PGs in C2H11 in order 5 to quickly ramp the installed base and HP believes it can ship 6 1 OOM webOS units annually PCs, printers, tablets and 7 phones). We believe this could scale the platform faster and 8 pique developer interest. 9 10 147. A February 10, 2011 J.P. Morgan analyst report stated similarly: 11 We believe that shares of Overweight-rated Hewlett-Packard 12 stand to enjoy a positive 'shot-in-the-arm,' following 13 yesterday's intro of its tablet, TouchPad. We had highlighted 14 this tablet announcement as a potential near-term catalyst. In 15 our view, the hardware and software specs of the TouchPad 16 appear to be better than what investors expected. 17 148. The J.P. Morgan report also emphasized that HP could expand the reach of webOS to PCs and threaten the longstanding dominance of the Windows II operating system: 21 webOS could represent a new line in the sandfor PCs, not just 22 tablets. TIP foreshadowed the increasing reach of webOS, 23 indicating that the operating system would reach the 24 company's notebook PCs later this year. We think that this 25 plan could gradually chip away at the long-held dominance by 26 Windows. While still early, our view would be that HP first 27 offers webOS as an enhanced user interface running on top of 28

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1 Windows. This prospect alone opens the door for HP to 2 eventually substitute webOS for Windows longer-term, in our 3 view. 4 149. Investors also reacted positively. On February 10, 2011, HP's stock 5 6 price reached its Class Period intraday high of $4939, before dropping slightly to close at $48.54. The stock remained buoyed thereafter and on February 16, 2011, 7 8 just four trading days later, HP's stock price reached its Class Period closing high of $48.99. 9 B. 1011 Earnings Conference Call 10 15 0. On February 22, 2011, HP held a conference call for investors and 11 12 analysts to discuss the Company's first quarter 2011 financial results announced 13 earlier that day (the "1Q11 Conference Call"). During the 1Q1 1 Conference Call, 14 Apotheker emphasized the expansion of the webOS ecosystem to printers and PCs 15 Most importantly, I am very pleased with our February 9 16 announcement. We are all excited about our webOS platform, 17 the devices that we announced and incremental opportunity 18 that webOS provides. The enthusiasm and anticipation for 19 webOS exceeded even our most optimistic expectations. We 20 look forward to providing a differentiated seamless experience 21 across our tablets, srnartphones, printers, PCs and future form 22 factors. 23 151. Apotheker also stated that "Ql demonstrated the power of HP's r 24 portfolio [iii] our existing core businesses as well as new product launches and 25 26 innovations," including "our successful webOS launch." 152. The statements made by Apotheker during the 11 I Conference Call 27 were materially false and misleading when made. Apotheker's statement that 28

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1 "[m]ost importantly, I am very pleased with our February 9 announcement" was 2 false .and misleading because at that time, as Apotheker knew but failed to disclose 3 or recklessly disregarded, materially false statements were made during the 4 February 9 Event (as alleged in Part V.A above), and his endorsement further 5 misled investors to believe the February 9 statements were true. Apotheker's "ver 6 pleased" statement was additionally false and misleading because at that time, as 7 Apotheker knew but failed to disclose, or recklessly disregarded, and as alleged in 8 greater detail in Part IV.E above, development of the TouchPad was seriously 9 hampered by missed milestones, delays and software problems. 10 153. Apotheker's statement that HP was working on "providing a 11 differentiated seamless experience across our tablets, smart phones, printers, PCs 12 and future form factors" using webOS was false and misleading because it misled 13 the market into believing that development for webOS PCs and printers was well 14 under way when, as Apotheker knew but failed to disclose, or recklessly 15 disregarded at the time he made the statement: (I) webOS PCs and printers never 16 progressed beyond the "concepting" phase, such that there was never any POR for 17 webOS PCs and printers and therefore no budget or resources allocated to 18 developing them, making it impossible for such products to be introduced "later 19 this year" or "as the year progresses"; (2) the webOS division was unable to devote 20 any resources to developing webOS code for such devices because they were 21 exclusively focused on the TouchPad during the Class Period, and no other 22 division had the expertise to "cut" webOS code for different devices; and (3) 23 because of BP's hiring freeze, the Company was unable to hire additional 24 resources to develop appropriate webOS code for PCs and printers. 25 C. March 14. 2011 HP Summit 26 154. On March 14, 2011, HP hosted a significant event in San Francisco 27 with analysts and media representatives to share BP's corporate strategies and 28 direction going forward (the "HP Summit"). The Wall Street Journal previewed

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1 the HP Summit as a "much-anticipated analyst summit where Apotheker is 2 expected to give for investors a clearer sense of where he plans to take the high- 3 tech giant" and "could be the day the beleaguered chief executive reboots his debut 08 4 at the helm of one of the world's most important technology companies. 5 155. With respect to webOS, Apotheker again referenced the multi-device 6 platform for webOS and stated HP would "roll out webOS on a massive scale" by 7 extending webOS to a broad range of HP devices, including PCs and printers, 8 totaling more than 100 million webOS-enabled devices: 9 Our next strategic theme is connected experiences. I've 10 spoken a lot about connectivity today already, but I do want to 11 emphasize that we intend to lead. Our first advantage is our 12 scale and global reach because in this game, size does matter. 13 And we have the potential to deliver more than 100 million 14 web OS enabled devices a year, including our PCs, our 15 TouchPads, our smart phones, and our printers. You touch 16 the cloud through the device you touch. And we have an 17 innovative ensemble of connected devices as well as an 18 operating system, WebOS, that can provide one user interface 19 across afully-connected life from the home, to the road, to the 20 Office. 21 22 * * * 23 So one of the things that we're focusing on right now as we're 24 getting ready to roll out web OS on a massive scale is also to 25 make sure that they have the relevant enterprise applications 26 27 Benjamin Pimentel, "After 'Rocky' Start, H-P Chief Aims For Reboot," 28 Wall St. .1, Mar. 14, 2011.

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1 available. So it's not just about the consumer, it's also about 2 the enterprise and trying to find the two that really work 3 together and really have a differentiated position out there. 4 And I'm sure that the team, our top leadership, is going to 5 make that happen. 6 156. The statements made by Apotheker during the FlIP Summit were 7 materially false and misleading when made. Specifically, Apotheker's statements 8 touting UP's plans to extend webOS to multiple devices including PCs and 9 printers, that HP has "the potential to deliver more than 100 million web OS 10 enabled devices a year, including our PCs, our TouchPads, our smart phones, and 11 our printers," that HP "ha[s] an innovative ensemble of connected devices. * . that 12 can provide one user interface across a fully-connected life" running on webOS, 13 and that "right now [HP is] getting ready to roll out web OS on a massive scale" 14 were materially false and misleading because they misled the market into believing 15 that development for webOS PCs and printers was well under way when, as 16 Apotheker knew but failed to disclose, or recklessly disregarded at the time he 17 made the statement, and as alleged in detail in Part IV.D and IV.E above, (1) 18 webOS PCs and printers never progressed beyond the "concepting" phase, such 19 that there was never any POR for webOS PCs and printers and therefore no budget 20 or resources allocated to developing them; (2) the webOS division was unable to 21 devote any resources to developing webOS code for such devices because they 22 were exclusively focused on the TouchPad during the Class Period, and no other 23 division had the expertise to "cut" webOS code for different devices; (3) because 24 of HP's hiring freeze, the Company was unable to hire additional resources to 25 develop appropriate webOS code for PCs and printers; and (4) given the webOS 26 issues on the TouchPad, webOS was in no way ready to be "roll[ed] out on a 27 massive scale" to other devices. 28

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1 157. Apotheker's statements touting the TouchPad as one of the "100 2 million web OS enabled devices" HP would deliver annually was false and 3 misleading because at that time, as Apotheker knew but failed to disclose, or 4 recklessly disregarded, and as alleged in greater detail in Part TV.E above, 5 development of the TouchPad was seriously hampered by missed milestones, 6 delays and software problems. 7 158. Bradley also emphasized the webOS ecosystem and "differentiated 8 platform" of devices during the HP Summit, referencing the mini-ecosystem of 9 devices introduced at the February 9 Event as a starting point: 10 Beyond our scale and our reach that's well known, we have 11 unique and differentiated technology in the form of web Os, 12 and web OS is becoming the basis, the foundation of our 13 connected ecosystem. It's a foundation for third party 14 developers, enterprise IT departments, all to develop that 15 portfolio of products that allow access to this ecosystem that 16 we've talked about. Web OS was really built, its genesis was 17 to be mobile, to be web connected and to be scalable, and to 18 address the migration of information and content that's now 19 moving to the cloud. 20 21 * * * 22 The family of products that we announced last month, the 23 Veer, the pre-3 [sic] Smartphone, the HP TouchiPad, each offer 24 the same great web OS experience ubiquitously across the 25 device. 26 27 * * * 28

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1 Our goal with web OS and our unique opportunity is really to 2 extend web OS to the broadest range ofproducts available, the 3 broadest range of devices for our customers, the largest 4 installed base for our developers. With this in mind, we'll be 5 extending the ecosystem beyond smart phones and tablets. 6 Development teams across HP are working to bring web OS 7 and the web OS experience to the Windows PCs. Next year. 8 we'll migrate tens of millions of web connected printers into 9 the ecosystem. 10 Again, expanding the reach for developers exponentially. In 11 the figure, across smart phones, TouchPads, PCs, printers, we 12 have the potential to deliver tens if not hundreds of millions of 13 web OS enabled devices annually into a huge installed base. 14 And as we look further out into the future, clearly, we envision 15 a broader web OS footprint. We look at it across endpoint 16 devices as diverse as thin clients, as digital signage, even 17 devices from third parties that complement our portfolio and 18 enhance our customers' experience. 19 20 So to summarize, I think it's fair to say that we believe we're 21 uniquely positioned to leverage our very distinct and 22 differentiated assets and to market advantages to solve real 23 customer needs, web OS and the easy to use experience UP 24 will deliver to customers using this truly differentiated 25 platform. It's a true example of us bringing innovation that 26 matters to customers to helping them seamlessly connect their 27 worlds through the cloud. HP is committed and continues to 28 be committed to develop the full potential of web OS in the

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1 marketplace, and this means all ofHP. We're investing in the 2 build out of this ecosystem, from small to big, from 3 professional to personal, from cloud enablers to connected 4 devices that are both local and global, and obviously, we've 5 embraced the developer community to ensure that in classic 6 HP fashion, we're keeping the developer tools in the garage, 7 unlocked so they can write apps for multiple devices at one 8 time and grow this catalogue and give end users and CIOs the 9 mostfrom a family of devices in the productive, secure, 10 entertaining and always engaging world. 11 159. The statements made by Bradley during the lIP Summit were 12 materially false and misleading when made. Specifically, Bradley's statements 13 that "we'll be extending the ecosystem beyond smart phones and tablets"; that 14 " [d] evelopment teams across HP are working to bring web OS and the web OS 15 experience to the Windows PCs"; that "Enlext year, we'll migrate tens of millions 16 of web-connected printers into the ecosystem"; and that "across smart phones, 17 TouchPads, PCs, printers, we have the potential to deliver tens if not hundreds of 18 millions of web OS enabled devices annually into a huge installed base" were false 19 and misleading because they misled the market into believing that development for 20 web OS PCs, printers and a "truly differentiated platform" of "a family of devices" 21 was well under way when, as Bradley knew but failed to disclose, or recklessly 22 disregarded at the time he made the statement, and as alleged in detail in Part TV.D 23 and TV.E above, (1) webOS PCs and printers never progressed beyond the 24 "concepting" phase, such that there was never any POR for webOS PCs and 25 printers and therefore no budget or resources allocated to developing them, making 26 it impossible for HP to "migrate tens of millions of web-connected printers into the 27 ecosystem" "[n]ext year"; (2) the webOS division was unable to devote any 28

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1 resources to developing webOS code for such devices because they were 2 exclusively focused on the TouchPad during the Class Period, and no other 3 division had the expertise to "cut" webOS code for different devices; (3) because 4 of 1-IP's hiring freeze, the Company was unable to hire additional resources to 5 develop appropriate webOS code for PCs and printers; and (4) the Company was 6 struggling with webOS on the flagship TouchPad, and had no resources to extend 7 webOS onto a "family of devices." 8 160. Bradley's statements that "HP is committed and continues to be 9 committed to develop the full potential of web OS in the marketplace, and this 10 means all of HP"; that "[w]e're investing in the build out of this ecosystem, from 11 small to big, from professional to personal, from cloud enablers to connected 12 devices that are both local and global" were false and misleading for the same 13 reasons. 14 161. Bradley's statements that HP is "uniquely positioned to leverage our 15 very distinct and differentiated assets and to market advantages to solve real 16 customer needs, web OS and the easy to use experience. . . ." were false and 17 misleading for the same reasons and because at that time, as Bradley knew but 18 failed to disclose, or recklessly disregarded, and as alleged in greater detail in Part 19 TV.E above, development of the TouchPad was seriously hampered by missed 20 milestones, delays and software problems. 21 162. Later during the HP Summit, HP held a press conference where 22 Apotheker again referenced the "seamless" mini-ecosystem introduced at the 23 February 9 Event, represented that a version of webOS would be on PCs at the end 24 of the year and touted the "massive" and "broad" platform of webOS devices: 25 So web OS is an unbelievably attractive and stunning 26 technology. The devices we have been able to put on display 27 on February 9 have in themselves a certain set of 28

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1 characteristics that make them unique. There is 2 interconnectivity, the fact that they are seamless, they connect 3 seamlessly to each other, and some of the other technology 4 features of web OS make it into an outstanding web operating 5 system. 6 So we will be shipping this, first of all, on the dedicated 7 devices, smartphones and the tablet. The Touch, our tablet, 8 will come out—the Touch pad will come out in June andfrom 9 that day onwards there will be wave after wave of technology 10 coming out to support the web OS platform. 11 12 There will be a beta version for web OS running on a browser 13 on PCs available at the end of the year and you will see us 14 putting web OS on the (inaudible) technology on PCs, on 15 Windows PCs I should add, starting from that point onwards. 16 And we hope to reach 100 million devices a year. 17 We will put the same technology on our printers. We will put 18 them on PCs. We will put them on [T]ouch[P]ads. We will 19 put them on smartphones so you will see this to become a very 20 massive, very broad platform 21 22 * * * 23 We just announced our new devices—the TouchPads and the 24 two smariphones. We haven't shipped them yet so right now 25 we don't compare really well with anyone because we haven't 26 done anything yet. But going forward we don't intend to play 27 in the junior league in this business either, 28

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163. The statements made by Apotheker during the HP Summit press 2 conference were materially false and misleading when made. Specifically, 3 Apotheker's multiple statements touting the expansion of webOS across a wide 4 range of its products, including PCs and printers, such that the day after the 5 TouchPad's release "there will be wave after wave of technology coming out to 6 support the webOS platform," including "a beta version for webOS running on a 7 browser on PCs available at the end of the year" and reaching "100 million devices 8 a year," and enabling webOS on "a very massive, very broad platform" of devices, 9 were materially false and misleading because they misled the market into believing 10 that development for webOS PCs, printers and a "very massive, very broad 11 platform" of devices was well under way when, as Apotheker knew but failed to 12 disclose, or recklessly disregarded at the time he made the statement, and as 13 alleged in detail in Part IV.D and IV.E above, (1) webOS PCs and printers never 14 progressed beyond the "concepting" phase, such that there was never any POR for 15 webOS PCs and printers and therefore no budget or resources allocated to 16 developing them; (2) the webOS division was unable to devote any resources to 17 developing webOS code for such devices because they were exclusively focused 18 on the TouchPad during the Class Period, and no other division had the expertise to 19 "cut" webOS code for different devices; (3) because of HP's hiring freeze, the 20 Company was unable to hire additional resources to develop appropriate webOS 21 code for PCs and printers, making it impossible to have a "a beta version for 22 webOS running on a browser on PCs available at the end of the year"; and (4) the 23 Company was struggling with webOS on the flagship TouchPad, and had no 24 resources to extend webOS to a "very massive, very broad" platform of devices. 25 164. Apotheker's statement that "webOS is an unbelievably attractive and 26 stunning technology," and that, concerning the pre-release TouchPad, "going 27 forward we don't intend to play in the junior league in this business," were also 28 false and misleading for the same reasons and because at that time, as Apotheker

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1 knew but failed to disclose, or recklessly disregarded, and as alleged in greater 2 detail in Part IVY above, development of the TouchPad was seriously hampered 3 by missed milestones, delays and software problems. 4 D. March 14, 2011 HP Summit Press Release 5 165. On March 14, 2011, HP issued a companion press release to the HP 6 Summit titled "HP Sets Strategy to Lead in the Connected World with Services, 7 Solutions and Technologies" (the "March 14 Press Release"). The March 14 Press 8 Release announced that Apotheker outlined the following "connectivity" strategy 9 for webOS at the HP Summit: 10 HP intends to build webOS into a leading connectivity 11 platform. As the world's No. 1 maker ofPCs and printers, HP 12 has the potential to deliver 100 million webOS-enabled devices 13 a year into the marketplace, and UP plans to use that scale 14 along with leading development tools to build a robust 15 developer community that is eager to access every segment of 16 the market and every corner of the globe. 17 18 166. The March 14 Press Release further emphasized the webOS 19 "ecosystem" as follows: 20 Connectivity: HP also intends to be a leader in the area of 21 connectivity. HP already has a globally distributed installed 22 base in both the consumer and enterprise, and ships two 23 printers and PCs a second, which will be web OS enabled—this 24 huge, growing installed base of devices provides enormous 25 opportunity upon which to build HP-, customer- and 26 • ecosystem-driven innovation. HP and its ecosystem of partners 27 will continue to provide context-aware experiences for 28

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1 consumers, SMBs and large enterprises with secure 2 information creation, digitization, transformation and 3 consumption—anytime, anywhere. 4 167. The statements contained in the March 14 Press Release, including 5 those attributed to Apotheker, were materially false and misleading when made. 6 Specifically, Apotheker's statements that "as the world's No. 1 maker of PCs and 7 8 printers, HP has the potential to deliver 100 million webOS-enabled devices a year into the marketplace"; and the statements regarding BP's webOS connectivity 9 10 strategy, that BP's printers and PCs "will be webOS enabled" in a "huge, growing installed base of devices" were materially false and misleading because they 11 misled the market into believing that development for webOS PCs, printers and a 12 "huge, growing installed base of devices" was well under way when, as TIP and 13 Apotheker knew but failed to disclose, or recklessly disregarded at the time they 14 made the statements, and as alleged in detail in Part TV.D and WE above, (1) 15 webOS PCs and printers never progressed beyond the "concepting" phase, such 16 17 that there was never any POR for webOS PCs and printers and therefore no budget 18 or resources allocated to developing them; (2) the webOS division was unable to 19 devote any resources to developing webOS code for such devices because they 20 were exclusively focused on the TouchPad during the Class Period, and no other 21 division had the expertise to "cut" webOS code for different devices; (3) because 22 of HP's hiring freeze, the Company was unable to hire additional resources to 23 develop appropriate webOS code for PCs and printers; and (4) the Company was 24 struggling with webOS on the flagship TouchPad, and had no resources to extend webOS onto other devices. 25 168. Analysts reacted favorably to Defendants' statements at the HP 26 27 Summit regarding HP's webOS expansion strategy. Morgan Stanley, for example, described BP's webOS strategy as follows in a March 15, 2011 report: 28

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I HP's new strategy centers on cloud, connectivity and software. 2 Key messages include: 3 * * * 4 5 2) Connectivity: HP views WebOS as the foundation of 6 innovation in PCs. HP plans to sell "millions" of tablets this 7 year.. . with other WebOS enabled devices, like PCs and 8 Printers, shipping in the future. 9 169. A March 15, 2011 Wells Fargo analyst report discussing the HP 10 Summit similarly emphasized the Company's message of webOS as "core" to 1W' 11 strategy: 12 13 HP continued to talk about their web OS platform as their core 14 unifying layer for connected devices, including Smartp hones, 15 PCs, tablets and printers. Given the focus here, we think it 16 would be highly unlikely that HP divests its PC business at this 17 time, despite much speculation to the contrary.

18 * * * 19 #5 - webOSls The Core 20 HP was pretty adamant that webOS is the foundation for the 21 HP connected ecosystem. They stated the goal to ship 100 22 million webOS enabled devices (PCs, tablets, smartphones, 23 and printers). The company has also been talking about 24 having nearly 30K webOS apps by the end of the year. This 25 number is still behind Apple's 350K and Android's 250K, but would be impressive nonetheless. Given the size of the It, existing PC and printer business it appears webOS will likely COND AMENDSO CLASS ACTION 69 o. SA CV 11 -0 1404 AG (RNBx)

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1 take on an increasingly bigger role and potentially take share in 2 the HP world from Windows. There have been consistent 3 rumors in the Asian press that HP might divest the PC business 4 but we find that scenario highly improbable since the PC 5 business also drives COGS advantage for the server business. 6 E. 2011 Earnin2s Conference Call 7 170. On May 17, 2011, before the opening of trading, HP held a 8 conference call for investors and analysts to discuss its second quarter 2011 9 financial results announced earlier that morning (the "2Q11 Conference Call"). 10 11 During the 2Q11 Conference Call, in response to a Morgan Stanley analyst's 12 questions about HP missing its guidance two quarters in a row and potentially 13 exiting some of its underperforming business segments, alluding to PCs, 14 Apotheker reassured investors that HP had a "balanced portfolio" and emphasized BP'S "great strategy.. . towards our connectivity approach" (referencing the 15 16 webOS product line), noting UP's excitement for the upcoming TouchPad launch and EP's belief in the "convergence of these different form factors over time— 17 TouchPads, PCs, etcetera, and in particular, notebooks": 18 19 [Analyst:] Good morning. Leo, you talked in your opening 20 remarks about companies that will fail because they protect 21 legacy businesses. And with two guidance resets in a row, is it 22 time, in your view, for HP to reconsider whether you really 23 need to participate in some of the businesses that are dragging 24 down performance? Or do you think you can invest fast 25 enough in new growth segments to offset declines that we are 26 seeing like in PCs right now? 27 28

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I [Apotheker] Good morning. At HP, we do a high (inaudible) 2 portfolio review to assess the performance of each one of our 3 businesses. We assess these businesses according to their 4 contribution to the business and their contribution to our 5 strategy and the value it can generate to our customers. 6 It's interesting that you point out PCs. If you look at the 7 performance of PCs, it has a two-phased approach and a two- 8 phased execution. On the one hand, on the commercial side, 9 we see a continuous demand for PCs, 12% growth. Again, we 10 are the market leader in this business. And we see some 11 weakness on the consumer side. 12 13 We believe that we have a great strategy to execute towards 14 our connectivity approach, and we are very excited about our 15 TouchPads coming out in particular in the summer. And as we 16 all believe that there will be a convergence of these different 17 form factors over time—TouchPads, PCs, et cetera, and in 18 particular, notebooks—we believe this is a great opportunity 19 for HP to participate in this. Of course we will continue to 20 assess the value of each element in the portfolio as we continue 21 to look at our business, but right now, I believe we have a 22 balanced portfolio. 23 171. The statements made by Apotheker during the 2Q11 Conference Call 24 were materially false and misleading when made. Specifically, Apotheker's 25 26 statements touting HP's "great strategy to execute towards our connectivity 27 approach"; the "convergence of these different form factors over time," including "ToucbPads" and "PCs"; and BP's "balanced portfolio" were false and misleading 28

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1 because they misled the market into believing that development for webOS PCs,

2 printers, and "different form factors" was well under way when, as Apotheker

3 knew but failed to disclose, or recklessly disregarded at the time he made the

4 statement, and as alleged in detail in Part TV.D and IV.E above, (1) webOS PCs

5 and printers never progressed beyond the "concepting" phase, such that there was

6 never any POR for webOS PCs and printers and therefore no budget or resources

7 allocated to developing them; (2) the webOS division was unable to devote any

8 resources to developing webOS code for such devices because they were

9 exclusively focused on the TouchPad during the Class Period, and no other

10 division had the expertise to "cut" webOS code for different devices; (3) because

11 of HP's hiring freeze, the Company was unable to hire additional resources to

12 develop appropriate webOS code for PCs and printers; and (4) the Company was

13 struggling with webOS on the flagship TouchPad, and had no resources to extend

14 webOS onto other devices. 15 172. Apotheker's statement that "we are very excited about our

16 TouchPads" was false and misleading when made because, as Apotheker knew but

17 failed to disclose, or recklessly disregarded, and as alleged in greater detail in Part

18 IV.E above, development of the TouchPad was seriously hampered by missed

19 milestones, delays and software problems, and the TouchPad, released on July 1,

20 2011, suffered from significant, known software defects. 21 173. Analysts understood the above statements by Apotheker during the

22 2Q11 Conference Call to mean that HP would extend webOS onto a broad array of

23 different devices, in particular PCs - HP's biggest product - in a webOS

24 ecosystem anchored by the flagship TouchPad. For example, a May 17, 2011

25 Credit Suisse analyst report stated that "[rnjanagernent are arguing for a recovery

26 in consumer PCs driven potentially by the introduction of the TouchPad and tablet

27 strategy." 28

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1 F. June 1, 2011 All Things Digital P39 Conference 2 174. On June 1, 2011, Apotheker attended the All Things Digital D9 3 conference in Los Angeles (the "D9 Conference"), where he was interviewed by a 4 Wall Street Journal technology reporter about HP's webOS and TouchPad. 5 Apotheker again emphasized that HP would put webOS on PCs, printers, and other 6 products: 7 [Reporter:] Let's talk about webOS for a minute.... I'm 8 curious, what are your plans for webOS? It's obviously on 9 phones. It's going to be on tablets. You're now in possession 10 of an Apple-like end-to-end situation where you can have the 11 software platform and not pay another company further north 12 (Microsoft). And you're building cloud systems. That's really 13 end to end. Is that what you're going for? 14 15 [Apotheker:] Yes we are. We also want to do the same thing 16 for the enterprise. Your description ofwebOS is accurate. We 17 bought an outstanding operating system. It's the only one that 18 is designed from the ground up to be totally Web-connected. 19 The one thing I regret is that HP didn't take Palm and webOS 20 to market sooner.

21 * * * 22 23 You're going to have webOS on the tablet and the phone. 24 We'll create a platform as a service so that developers can 25 have all the tools they need to create cool applications. We 26 want to create as holistic an ecosystem as we can. We 'ii put 27 web OS on PCs. It will go on every PC that we'll ship. 28

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I. [Reporter:] Will it replace Windows? 2 [Apotheker:] In the beginning, it will sit on top of Windows. 3 It will also be on every printer we ship above $100. With the 4 Web services we deliver, the printer becomes a very cool 5 connected device.

6 * * * 7 8 [Reporter:] I think if a person from Mars landed and looked at 9 iOS and Android, they would seem fairly similar. WebOS is 10 rather different. Is that an advantage for you or a difficulty? It 11 didn't catch on before. 12 [Apotheker:] It didn't catch on because Palm didn't have the 13 resources to create the final quality nor could it get distributed 14 widely enough to make it credible. Multitasking is a great 15 feature. So I believe that it will gain a whole crowd of people 16 who will love it. Developers need real estate. You're going to 17 try andfind a platform that is big enough to create traction. 18 Add printers and PC and TouchPad, we're talking 100 to 110 19 million devices a year. We can create a pretty large 20 ecosystem.

21 * * * 22 23 [Apotheker:] I happen to believe that web OS is a uniquely 24 outstanding operating system. It's not correct to believe that it 25 should only be on HP devices. There are all kinds of other 26 people who want to make whatever kind of hardware they 27 make and would like to connect them to the Internet. We'll 28

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1 make it available to enterprises and to SMBs. It will run on 2 lots of HP devices. 3 175. Apotheker also stressed during the interview that HP, with him as 4 CEO, would not release a webOS product that was not "perfect": "The one lesson I 5 have learned from this, and I'm driving my engineers crazy with this, is that we 6 will not release a product that isn 'tperfect." 7 176. Apotheker's statements at the D9 Conference were materially false 8 and misleading when made. Specifically, Apotheker's statements that "FYI our 9 description of webOS" as "end-to'-end" is "accurate" and "we also want to do the 10 same thing for the enterprise"; that "we want to create as holistic an ecosystem as 11 we can"; with "webOS on PCs," "every PC that we ship," "on every printer we 12 ship above $100," and on "lots of HP devices," resulting in "100 to 110 million 13 devices a year. . . creat[ing] a pretty large ecosystem" were materially false and 14 misleading because they misled the market into believing that development for 15 webOS PCs, printers, and a "large ecosystem" of devices was well under way 16 when, as Apotheker knew but failed to disclose, or recklessly disregarded at the 17 time he made the statement, and as alleged in detail in Part IV.D and IV.E above, 18 (1) webOS PCs and printers never progressed beyond the "concepting" phase, such 19 that there was never any POR for webOS PCs and printers and therefore no budget 20 or resources allocated to developing them; (2) the webOS division was unable to 21 devote any resources to developing webOS code for such devices because they 22 were exclusively focused on the TouchPad during the Class Period, and no other 23 division had the expertise to "cut" webOS code for different devices; (3) because 24 of HP's hiring freeze, the Company was unable to hire additional resources to 25 develop appropriate webOS code for PCs and printers; and (4) the Company was 26 struggling with webOS on the flagship TouchPad, and had no resources to extend 27 webOS onto other devices. 28

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1 177. Apotheker's statements that "I happen to believe that webOS is a 2 uniquely outstanding operating system" and that HP would not release a webOS 3 product "that isn't perfect" were false and misleading because, as Apotheker knew 4 but failed to disclose, or recklessly disregarded, and as alleged in greater detail in 5 Part IV.E above, development of the TouchPad was seriously hampered by missed 6 milestones, delays and software problems, and the TouehPad, released on July 1, 7 2011, suffered from significant, known hardware and software defects. 8 G. June 2, 2011 Sanford C. Bernstein &Co. Strategic Decisions Conference 9 178. On June 2, 2011, HP participated in a Sanford C. Bernstein & Co. 10 Strategic Decisions Conference for analysts (the "Sanford Bernstein Conference"). 11 Apotheker again assured investors that "webOS is ready for prime time," that the 12 mini-ecosystem of webOS devices introduced at the February 9 Event was ready to 13 be distributed, and implied that webOS was, therefore, ready to be put onto other 14 "form factor[s]" including PCs: 15 16 So, like any other Company, there are—but we do this, I 17 believe, really well—we are a disruptor in a number of 18 markets. . .. And then there's webOS. I'm sure we will get to 19 talk about webOS as well, where I believe we can disrupt the 20 market as well.

21 * * 22 23 The other thing we are doing really well on the PSG side of the 24 house is webOS. So webOS is ready for prime time. It's now 25 out on a small phone, the Veer. And it will be out on the 26 format of the tablet by the end of June/early July. And it will 27 go into distribution then. We are all about web OS. We are 28 more than about this with the other form factor. Andlam

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1 happy to reconfirm that web OS will be available on PCs, on 2 top of Windows, which creates a whole new market dynamic 3 for webOS. 4 179. During the conference, there was an exchange between Apotheker 5 an analyst confirming when webOS would be on the Company's PCs and 6 projecting the amount of devices running on webOS: 7 8 [Analyst:] Do you have a date for that? webOS on the PC? 9 [Apotheker:] 2012. I know there are 12 months in 2012, even 10 in Germany. And then we have—and we are going to put 11 web OS also on printers. So we can create the kind of a 12 platform of about 100 million, 110 million devices a year. And 13 by the way, we won't shy away from licensing webOS to 14 others if that opportunity arises. 15 16 180. Finally, Sanford Bernstein's CEO asked Apotheker whether webOS 17 would be the exclusive operating system for smartphones and tablets, or whether 18 "could we see in the future, particularly if the market moves in a different directi 19 or you don't get the traction that you would like to," HP would use another 20 operating system like Windows or Android. Apotheker replied: 21 Right now we are focused on making our web OS successful. 22 And as I said, I want to make sure people understand this in 23 this room, it's not so much of, this is the other particular 24 device, even though we want to be successful here. It about 25 the web OS much more than about device A or device B. 26 27 181. Apotheker's statements at the Sanford Bernstein Conference were 28 11 materially false and misleading when made. Specifically, Apotheker's statement

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1 that "we are doing really well on the PSG side of the house [with] webOS," 2 "webOS is ready for prime time," "I am happy to reconfirm that webOS will be 3 available on PCs, on top of Windows, which creates a whole new market dynamic 4 for webOS" in 2012, and "we are going to put webOS also on printers [and] create 5 the kind of a platform of about 100 million, 110 million devices a year," was false 6 and misleading because they misled the market into believing that development for 7 webOS PCs, printers, and a "platform of about 100 million, 110 million devices" 8 was well under way when, as Apotheker knew but failed to disclose, or recklessly 9 disregarded at the time he made the statement, and as alleged in detail in Part IV.D 10 and TV.E above, (1) webOS PCs and printers never progressed beyond the 11 "concepting" phase, such that there was never any POR for webOS PCs and 12 printers and therefore no budget or resources allocated to developing them; (2) the 13 webOS division was unable to devote any resources to developing webOS code for 14 such devices because they were exclusively focused on the TouchPad during the 15 Class Period, and no other division had the expertise to "cut" webOS code for 16 different devices; (3) because of HP's hiring freeze, the Company was unable to 17 hire additional resources to develop appropriate webOS code for PCs and printers, 18 making it impossible for HP to have a webOS-enabled PC by "2012"; (4) the 19 Company was struggling with webOS on the flagship TouchPad and had no 20 resources to extend webOS onto other devices, such that webOS was not "ready 21 for primetime," and (5) Defendants abruptly pulled the plug on webOS only two 22 months after Apotheker made this statement. 23 182. Apotheker's statements that "we are a disruptor in a number of 24 I markets. ... And then there's webOS"; "I believe we can disrupt the market" 25 with webOS"; "we are all about webOS"; and "[i]t's about the webOS much more 26 than about device A or device B" were false and misleading for the same reasons. 27 28

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1 IL 2011 Form 104) Quarterly Report 2 183. On June 8, 2011, only one week after the Sanford Bernstein 3 Conference, HP filed its Form 10-Q quarterly report with the SEC for the second 4 fiscal quarter of 2011, ended April 30, 2011 (the "2Q11 Form 10-Q"). 5 184, Under the heading "Competitive Positioning," the 2Q11 Form 10-Q II stated: 7 We are positioning our businesses to take advantage of 8 important trends in the markets for our products and services. 9 Our primary areas of strategic focus are cloud computing, 10 connectivity, the software to enable and join them together, 11 and the services to implement and manage them.... We are 12 building an innovative ensemble of connected devices based on 13 our WebOS operating system that will facilitate information 14 creation, digitization, transformation and consumption 15 anytime, anywhere. 16 17 185. Further assuring investors of the veracity of these statements, the 18 2Q11 Form 1 0-Q included a certification signed by Apotheker, required under the 19 Sarbanes-Oxley Act of 2002 ("SOX"), representing that the "report does not 20 contain any untrue statement of material fact or omit a material fact necessary to 21 make the statements made, in light of the circumstances under which such 22 statements were made, not misleading with respect to the period covered by this 23 report." 24 186. These statements contained in the 2Q11 Form 10-Q were materially 25 false and misleading when made. Specifically, the statement "we are building an 26 innovative ensemble of connected devices based on our WebOS operating system" 27 was materially false and misleading because it misled the market into believing 28 that development for webOS PCs, printers, and a "platform of about 100 million,

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I 1. 10 million devices" was well under way when (1) webOS PCs and printers never 2 progressed beyond the "concepting" phase, such that there was never any POR for 3 webOS PCs and printers and therefore no budget or resources allocated to 4 developing them; (2) the webOS division was unable to devote any resources to 5 developing webOS code for such devices because they were exclusively focused 6 on the TouchPad during the Class Period, and no other division had the expertise tc 7 "cut" webOS code for different devices; (3) because of HP's hiring freeze, the 8 Company was unable to hire additional resources to develop appropriate webOS 9 code for PCs, printers or any product in an "ensemble of connected devices"; (4) 10 the Company was struggling with webOS on the flagship TouchPad and had no 11 resources to extend webOS onto other devices; and (5) Defendants abruptly pulled 12 the plug on webOS only two months after this statement. The SOX certification 13 signed by Apotheker was materially false and misleading because the 2Q11 Form 14 10-Q did contain material misrepresentations or omissions of fact as alleged 15 herein. 16 I. July 6, 2011 All Things Digital Article 17 187 Following the launch of the TouchPad on July 1, 2011, Defendant 18 Bradley was interviewed by All Things Digital's ma Fried for a July 6 article about 19 HP's webOS strategy going forward. In the article, titled "What the TouchPad 20 Launch Says About HP's webOS Ambitions" (the "July 6 Article"), Bradley again 21 reaffirmed that webOS would be on printers and PCs: 22 In recent interviews HP executives have talked about the 23 importance of webOS to the core of the company's business. 24 HP is counting on webOS to power a range of devices, from 25 future tablets to the Pre3 and other srnartphones. HP is also 26 looking to boost the operating system's presence by making it 27 available on printers as well as from within its Windows Pus. 28

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1 "We've got lots of capabilities that we have to bring to scale," 2 HP Executive Vice President Todd Bradley told AllThingsD. 3 "We've just got to do it." 4 188. The statements by and attributed to Bradley in the July 6 Article were 5 materially false and misleading when made. Specifically, Bradley's statements 6 that UP would use "webOS to power a range of devices" including webOS-based 7 8 PCs and printers, were materially false and misleading because they misled the market into believing that development for webOS PCs, printers, and a "range of 9 devices" was well under way when, as Bradley knew but failed to disclose, or 10 11 recklessly disregarded at the time he made the statement, and as alleged in detail in Part IV.D and IV.E above, (1) webOS PCs and printers never progressed beyond 12 13 the "concepting" phase, such that there was never any POR for webOS PCs and 14 printers and therefore no budget or resources allocated to developing them; (2) the webOS division was unable to devote any resources to developing webOS code for 15 such devices because they were exclusively focused on the TouchPad during the 16 Class Period, and no other division had the expertise to "cut" webOS code for 17 different devices; (3) because of HP's hiring freeze, the Company was unable to 18 hire additional resources to develop appropriate webOS code for PCs and printers; 19 20 (4) the Company was struggling with webOS on the flagship TouchPad and had no resources to extend webOS onto other devices; and (5) Defendants abruptly pulled 21 22 the plug on webOS mere weeks after Bradley made these statements. J. July 11, 2011 Press Release 23 189. On July 11,2011, less than five weeks before UP's August 18, 2011 24 announcements, the Company issued a press release titled "HP to Drive 25 Innovation, Scale and Growth of webOS" (the "July 11 Press Release"), 26 announcing a reorganization of the Palm GBU, now renamed the webOS GIBU, 27 within PSG in order to "accelerat[e] the global expansion of webOS:" 28

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#:1611

1 Building on the successful launch ofHP web OS 3. 0, HP today 2 announced it is accelerating the global expansion of web OS. 3 To support this next phase of growth, HP has appointed 4 Stephen DeWitt as senior vice president and general manager 5 of its webOS global business unit. Jon Rubinstein, the 6 visionary behind webOS, will assume a product innovation 7 role within the Personal Systems Group (PSG) at HP. 8 9 This announcement underscores HP 's strategy to provide a 10 seamless, secure, context-aware experience across HP 's 11 product portfolio, and to deliver innovation at umnatched 12 scale. 13 190. Additionally, in the July 11 Press Release, Bradley represented that: 14 15 With the successful debut of our first wave ofwebOS-based 16 products, we are drawing on our deep executive bench to 17 position the right leaders in the right roles to accelerate the 18 long-term growth of webOS.... Stephen DeWitt has a proven 19 ability to build and scale organizations into global, multibillion 20 dollar operations, and I am confident that he will take webOS 21 to the next level. 22 191. The statements contained in the July 11 Press Release were false and 23 misleading when made. Specifically, the statement referring to the "successful 24 launch of HP webOS 3.0" and Bradley's statements regarding "the successful 25 debut of our first wave of webOS-based products," and "the long-term growth of 26 webOS" were false and misleading because they misled the market into believing 27 that development for the next "wave" of webOS products in "EP's product 28

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1 portfolio" was well under way when, as Bradley knew but failed to disclose, or 2 recklessly disregarded at the time he made the statement, and as alleged in detail in 3 Part IV.D and IV.E above, (1) an update designated webOS 3.0.2 with "hundreds 4 of improvements" was readied even before the TouchPad was released, and the 5 TouchPad was plagued with bugs when released, resulting in a more than 20% 6 return rate; (2) webOS PCs and printers never progressed beyond the "concepting" 7 phase, such that there was never any POR for webOS PCs and printers and 8 therefore no budget or resources allocated to developing them; (3) the webOS 9 division was unable to devote any resources to developing webOS code for such 10 devices because they were exclusively focused on the TouchPad during the Class 11 Period, including after the launch of the TouchiPad, and no other division had the 12 expertise to "cut" webOS code for different devices; (4) because of EP's hiring 13 freeze, the Company was unable to hire additional resources to develop appropriate 14 webOS code for PCs and printers; (5) the Company was struggling with webOS on 15 the flagship TouchPad and had no resources to extend webOS onto other devices; 16 and (6) Defendants abruptly pulled the plug on webOS mere weeks after Bradley 17 made these statements. 18 K. July 20, 2011 Bioo,nberf! News Interview 19 192. On July 20, 2011, less than a month before BP's August 18, 2011 20 announcements, Defendant Bradley was interviewed by Bloomberg News in a 21 segment titled "Bradley Says HP to Invest Aggressively in TouchPad" (the "July 22 20 Interview"). In the July 20 Interview, Bradley again represented webOS as the 23 cornerstone in HP's strategy "to build [a] ubiquitous set of products" across its PC, 24 printing, cloud, and other businesses: 25 As we've launched the TouchPad, frankly, if you go back a 26 year ago to when we bought WebOS and Palm, what we 27 looked at was the ability to create a family of connected 28

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1 devices, a family ofproducts that have a common user 2 interface, a common set of applications, frankly, have ubiquity 3 across the usage model. As we think about connectivity, and 4 connectivity's really what's driving a lot of our business today. 5 It's all about the safe, secure, ubiquitous access to information 6 that's important to you.

7 * * * 8 9 Well, first, HP's a very, very diverse technology company, the 10 largest in the world. So we have multiple pushes that center 11 around some common strategies, a strategy around 12 connectivity. Clearly the cloud is a critical piece of the 13 enablement of you to connect to that information that you've 14 stored in the cloud, your personal cloud, your corporate cloud. 15 Our hardware businesses will provide those on-ramps and off- 16 ramps. Our hardware businesses will provide the 17 infrastructure that will enable the cloud, so as we continue to 18 look broadly at the cloud, continue to look at software across 19 all of our businesses, our printing business, our server 20 business, our PC business, you'll see us look at things like 21 WebOS that create that ecosystem that help us to build that 22 ubiquitous set ofproducts that we know is so important to both 23 consumers and enterprises.

24 * * * 25 26 First, we've talked about, very publicly, our intention to enable 27 all of our PC users to access their Web OS environment, their 28 applications on their PG's, and we're the largest PC

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.1 manufacturer in the world, and we know bringing that volume 2 to our developers wilifurther build out our ecosystem. You've 3 heard us talk pretty broadly about a willingness to expand the 4 distribution of WebOS with partners who would expand our 5 ecosystem, who would bring in products that we may not 6 necessarily produce, but we know would be important in that 7 realm of connected devices.

8 * * 9 10 I think by definition, the TouchPad is differentiated and has 11 some very unique capabilities in the tablet market. I think if 12 we start with, let's agree with the very, very early stages of 13 what should be a huge market for Hewlett Packard and for our 14 industry overall. 15 193. When asked about HP competitors' statements that the TouchPad 16 wasn't selling well and whether HP had a "plan B" if that were true, Bradley 17 specifically denied the rumors, reassuring investors about UP's continued 18 commitment to the TouchPad: 19 20 Well, look, I'm sure our competitors hope it's not selling well. 21 I would tell you that we're very happy with the ramp, we'll 22 continue to invest very aggressively. You'll see a continual 23 increase in the media weight behind advertising it, a continual 24 focus on how we use our 180,000 partners around the world to 25 take us into the enterprise, so they should be concerned about 26 what we'll do competitively. 27 28

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1 194. The statements made by Bradley in the July 20 Interview were 2 materially false and misleading when made. Specifically, Bradley's statements 3 regarding the webOS ecosystem, that HP would "enable all of our PC users to 4 access their WebOS environment," and his denial of the TouchPad's poor sales 5 (e.g., "we're very happy with the ramp"), were false and misleading because they 6 misled the market into believing that development of webOS PCs and the webOS 7 ecosystem was well under way when, as Bradley knew but failed to disclose, or 8 recklessly disregarded at the time he made the statement, and as alleged in detail in 9 Part IV.D and IV.E above, (1) an update designated webOS 3.0.2 with "hundreds 10 of improvements" was readied even before the TouchPad was released, and the 11 TouchPad was plagued with bugs when released, resulting in a more than 20% 12 return rate; (2) webOS PCs and printers never progressed beyond the "concepting" 13 phase, such that there was never any POR for webOS PCs and printers and 14 therefore no budget or resources allocated to developing them; (3) the webOS 15 division was unable to devote any resources to developing webOS code for such 16 devices because they were exclusively focused on the TouchPad during the Class 17 Period, including after the launch of the TouchPad, and no other division had the 18 expertise to "cut" webOS code for different devices; (4) because of Hp's hiring 19 freeze, the Company was unable to hire additional resources to develop appropriate 20 webOS code for PCs, printers or other devices; (5) the Company was struggling 21 with webOS on the flagship TouchPad and had no resources to extend webOS onto 22 other devices; and (6) Defendants abruptly pulled the plug on webOS mere weeks 23 after Bradley made these statements, in part due to poor TouchPad sales. 24 VI. INVESTORS SUFFERED DAMAGES WHEN HP'S STOCK PRICE COLLAPSED AFTER THE MARKET LEARNED THE 25 TRUTH BEHIND THE WEBOS "ECOSYSTEM" 26 195. Lead Plaintiffs' claims for securities fraud are asserted under the 27 fraud-on-the-market theory of reliance, or alternatively the Affiliated Ute doctrine 28 alleged below. Throughout the Class Period, the market prices of HP common

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1 stock traded on the NYSE were artificially inflated as a direct result of Defendants' 2 materially false and misleading statements and omissions complained of herein, 3 including their misstatements regarding UP's webOS expansion strategy. 4 Defendants' material misstatements inflated the price of HP's common stock and 5 maintained that price at a higher level than would have resulted from disclosure of 6 the true condition of BP's operations and prospects with respect to webOS 7 products, both launched and still purportedly in development. The Class Period 8 inflation in BP's stock price was removed when the truth about Bp's webOS plans 9 and operations was revealed to the market by the Company's disclosures, more 10 particularly described below, on August 18, 2011. After the truth became known 11 on August 18, 2011, the price of HP stock declined precipitously as the artificial 12 inflation was removed from the stock price, causing substantial economic injury to 13 Lead Plaintiffs and members of the Class. 14 M. On August 18, 2011, approximately one hour before the close of 15 trading, 1-lIP issued a press release titled "HP Confirms Discussions with Autonomy 16 Corporation plc Regarding Possible Business Combination; Makes Other 17 Announcements." In this press release, HP announced several sudden shifts in 18 strategy together with preliminary third quarter 2011 financial results and severely 19 reduced earnings guidance for fiscal year 2011. In a stunning reversal of its 20 webOS expansion strategy, the Company reported that it would "discontinue 21 operations for webOS devices, specifically the TouchPad and webOS phones," and 22 thus acknowledged that no other webOS products (including PCs or printers) 23 would be developed. HP additionally revealed its plans to explore "strategic 24 alternatives" for PSG, including "a full or partial separation of PSG from HP 25 through a spin-off or other transaction." HP also confirmed that it was "in 26 discussions" to acquire Autonomy Corporation ("Autonomy"), a large British 27 enterprise software firm, later confirmed at $10.3 billion. 28

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I 197. Just after market close on August 18, 2011, HP elaborated on these 2 announcements in a series of press releases issued in rapid succession and marking 3 a major "company transformation." In a press release titled "HP Reports Third 4 Quarter 2011 Results and Initiates Company Transformation," the Company 5 confirmed that it would "discontinue operations for webOS devices, specifically 6 the TouchPad and webOS phones. The devices have not met internal milestones 7 and financial targets. HP will continue to explore options to optimize the value of 8 web OS software going forward." 9 198. In this press release, HP also announced sharply reduced earnings 10 guidance under generally accepted accounting principles ("GAAP") for the frill 11 2011 fiscal year, from the Company's previous GAAP guidance, issued on May 1, 12 2011, of $4.27 per share ("BPS"), to EPS of $3.59-$3.70. The reduction in GAAP- 13 EPS guidance was the result of the webOS shutdown. As announced in the August 14 18, 2011 press release, the revised guidance was "related primarily to restructuring 15 and shutdown costs associated with webOS devices, the amortization and 16 impairment of purchased intangibles, restructuring charges and acquisition-related 17 charges." Similarly, HP's CFO advised during the August 18, 2011 earnings 18 conference call that "for GAAP guidance, we expect to take a GAAP-only cash 19 charge of approximately $1 billion for restructuring and shutdown costs related to 20 webOS devices," and offered no other explanation for the guidance shift. 21 199. More specifically, as reported in the 2011 Form 10-K, HP's Corporate 22 Investments segment, which included the webOS GBU, 19 suffered an 23 $1.6 billion loss from operations due primarily to $755 million of expenses HP 24 obligated to pay suppliers following the webOS shutdown. HP also recorded an 25 26 19 During the Class Period as disclosed in the 2011 Form 10-K, DP's Palm 27 assets, including the webOS dBU, were part of PSG for operationalpurposes but listed under the Corporate Investments business segment for financial reporting 28 purposes.

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1 $885 million charge for impairment of goodwill and purchased intangible assets, 2 and a restructuring charge of $33 million, specifically in connection with the 3 webOS shutdown. Ultimately, as reported in the 2011 Form 10-K, the webOS 4 shutdown caused HP's fiscal 2011 earnings from operations to be reduced by II $1.673 billion. 6 200. HP also confirmed in separate press releases after market close on 7 August 18, 2011 that the Company would - potentially spin-off PSG and would 8 acquire Autonomy for $10.3 billion. 9 201. The market was shocked by the flurry of news, including UP's drastic 10 decision to shutdown webOS and deep reduction in earnings guidance for fiscal 11 2011. As HP' s corrective disclosures began to seep into the market on August 18, 12 2011, the Company's stock price declined $1.88 from its $31.39 closing price on 13 August 17, to close at $29.51. This represented a one-day decline of nearly 6 14 percent, on unusually high trading volume exceeding 96 million shares. This 15 trading volume was nearly five times the average trading volume of 19.6 million 16 shares during the 30 preceding trading days. 17 202. By comparison, on August 18, 2011, the Dow Jones Industrial 18 Average declined 3.68 percent, the S&P 500 Index declined 4.46 percent, and the 19 Dow Jones U.S. Technology Sector Index declined 5.37 percent. All three indices 20 include HP. 21 203. HP stock was hammered the next day by massive sales as the market 22 fully digested the August 18, 2011 news. On August 19, 2011, the stock price 23 plunged to as low as $22.75 before closing at $23.60 on extraordinarily high 24 trading volume of nearly 129 million shares. This trading volume was nearly six 25 times the average trading volume of 22.3 million shares during the 30 preceding 26 trading days (including August 18, 2011). The $23.60 closing price was less than 27 half of the stock's intraday Class Period high of $49.39 on February 10, 2011, the 28 day after HP's February 9 Event, and was HP's lowest close in six years.

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1 204. The $5.91 per-share drop on August 19, 2011 represented a loss of 20 2 percent of the stock's value, erasing more than $12 billion in market capitalization, 3 and was the largest single-day percentage decline in HP's shares since the Black 4 Monday stock market crash of October 1987. 5 205. By comparison, on August 19, 2011, the Dow Jones Industrial 6 Average declined 1.57 percent, the S&P 500 Index declined 1.5 percent, and the 7 Dow Jones U.S. Technology Sector Index declined 2.78 percent. 8 206. In total, from close on August 17, 2011 to close on August 19, 2011, 9 HP stock plummeted $7.79 per share, or nearly 25 percent, on enormous trading 10 volume, wiping out more than $16 billion in shareholder value. By comparison, 11 over the same two-day period, the Dow Jones Industrial Average declined 5.19 12 percent, the S&P 500 Index declined 5.89 percent, and the Dow Jones U.S. 13 Technology Sector Index declined 8.01 percent. 14 207. Multiple securities analysts promptly and sharply downgraded HP's 15 stock in response to the August 18, 2011 news. Robert Baird downgraded HP to 16 "Neutral" from "Outperform." Cross Research downgraded HP to "Hold" from 17 "Buy." Needham & Co. downgraded HP to "Underperform" from "Buy." Credit 18 Agricole Securities downgraded HP to "Underperform" from "Outperform." And 19 Deutsche Bank downgraded HP to "Sell" from "Hold." 20 208. An August 19, 2011 Jeffries analyst report expressed surprise at UP's 21 weak guidance and "dramatic changes" in webOS strategy: 22 After three failed attempts HP is finally kitchen sinking their 23 guidance and outlook. The company unveiled its plans to 24 radically transform by acquiring Autonomy, spinning off PSG, 25 and discontinuing its Web OS hardware line. While the Q3 26 report and corporate actions are disappointing, we continue to 27 see significant value when looking at the sum of the parts. We 28

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1 trim our 2012 BPS est. to $5.50 but reiterate our Buy rating 2 and $40 PT.

3 * * * 4 5 TouchPad discontinued, shutting down Web OS hardware 6 business: We had expected difficulties this quarter and next but 7 we had not expected the dramatic changes that are now 8 occurring. We were pleasantly surprised by the decision to 9 shut down Web OS, in what now appears to have been a 10 disastrous involvement. One has to wonder what legal 11 representation and warranties were made by the previous 12 Palm management. 13 209. An Auriga USA analyst report on August 19, 2011 also reacted 14 negatively to HP's announcements: 15 16 What a Mess! 17 HP reported a soft quarter, provided even softer guidance, 18 announced they might spin off the PC business, announced 19 they were definitely shutting down the tabiet/smartphone 20 business, and topped all this off by once again massively 21 overpaying for an acquisition. Management acknowledged 22 they need to fundamentally change the company, and clearly 23 suggested things are likely to get worse at HP before they get 24 better, so we continue to recommend avoiding the HP "value 25 trap ", and thus maintain a Hold rating while reducing our 26 target to $43 from $45. 27 28

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I 210. The Company's August 18, 2011 announcements also spurred rating 2 agencies to cut their ratings on UP's debt securities. Standard & Poor's reduced i 3 rating to "creditwatch with negative implications." Moody's lowered its rating to 4 "negative" from "stable," citing "the shutdown of [HP's] tablet and srnartphone 5 activities" among other news. 6 211. An August 19, 2011 Bloomberg News article titled "HP Tumbles as 7 Strategic Shift Leads to 'Lost Confidence," reported the following regarding the 8 webOS hardware shutdown and loss of the webOS ecosystem: 9 Apotheker is exiting WebOS products just a month after the 10 company named Palm's former CEO Jon Rubinstein to head of 11 product development and innovation for the personal systems 12 group, which includes PCs, tablets and smartphones. 13 14 Apotheker said in March that all of the company's PCs will 15 feature Web OS, a shift away from machines that only run 16 Microsoft Corp.'s Windows operating system. 17 "He's decided he just can't win that war," said Maribel Lopez, 18 founder of Lopez Research in San Francisco. "If he's not 19 going to be in devices on the PC side, it makes no sense to be 20 in devices on the phone side." 21 22 212. The technology press also was shocked by HP's sudden flip-flop on 23 webOS given the Company's repeated proclamations regarding a broad platform 24 webOS devices including PCs and printers, anchored by the flagship TouchPad. 25 For example, an August 18, 2011 All Things Digital article titled "HP and webOS: 26 But They Seemed So Happy Together!" highlighted the suddenness of Bp's 27 abandonment of webOS, which contrasted starkly with what the Company, 28 including Bradley, had said publicly as recently as July 2011:

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1 How quickly things change, right? Particularly for HP, which 2 just weeks ago was talking up the importance ofwebOS to its 3 core business, reiterating a message delivered by HP Executive 4 Vice President Todd Bradley back in February at the 5 company's big TouchPad unveiling.

6 * * * 7 8 What happened between February and August? Hell, what 9 happened between July and August, after Bradley told 10 AliThingsD 's ma Fried that HP was committed to a broad 11 webOS lineup? WebOS was supposed to be BP's big 12 consumer platform push.... Evidently, HP drastically 13 rethought that commitment. Which raises the question: Was 14 Palm worth the $1.2 billion HP paid for it? It certainly doesn't 15 look that way today. 16 213. Another technology reporter for Mashable, in an article the same day 17 titled "RIP TouchPad: HP To Shut Down WebOS Operations," had a similar 18 reaction to HP's webOS announcement, stating that "UP's about-face on webOS 19 comes as a surprise, especially coming six weeks after the TouchPad went on 20 sale," and referring to the about-face as "more shocking" than the news of a 21 possible spin-off of the PC business. 22 214. A journalist for ZDNet, in an article the same day titled "UP Punts on 23 WebOS, Discontinues TouchPad, Cuts Outlook," described HP's August 18, 2011 24 webOS news as a "bombshell" and stated that "[t]here were signs that TouchPad 25 sales were bleak, but a complete shutdown of WebOS operations was unexpected." 26 27 28

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1 215. Finally, as reported in an August 19, 2011 article in the technology 2 publication CRN, titled "HP Partners Startled by TouchPad's Demise, Uncertain 3 WebOS Future," one analyst succinctly concluded: 4 Chris Barnes, vice president of research and solutions 5 development at Gap Intelligence, a San Diego-based research 6 firm that follows HP, wonders if the HP brass really believed 7 the WebOS talking points. "Web OS was such a linchpin of the 8 company overarching strategy, it was the virtual glue that 9 tied together phones, PCs, tablets, printers," Barnes said. "It 10 really makes you wonder whether HP 's senior leadership ever 11 really believed its own story about developing its own self- 12 supporting ecosystem, vis-à-vis Apple. [It] sounds more like 13 they were dishing out the Kool-Aid but secretly drinking iced 14 tea." 15 16 VII. POST-CLASS PERIOD EVENTS 17 216. HP and Apotheker in particular were widely criticized for flip- 18 flopping on the Company's strategic vision with respect to P50 and webOS. For 19 example, on August 28, 2011, The Wall Street Journal published a scathing article 20 on Apotheker' s dismal performance as CEO titled "H-P's One-Year Plan" with the 21 following premise: "Let's say you were given a year to kill Hewlett-Packard. 22 Here's how you do it." The article outlined Apotheker's disastrous decisions over 23 the past year, in particular those related to HP's webOS business: "Remember that 24 promising webOS software H-P bought in a $1.2 billion acquisition of Palm last 25 year? Sideline it." 26 217. On or about September 22, 2011, just one month after the Company's 27 August 18 announcements, the HP Board fired Apotheker. 28

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1 218. On November 21, 2011, HP announced that it wrote off 2 approximately $3.3 billion in after-tax costs for fiscal year 2011 due to "the wind 3 down of HP's webOS device business." 4 219. Finally, on December 9, 2011, HP announced that it would cut its 5 losses and donate webOS to the "open source" software community, making 6 webOS free for anyone to use and improve. As the Wall Street Journal stated, "H- 7 P [was] making the guts of Palm free for the world," getting "zilch" in return for it

8 $1.2 billion Palm investment. 20 9 220. The negative implications—and irony—of HP's decision to open 10 source webOS are especially apparent in view of Bradley's remarks at the end of 11 the HP Summit nine months earlier, in which he touted webOS as superior to 12 Google' s open-sourced Android operating system: 13 We've got a very, very. . . focused effort to create a developer 14 environment that's very simple, very attractive, and we've 15 gotten very, very good traction on that in the last three weeks 16 since we put it out. So we'll probably never be as.. . we won 17 have the open field that Google has. 18 19 I'm not sure that I think that's advantageous for customers. 20 Actually, we've seen lots ofproblems in the Android ecosystem 21 with some of the security issues that [were] talked about as 22 well as just performance issues. So I think we're well 23 positioned. I feel comfortable with where we are. I feel 24 comfortable with our value proposition. 25 26 27 20 Shira Ovide, "Hewlett-Packard Gets Zilch for WebOS," Wall St. J., Dec. 9, 28 2011.

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1 VIII. ADDITIONAL ALLEGATIONS SUPPORTING THE INDIVIDUAL DEFENDANTS' SCIENTER 2 221. At all relevant times, the Individual Defendants acted with scienter in 3 making materially false and misleading statements during the Class Period. Each 4 of the Individual Defendants had actual knowledge that the statements made by 5 him were false and misleading, or acted with deliberately reckless disregard for the 6 truth or falsity of those statements. Each of the Individual Defendants' intent to 7 deceive, or deliberately reckless disregard for the truth, is demonstrated by 8 substantial direct and circumstantial evidence supporting a strong inference of 9 scienter. 10 A. HP Presents the webOS Ecosystem as Its 11 Core Business During the Class Period 12 222. In July 2010, HP spent $1.2 billion to acquire Palm, primarily to 13 secure Palm's webOS as a proprietary asset. With its own operating system, HP 14 would create an ecosystem of integrated devices, all supported and connected by 15 webOS. 16 223. Throughout the Class Period, Defendants represented repeatedly that 17 this webOS-based ecosystem of connected devices was the cornerstone of Hp's 18 business. At the February 9 Event, Bradley announced the mini-ecosystem 19 comprising the TouchPad, Veer, and Pre3, touting the "seamless" connectivity 20 between the three devices, and stating that HP would extend webOS "across the 21 broadest range of devices" - including printers and UP's most important product, 22 the PC. HIP was the world's number one PC seller, selling almost 20% of all PCs 23 worldwide each year. Thus, HP's representation that it would put webOS on its 24 PCs as part of a "seamlessly" connected ecosystem indicated that the ecosystem 25 would encompass millions of HP's core devices. As Bradley told investors: 26 Across HP, we have phenomenal people working hard to 27 enhance our customers' already familiar experience with the 28

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1 PC to add a rich set of applications and services that only 2 WebOS offers as we introduce that WebOS to our millions of 3 PC customers later this year.... Do the math on two PCs a 4 second. Do the math on two printers per second, and you 5 easily exceed 100 million devices with WebOS deployed 6 annually. 7 224. In a March 10, 2011 HP press release titled "HP Dismisses Rumors 8 Regarding Its PC Business," the Company noted that "HP runs the world's 9 largest PC business and it is core to HP's strategy for the connected world." 10 Similarly, at the HP Summit on March 14, 2011, Apotheker described Bp's PC 11 and printing businesses as "the core of our business." 12 225. Also at the March 14 HP Summit, Apotheker reiterated that HP was 13 14 "getting ready to roll out webOS on a massive scale" with "the potential to deliver more than 100 million webOS enabled devices a year, including our PCs, our 15 TouchPads, our smart phones, and our printers." In a press release the same day, 16 17 Apotheker represented that following the launch of the flagship TouchPad "there 18 will be wave after wave of technology coming out to support the web OS 19 platform." 226. The March 14, 2011 press release regarding the HP Summit again 20 21 emphasized the importance of webOS PCs and printers: "As the world's No. 1 22 maker of PCs and printers, UP has the potential to deliver 100 million webOS- enabled devices a year into the marketplace.... HP already.. . ships two printers 23 and PCs a second, which will be webOS enabled—this huge, growing installed 24 base of devices provides enormous opportunity upon which to build HP-, 25 26 customer- and ecosystem-driven innovation." 227. During the same HP Summit, Bradley commented: "Development 27 teams across HP are working to bring webOS and the webOS experience to the 28

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1 Windows PCs. Next year, we'll migrate tens of millions of web connected printers 2 into the ecosystem." In addition, Apotheker promised that "There will be a beta 3 version for webOS running on a browser on PCs available at the end of the year 4 and you will see us putting web OS on. . . PCs. . . starting from that point 5 onwards. And we hope to reach 100 million devices a year." 6 228. During an interview at the All Things Digital Conference on June 1, 7 2011, Apotheker stated: "We'll put webOS on PCs. It will go on every PC that 8 we'll ship.. .. It will also be on every printer we ship above $100." The 9 following day, at the Sanford C. Bernstein Conference, Apotheker stated: "And I 10 am happy to reconfirm that webOS will be available on PCs, on top of Windows, 11 which creates a whole new market dynamic for webOS.... We are all about 12 webOS." 13 229. A July 11, 2011 press release continued to tout the webOS ecosystem: 14 "HP today announced it is accelerating the global expansion of webOS .... This 15 announcement underscores UP's strategy to provide a seamless, secure, context- 16 aware experience across liP's product portfolio." 17 230. On July 20, 2011—less than a month before HP announced that it was 18 discontinuing all webOS operations—Apotheker told Bloomberg News: "First, 19 we've talked about, very publicly, our intention to enable all of our PC users to 20 access their WebOS environment, their applications on their PCs, and we're the 21 largest PC manufacturer in the world, and we know bringing that volume to our 22 developers will further build out our ecosystem." 23 231. Defendants' repeated statements that HP would put webOS on PCs 24 underscored that the webOS ecosystem of devices was the Company's core 25 business strategy. HP's PSG business segment commanded nearly 20% of the PC 26 market share worldwide and was the Company's largest business segment by 27 revenue, annually generating nearly $40 billion, or more than 30% of total revenue. 28 Throughout the Class Period, as described herein, Defendants represented

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1 repeatedly that webOS-enabled PCs and printers would be available by the end of 2 2012 at the latest, misleading the market into believing that development on those 3 products was well under way. 4 232. Analysts and the news media understood that creating a platform of 5 interconnected HP devices, all running on webOS, was the Company's core 6 strategy. For example, a March 15, 2011 Wells Fargo analyst report stated: 7 HP continued to talk about their webOS platform as their core, 8 unifying layer for connected devices, including Smartphones, 9 PCs, tablets and printers. 10 11 * * * 12 #5 - webOS Is The Core 13 HP was pretty adamant that webOS is the foundation for the 14 HP connected ecosystem. They stated the goal to ship 100 15 million webOS enabled devices (PCs, tablets, smartphones, 16 and printers). 17 18 233. Similarly, a July 6, 2011 All Things Digital article reported that, "[i]n 19 recent interviews HP executives [including Bradley]... have talked about the 20 importance of webOS to the core of the company's business." 21 234. The magnitude of HP's webOS write-downs underscores the 22 importance of webOS to the Company's operations. On August 18, 2011, the 23 Company announced a $1 billion cash charge for "restructuring and shutdown 24 costs related to webOS devices." On November 21, 2011, HP announced that it 25 wrote off approximately $3.3 billion in after-tax costs for fiscal year 2011 due to 26 "the wind down of BP's webOS device business." 27 28

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1 B. The Individual Defendants Were "Hands On" with webOS Device Development 2 235. Direct and circumstantial evidence establishes that the Individual 3 Defendants were hands-on with respect to webOS and the core ecosystem strategy, 4 and thus had access to the truth regarding (1) webOS issues on the flagship 5 TouchPad that persisted even after it was launched, consuming all the available 6 resources in the webOS division; (2) the lack of a POR regarding PCs and printers, 7 meaning that there was never any budget or resources allocated to developing 8 webOS code for those devices, which never progressed beyond the "concepting" 9 phase. 10 236. Consistent with webOS's importance as UP's core business, the 11 Individual Defendants closely monitored the Company's webOS operations and 12 the development of the webOS-based ecosystem of connected devices, including 13 the TouchPad. 14 237. Bradley was the Executive Vice President of PSG, which included the 15 Palm GBU and its webOS operations, and was responsible for overseeing that 16 business. As set forth above, Bradley met frequently with employees in the 17 webOS division, including Rubinstein, and received progress reports on the 18 TouchPad. Leading up to the February 9 Event that introduced the mini-ecosystei 19 comprising the ToucbPad, Pr; and Veer, Bradley met with CW1 twice a day. 20 According to CW1S, after Rubinstein notified Bradley that the webOS division 21 would no longer support the PC and printer divisions but would focus only on the 22 TouchPad, Bradley notified the executives in those divisions. 23 238. Bradley also made lengthy and detailed presentations regarding 24 webOS and the expansion of webOS to PCs and printers - including when that 25 expansion would occur - at significant market and media events on February 9 and 26 March 14, 2011. In addition, Bradley gave multiple interviews to industry and 27 financial journalists regarding the webOS ecosystem. 28

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1 239. Apotheker represented himself as a hands-on CEO. During an 2 interview with the Wail Street Journal at the All Things Digital D9 conference on 3 June 1, 2011, Apotheker discussed the development of webOS software, stating 4 that he was "driving [his] engineers crazy with this" and that "we will not release a 5 product that isn't perfect." According to CWs 3 and 4, Apotheker and Bradley 6 held regular Sunday meetings during the Class Period to discuss the webOS 7 product line. As described herein, Apotheker used the TouchPad before its launch, 8 experienced its software issues first hand, and personally identified at least one 9 problem with the TouchPad's calendar function that he brought to Rubinstein's 10 attention. 11 240. As detailed herein, the Company's financial projections - outlined in 12 the Plan V2, which Apotheker reviewed - contained no expected revenue for 13 webOS PCs or printers for 2011 or for the entirety of 2012, consistent with the 14 of any POR for those products. 15 241. During UP's August 18, 2011 earnings conference call, Apotheker 16 acknowledged that "we have been tracking closely the progress of webOS and 17 analyzing its operational performance and market opportunities." During the same 18 call, the Company's CFO explained that "[a]bout a year ago, we made a bet on 19 web OS and the opportunity to launch our own ecosystem around devices, 20 applications, and new markets," confirming that "[a]t that time, we set clear 21 metrics and milestones to monitor the success of web OS . .. 22 C. Temporal Proximity and Apotlieker's Termination Support Scienter 23 242. As detailed herein, many of Defendants' false and misleading 24 statements regarding webOS PCs and printers, and the expansion of webOS to a 25 "broad" platform of HP devices, were within two months of the Company's 26 August 18, 2011 stunning announcement that it was "discontinu[ing] operations fi 27 webOS devices.... " This temporal proximity supports that Defendants knew they 28

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1 were abandoning webOS at same time they assured the public that webOS would 2 be on multiple devices, including PCs and printers. 3 243. Apotheker was terminated on September 22, 2011, just one month 4 after UP's August 18, 2011 announcement that it was discontinuing operations for 5 all webOS devices and exploring strategic alternatives for the PSG. ru IX. CLASS ACTION ALLEGATIONS 7 244. Lead Plaintiffs bring this action on their own behalf and as a class 8 action pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure 9 on behalf of a class consisting of all persons and entities that, between February 9, 10 2011 and August 18, 2011, inclusive (the "Class Period"), purchased or otherwise 11 acquired shares of HP's publicly traded common stock in the open market, and 12 were damaged thereby (the "Class"). Excluded from the Class are the Defendants; 13 members of the immediate families of the Individual Defendants; HP's subsidiaries 14 and affiliates; any person who is or was an officer or director of HP or any of Bp's 15 subsidiaries or affiliates during the Class Period; any entity in which any 16 Defendant has a controlling interest; and the legal representatives, heirs, successors 17 and assigns of any such excluded person or entity. 18 245. The members of the Class are so numerous that joinder of all 19 members is impracticable. As of February 10, 2011, a date during the Class 20 Period, HP had 2,190,425,537 shares of common stock outstanding and actively 21 trading on the NYSE with the ticker symbol "HPQ." While the exact number of 22 Class members is unknown to Lead Plaintiffs at this time and can only be 23 ascertained through appropriate discovery, Lead Plaintiffs believe that the 24 proposed Class numbers in the thousands and is geographically widely dispersed. 25 Record owners and other members of the Class may be identified from records 26 maintained by HP or its transfer agent and may be notified of the pendency of this 27 action by mail, using a form of notice similar to that customarily used in securities 28 class actions.

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246. Lead Plaintiffs' claims are typical of the claims of the members of the 2 Class. All members of the, Class were similarly affected by Defendants' allegedly 3 wrongful conduct in violation of the Exchange Act as complained of herein. 4 247. Lead Plaintiffs will fairly and adequately protect the interests of the 5 members of the Class. Lead Plaintiffs have retained counsel competent and 6 experienced in class and securities litigation. 7 248. Common questions of law and fact exist as to all members of the 8 Class, and predominate over any questions solely affecting individual members of 9 the Class. The questions of law and fact common to the Class include: 10 (a) whether the federal securities laws were violated by

11 Defendants' acts and omissions as alleged herein; 12 (b) whether the statements made to the investing public during the 13 14 Class Period contained material misrepresentations or omitted to state material 15 information; 16 (c) whether and to what extent the market prices of HP common 17 18 stock were artificially inflated during the Class Period because of the material 19 misstatements alleged herein; 20 (d) whether Defendants acted with the requisite level of scienter; 21 22 (e) whether the Individual Defendants were controlling persons of 23 24 whether reliance may be presumed pursuant to the fraud-on 25 (f) 26 market doctrine; and 27 28

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1 (g) whether the members of the Class have sustained damages as a 2 result of the conduct complained of herein and, if so, the proper measure of 3 damages. 4 5 249. A class action is superior to all other available methods for the fair 6 and efficient adjudication of this controversy because, among other things, joinder 7 of all members of the Class is impracticable. Furthermore, because the damages 8 suffered by individual Class members may be relatively small, the expense and 9 burden of individual litigation make it impossible for members of the Class to 10 individually redress the wrongs done to them. There will be no difficulty in the 11 management of this action as a class action. 12 X. PRESUMPTION OF RELIANCE 13 250. Lead Plaintiffs are entitled to a presumption of reliance under 14 Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972), because the 15 claims asserted herein against Defendants are predicated in part upon omissions of 16 material fact which there was a duty to disclose. 17 251. In the alternative, Lead Plaintiffs are entitled to a presumption of 18 reliance on Defendants' material misrepresentations and omissions pursuant to the 19 fraud-on-the-market theory because: 20 (a) HP's common stock was actively traded on the NYSE, an

21 informationally efficient market, throughout the Class Period; 22 (b) UP's common stock traded at high weekly volumes during the 23 24 Class Period; 25 (c) As a regulated issuer, HP filed periodic public reports with the 26 27 SEC;

28

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1 (d) UP regularly communicated with public investors by means of

2 established market communication mechanisms, including through regular 3 dissemination of press releases on the major news wire services and through other 4 5 wide-ranging public disclosures, such as communications with the financial press, 6 securities analysts and other similar reporting services; 7 (e) The market reacted promptly to public information 8 9 disseminated by HP; 10 (f) HP securities were covered by numerous securities analysts 11 employed by major brokerage firms who wrote reports that were distributed to the 12 13 sales force and certain customers of their respective firms. Each of these reports 14 was publicly available and entered the public marketplace; 15 The material misrepresentations and omissions alleged herein 16 (g) 17 would tend to induce a reasonable investor to misjudge the value of HP's common 18 stock; and 19 Without knowledge of the misrepresented or omitted material 20 (h) 21 facts alleged herein, Lead Plaintiffs and other members of the Class purchased 22 shares of UP's common stock between the time Defendants misrepresented or 23 24 failed to disclose material facts and the time the true facts were disclosed. 25 252. In addition to the foregoing, Lead Plaintiffs are entitled to a 26 presumption of reliance because, as more fully alleged above, Defendants failed to 27 disclose material information regarding HP's business during the Class Period. 28

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1 XI. INAPPLICABILITY OF STATUTORY SAFE HARBOR 2 253. The statutory safe harbor provided for forward-looking statements 3 under certain circumstances does not apply to any of the materially false and 4 misleading statements alleged in this Complaint. The statements alleged to be 5 false and misleading all relate to historical facts or existing conditions and were not identified as forward-looking statements. To the extent any of the false statements 7 alleged herein may be characterized as forward-looking, they were not adequately 8 identified as "forward-looking" statements when made, and were not accompanied 9 by meaningful cautionary statements identifying important factors that could cause 10 actual results to differ materially from those in the purportedly "forward-looking" 11 statements. Alternatively, to the extent that the statutory safe harbor would 12 otherwise apply to any statement pleaded herein, Defendants are liable for those 13 materially false forward-looking statements because, at the time each of those 14 forward-looking statements was made, the speaker knew the statement was false or 15 the statement was authorized or approved by an executive officer of HP who knew 16 that those statements were false. 17 A. Many of Defendants' False and Misleading Statements Were Not Forward-Looking 18 254. The alleged false and misleading statements below (1) relate to 19 historical or current fact; (2) implicate existing conditions; and (3) do not contain 20 projections of future performance or future objectives. 21 1. February 9, 2011 Event 22 • "/RJight now, we're applying the fuliforce, the full 23 capability of our innovation and our scale to a set of 24 products that are the building blocks in a long term 25 strategy, a strategy that's going to further establish us as 26 the leader in creating and enabling these connected 27 experiences" 28

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1 • "So as you've seen, we're extending the WebOSfamily. 2 We're adding two new smartphones, the first ever 3 WebOS TouchPad, all phenomenal products featuring the 4 significant mobile innovation of WebOS.... We have a 5 commitment to extend the We bUSfootprint even further 6 as the year progresses, taking WebOS to other connected 7 devices, including printers, some form factors you 8 haven't seen before" 9 • "so across HP we have phenomenal people working hard 10 to enhance our customers' already familiar experience 11 with the PC to add a rich set of applications and services 12 that only WebOS offers, and as we introduce that 13 WebOS to our millions of PC customers later this year" 14 15 • "Second is the commitment HP is making to develop the 16 full potential of WebOS in the marketplace. We're 17 investing in a complete buildout. We're committed to 18 helping build this ecosystem, from small to big, from 19 local to global" 20 2. February 22,2011 Earnings Call 21 • "Qi demonstrated the power of EP's robust portfolio 22 [in] our existing core businesses as well as new product 23 launches and innovations, [including] our successful 24 webOS launch" 25 26 3. Marcia 14, 2011 HP Summit 27 • "we have an innovative ensemble of connected devices 28 as well as an operating system, webOS, that can provide

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1 one user interface across a fully-connected life from the 2 home, to the road, to the office" 3 • "one of the things that we're focusing on right now as 4 we're getting ready to roll out webOS on a massive 5 scale" 6 7 • "Because what really matters is how we use great 8 technology to make great products. We've accomplished 9 this with webOS because of the unique architecture and 10 functionality that it permits. . * 11 • "Development teams across HP are working to bring 12 webOS and the webOS experience to the Windows PCs" 13 14 4. March 14 HP Summit Press Conference 15 • "So web OS is an unbelievably attractive and stunning 16 technology. The devices we have been able to put on 17 display on February 9 have in themselves a certain set of 18 characteristics that make them unique.... [A]nd some 19 of the other technology features of web OS make it into 20 an outstanding web operating system" 21 5. May 17, 2011 Conference Call 22 • "We believe that we have a great strategy to execute 23 towards our connectivity approach, and we are very 24 excited about our TouchPads coming out in particular in 25 the summer" 26 27 28

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1 6. June 1, 2011 All Things Digital Interview 2 "T happen to believe that webOS is a uniquely 3 outstanding operating system" 4 7. June 2, 2011 Sanford C. Bernstein Conference 5 • "The other thing we are doing really well on the PSG 6 side of the house is webOS. So webOS is ready for prime 7 time.... We are all about webOS" 8 9 8. June 8 2011 2011 Form 10-0 10 • "We are building an innovative ensemble of connected 11 devices based on our WebOS operating system that will 12 facilitate information creation, digitization, 13 transformation and consumption anytime, anywhere" 14 9. July 6, 2011 Interview for All Things Digital 15 . "the company is committed to abroad webOS lineup" 16 17 10. July 11, 2011 HP Press Release 18 • "Building on the successful launch of HP webOS 3.0, HP 19 today announced it is accelerating the global expansion 20 of webOS" 21 • "This announcement underscores HP 's strategy to 22 provide a seamless, secure, context-aware experience 23 across HP's product portfolio, and to deliver innovation 24 at unmatched scale" 25 26 • "With the successful debut of our first wave of webOS- 27 based products, we are drawing on our deep executive 28

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1 bench to position the right leaders in the right roles to 2 accelerate the long-term growth of webOS" 3 11. July 20 2011 Bloomberg News Interview 4 a "I think by definition, the TouchPad is differentiated and 5 has some very unique capabilities in the tablet market" 6 7 • "I would tell you that we're very happy with the ramp, 8 we'll continue to invest very aggressively" 9 255. These statements concern then-existing conditions and their present 10 effects on HP, specifically the current functionality of webOS and the "first wave" 11 of webOS devices, as well as the Company's present efforts to put webOS on a 12 broad "platform" of HP devices including PCs and printers. 13 256. To the extent any of these statements touch on future intent, they are 14 mixed statements of present facts and future intent and not entitled to safe harbor 15 protection with respect to the part of the statement that refers to the present. 16 B. Any Statements Touching on Future Plans or Intentions are 17 Inextricably Intertwined with and Dependent on Present Fact 18 257. Defendants' assertions that HP would put webOS across a broad 19 platform of devices, including PCs and printers by the end of 2012, were not made 20 in isolation. These assertions, in context, were inextricably intertwined with, and 21 dependent on, statements about (1) the present condition of webOS and the mini- 22 ecosystem comprising the TouchPad, the Veer, and the Pre; and (2) HP's present 23 efforts - including its investment in financial and human resources - to put webOS 24 on PCs and printers. For example, overwhelming webOS problems on the 25 TouchPad resulted in no resources being available for other devices like PCs or 26 printers, which never progressed beyond the "concepting" phase. 27 258. The following statements were inextricably intertwined with false and 28 misleading statements about current and historical facts:

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1

2 Statement Touching on Future Surrounding Misstatements of 3 Present Fact 4 February 9, 2011 Event 5 • "We have a commitment to extend • "right now, we're applying the full 6 the webOS footprint even further as force, the full capability of our the year progresses, taking WebOS to innovation and our scale to a set of 7 other connected devices, including products that are the building blocks 8 printers, some form factors you in a long term strategy, a strategy haven't seen before" that's going to further establish us as 9 the leader in creating and enabling • I m excited to announce our plans 10 to bring webOS to the HP device that these connected experiences" 11 has the biggest reach of all: the • We're adding two new personal computer. ... Do the math smartphones, the first ever webOS 12 on two PCs a second. Do the math on TouchPad, all phenomenal products 13 two printers per second, and you featuring the significant mobile easily exceed 100 million devices innovation of webOS.... We have a 14 with webOS deployed annually" commitment to extend the webOS footprint even further as the year 15 • Were investing in a complete 16 buildout. We're committed to helping progresses" build this ecosystem, from small to • "so across HP we have 17 big, from local to global" phenomenal people working hard to 18 enhance our customers' already familiar experience with the PC to add 19 a rich set of applications and services 20 that only webOS offers, and as we introduce that webOS to our millions 21 of PC customers later this year" 22

23 February 22,2011 Earnings Call 24 • "We look forward to providing a • "Most importantly, I am very 25 differentiated seamless experience pleased with our February 9 across our tablets, smartphones, announcement. We are all excited 26 printers, PCs and future form factors" about our webOS platform, the • WebOS provides a differentiated devices that we announced and a , platform that, over time, will redefine incremental opportunity that webOS F' provides )ND AMENDED CLASS ACTION COMPLAINT 111 SA CV 11-01404 AG (RNBx) Case 11-cv-01404-AG-RNB Document 89 Filed 10/19/12 Page 116 of 128 Page ID

#:1641

1 the user experience across HIP's • "Qi demonstrated the power of device solutions from consumer to HP's robust portfolio [in] our existing 2 enterprise and from smartphone to core businesses as well as new 3 tablet to other devices" product launches and innovations, [including] our successful webOS 4 • "in the second half of the year, we'll also benefit from the launch of launch" 5 our new webOS family of products" • "We've been working with the 6 developer community to build out the application ecosystem and are pleased 7 with the progress so far" 8 9 March 14, 2011 HP Summit 10 • "we have the potential to deliver • "one of the things that we're 11 more than 100 million webOS enabled focusing on right now as we're getting 12 devices a year, including our PCs, our ready to roll out webOS on a massive TouchPads, our smart phones, and our scale" 13 printers" "Because what really matters is 14 • "across smart phones, touchpads, :ow we use great technology to make 15 PCs, printers, we have the potential to great products. We've accomplished deliver tens if not hundreds of this with webOS because of the 16 millions of webOS enabled devices unique architecture and functionality 17 annually into a huge installed base" that it permits.. . 18 • "we're getting ready to roll out webOS on a massive scale" • "Development teams across HP are 19 working to bring webOS and the • "We're investing in the build out webOS experience to the Windows 20 of this webOS] ecosystem, from PCs" 21 small to big, from professional to personal, from cloud enablers to 22 connected devices that are both local 23 and global" 24 March 14, 2011 HP Summit Press Conference 25 • "the Touch pad will come out in • "So webOS is an unbelievably June and from that day onwards there attractive and stunning technology. 26 will be wave after wave of technology The devices we have been able to put 27 coming out to support the webOS on display on February 9 have in platform" 28 themselves a certain set of

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I • "There will be a beta version for characteristics that make them unique. webOS running on a browser on PCs ... IIA]nd some of the other 2 available at the end of the year and technology features of webOS make it 3 you will see us puffing webOS . . . on into an outstanding web operating PCs, on Windows PCs I should add, system" 4 starting from that point onwards. And • we do work very closely together we hope to reach 100 million devices and just as a proof point of that, our a year. We will put the same 6 webOS technology is very seamless technology on our printers. We will when it comes to working with 7 put them on PCs. We will put them Microsoft's Windows technology and 8 on [T]ouch[P]ads. We will put them you can [actually work] one of the on srnartphones so you will see this to other. So we will be shipping in the 9 become a very massive, very broad future PCs, Windows-based PCs that 10 platform." contain also webOS" • "But going forward we don't 11 • "I would love to point you back to intend to play in the junior league in what we showed on February 9 when 12 this business either" we actually put webOS out in the 13 market on three devices, on two smartphones and the touchpad. ... I 14 don't want to do the big commercial 15 for webOS right now, but it is a user experience that is world class. I 16 daresay, to use the Californian 17 expression, it is beyond, it is [awesome and cool]. It is absolutely 18 amazing. It is intuitive, it's easy to 19 learn; you get it instantaneously. It does multi-tasking perfectly well and 20 the device is loaded. They are all 21 talking to each other; you have a seamless experience"; 22 See also statements from HP 23 Summit Event 24 March 14, 2011 HP Summit Press Release 25 • "HP intends to build webOS into a • See statements from HP Summit 26 leading connectivity platform. As the Event and press conference 27 world's No. 1 maker of PCs and printers, HP has the potential to 28 deliver 100 million webOS-enabled SECOND AMENDED CLASS ACTION COMPLAINT 113 No. SA CV 11 -0 1404 AG (RNI3x) Case 11-cv-01404-AG-RNB Document 89 Filed 10/19/12 Page 118 of 128 Page ID #:1643

1 devices a year into the marketplace" 2 • "HP already.. . ships two printers and PCs a second, which will be 3 webOS enabled—this huge, growing 4 installed base of devices provides enormous opportunity upon which to 5 build HP-, customer- and ecosystem- 6 driven innovation" 7 May 17, 2011 Earnings Call 8 • "webOS is a differentiated • "We believe that we have a great 9 platform that will redefine the user strategy to execute towards our experience across UP's device connectivity approach, and we are 10 solutions from consumers to very excited about our TouchPads 11 enterprise and from smartphones to coining out in particular in the tablets and other devices" summer" 12 • "And as we all believe that there • "We remained in the investment 13 will be a convergence of these phase in terms of completing the 14 different form factors over time— software builds, working with the TouchPads, PCs, etcetera, and in developer community on the 15 particular, notebooks—we believe this application ecosystem and making 16 is a great opportunity for HP to sure that we get the product right" participate in this" 17 18 June 1, 2011 All Things Digital Interview 19 • "We want to create as holistic an 20 • "The one lesson T have learned ecosystem as we can. We'll put from this, and I'm driving my 21 webOS on PCs. It will go on every engineers crazy with this, is that we PC that we'll ship. . . . It will also be will not release a product that isn't 22 on every printer we ship above $100" perfect." 23 • "Add printers and PC and • "ii happen to believe that webOS is 24 TouchPad, we're talking 100 to 110 a uniquely outstanding operating million devices a year. We can create system" 25 a pretty large ecosystem" PON 27 28

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1 June 2, 2011 Sanford C. Bernstein Conference 2 • "And I am happy to reconfirm that • "The other thing we are doing 3 webOS will be available on PCs, on really well on the PSG side of the top of Windows, which creates a 4 house is webOS. So webOS is ready whole new market dynamic for for prime time.... We are all about 5 webOS" webOS" 6 • "and we are going to put webOS • "Right now we are focused on also on printers. So we can create the making our webOS successful. And 7 kind of a platform of about 100 as T said, . . . it's not so much of, this 8 million, 110 million devices a year" is the other particular device, even 9 though we want to be successful here. It's about the webOS much more than 10 about device A or device B." 11 July 11, 2011 Press Release 12 • "This announcement underscores • "Building on the successful launch 13 UP's strategy to provide a seamless, of HP webOS 3.0, HP today secure, context-aware experience 14 announced it is accelerating the global across HP's product portfolio, and to expansion of webOS" 15 deliver innovation at unmatched scale" 16 17 July 20, 2011 Bloomberg News Interview 18 • "First, we've talked about, very • "I think by definition, the publicly, our intention to enable all of TouchPad is differentiated and has 19 our PC users to access their webOS some very unique capabilities in the 20 environment, their applications on tablet market.... I would tell you their PCs" that we're very happy with the ramp, 21 we'll continue to invest very 22 aggressively." 23 "we're the largest PC manufacturer 24 in the world, and we know bringing that volume to our developers will 25 further build out our ecosystem" 26 27 259. These statements were made in the context of, and inextricably 28 intertwined with, a larger statement or press release in which Defendants also

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1 addressed present or historical facts regarding (I) the present condition of webOS 2 software; (2) the present functionality of the TouchPad, Veer and Pre; and (3) HP's 3 present efforts to put WebOS on PCs and printers. 4 C. Several False and Misleading Statements are Not Identified as "Forward-Looking" 5 260. The following statements were not identified as forward-looking and 6 are not protected by the safe harbor: 7 • All February 9, 2011 Event statements 8 • All March 14, 2011 press conference statements 9 • All statements in the March 14, 2011 press release 10 • All June 1, 2011 All Things Digital interview statements 11 • All June 2, 2011 Sanford C. Bernstein conference statements 12 • All statements in July 6, 2011 All Things Digital at 13 • All statements in the July 11, 2011 press release 14 • All July 20, 2011 Bloomberg interview statements 15 D. Defendants' False and Misleading Statements Were Not 16 Accomnanied by Meaningful Cautionary Language 17 261. None of Defendants' statements were accompanied by meaningful 18 cautionary language identifying important factors that could cause actual results to 19 differ materially from any results projected. 20 262. To the extent there was cautionary language, that language was not 21 meaningful because the potential risks identified had already occurred. As detai 22 herein, at the time Defendants were touting webOS and expanding the ecosystem 23 to include PCs and printers by the end of 2012 at the latest, as Defendants knew 24 that (1) webOS PCs and printers never progressed beyond the "concepting" phase, 25 such that there was never any POR for webOS PCs and printers and therefore no 26 budget or resources allocated to developing them, making it impossible for such 27 products to be introduced by the end of 2012 as Defendants represented; (2) the 28 webOS division was unable to devote any resources to developing webOS code for

)ND AMENDED CLASS ACTION COMPLAINT 116 SA CV 11-01404 AG (RNJ3x) Case 8:11-cv-01404-AG-RNB Document 89 Filed 10/19/12 Page 121 of 128 Page ID #:1646

1 such devices because they were exclusively focused on the TouchPad during the 2 Class Period, and no other division had the expertise to "cut" webOS code for 3 different devices; (3) because of 1-]P's hiring freeze, the Company was unable to 4 hire additional resources to develop appropriate webOS code for PCs and printers; 5 and (4) the Company was struggling with webOS on the flagship TouchPad, and 6 had no resources to extend webOS onto a "family of devices." Thus, that HP 7 would abandon webOS and the ecosystem of webOS devices was a risk that had 8 already materialized at the time Defendants made their false and misleading 9 statements. 10 263. Any cautionary language was boilerplate and insufficiently 11 meaningful, as in the examples below. 12 1. March 14, 2011 HP Summit 13 264. Attendees were warned only to "be aware that our discussions today 14 may include some forward looking information that involves risks, uncertainties, 15 and assumptions" and referred to the general risks listed in HP's most recently 16 filed 1 0-Q. This language failed to address the specific risk that already had 17 materialized - i.e., that HP's webOS ecosystem strategy had failed, and that there 18 were no resources available to put webOS on PCs and printers. 19 2. May 17, 2011 Earnings Call 20 265. At the beginning of the call, listeners were told only that "some 21 information provided during this call may include forward-looking statements that 22 are based on certain assumptions and are subject to a number of rigs and 23 uncertainties, and actual future results may vary materially," then referred to 24 general risks described in HP's most recent 10-Q. This language was (1) not 25 sufficiently related to the statements made on the call; and (2) did not warn against 26 or relate to the risk that HP would abandon all webOS products just a few months 27 later. 28

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ii XII. CLAIMS FOR RELIEF 2 COUNT I 3 Violations of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 4 (Asserted Against All Defendants) 5 266. Lead Plaintiffs repeat and reallege each and every allegation set forth 6 above as if frilly set forth herein. 7 267. This Count is asserted pursuant to Section 10(b) of the Exchange Act 8 and Rule I Ob-5 promulgated thereunder by the SEC against all Defendants. 9 268. As alleged herein, throughout the Class Period, Defendants, 10 individually and in concert, directly and indirectly, by the use of the means or 11 instrumentalities of interstate commerce, the mails and/or the facilities of national 12 securities exchanges, made untrue statements of material fact and/or omitted to 13 state material facts necessary to make their statements not misleading and carried 14 out a plan, scheme and course of conduct, in violation of Section 10(b) of the 15 Exchange Act and Rule lob-S promulgated thereunder. Defendants intended to 16 and did, as alleged herein, (i) deceive the investing public, including Lead 17 Plaintiffs and members of the Class; (ii) artificially inflate and maintain the prices 18 of HP common stock; and (iii) cause Lead Plaintiffs and members of the Class to 19 purchase HP common stock at artificially inflated prices. 20 269. The Individual Defendants were individually and collectively 21 responsible for making the false and misleading statements and omissions alleged 22 herein and having engaged in a plan, scheme and course of conduct designed to 23 deceive Lead Plaintiffs and members of the Class, by virtue of having made public 24 statements and prepared, approved, signed and/or disseminated documents that 25 contained untrue statements of material fact and/or omitted facts necessary to make 26 the statements therein not misleading. 27 270. As set forth above, Defendants made their false and misleading 28 statements and omissions and engaged in the fraudulent activity described herein

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1 knowingly and intentionally, or in such a deliberately reckless manner as to 2 constitute willful deceit and fraud upon Lead Plaintiffs and the other members of 3 the Class who purchased TIP common stock during the Class Period. 4 271. In ignorance of the false and misleading nature of Defendants' 5 statements and omissions, and relying directly or indirectly on those statements or 6 upon the integrity of the market price for HP common stock, Lead Plaintiffs and 7 other members of the Class purchased HP common stock at artificially inflated 8 prices during the Class Period. But for the fraud, Lead Plaintiffs and members of 9 the Class would not have purchased HP common stock at such artificially inflated 10 prices. As set forth herein, when the true facts were subsequently disclosed, the 11 price of 1-IP common stock declined precipitously and Lead Plaintiffs and members 12 of the Class were harmed and damaged as a direct and proximate result of their 13 purchases of HP common stock at artificially inflated prices and the subsequent 14 decline in the price of that stock when the truth began to be disclosed, 15 272. By virtue of the foregoing, Defendants are liable to Lead Plaintiffs 16 and members of the Class for violations of Section 10(b) of the Exchange Act and 17 Rule 1 Ob-5 promulgated thereunder. 18 COUNT II 19 Violations of Section 20(a) of 20 the Securities Exchange Act of 1934 (Asserted Against the Individual Defendants) 21 273. Lead Plaintiffs repeat and reallege each of the allegations set forth 22 above as if fully set forth herein. 23 274. This Count is asserted pursuant to Section 20(a) of the Exchange Act 24 against each of the Individual Defendants. 25 275. As alleged above, HP violated Section 10(b) of the Exchange Act and 26 Rule lob-S promulgated thereunder by making false and misleading statements in 27 connection with the purchase and sale of securities and by participating in a 28

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fraudulent scheme and course of business or conduct throughout the Class Period. 2 This fraudulent conduct was undertaken with scienter and the Company is charged 3 with the knowledge and scienter of each of the Individual Defendants who knew of 4 or acted with deliberate reckless disregard of the falsity of the Company's 5 statements and the fraudulent nature of its scheme during the Class Period. 6 276. The Individual Defendants were controlling persons of HP during the 7 Class Period, due to their senior executive positions with the Company and their 8 direct involvement in the Company's day-to-day operations, including its PSG and 9 webOS businesses. 10 277. By virtue of the foregoing, the Individual Defendants each had the 11 power to influence and control, and did influence and control, directly or 12 indirectly, the decision-making of HP, including the content of its public 13 statements with respect to PSG and the Company's webOS business. 14 278. As set forth above, these Defendants acted knowingly and 15 intentionally, or in such a deliberately reckless manner as to constitute willful 16 and deceit upon Lead Plaintiffs and the other members of the Class who purchased 17 HP common stock during the Class Period. 18 279. In ignorance of the false and misleading nature of these Defendants' 19 statements and omissions, and relying directly or indirectly on those statements or 20 upon the integrity of the market prices for 1-IP common stock, Lead Plaintiffs and 21 other members of the Class purchased HP common stock at an artificially inflated 22 price during the Class Period. But for the fraud, Lead Plaintiffs and members of 23 the Class would not have purchased HP common stock at artificially inflated 24 prices. As set forth herein, when the true facts were subsequently disclosed, the 25 price of HP common stock declined precipitously and Lead Plaintiffs and members 26 of the Class were harmed and damaged as a direct and proximate result of their 27 purchases of HP common stock at artificially inflated prices and the subsequent 28 decline in the price of that stock when the truth began to be disclosed. COND AMENDED CLASS AcTIoN COMPLAINT 120 o.SACV 11 -0 1404 AG (RNBx)

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1 280. By reason of the foregoing, the Individual Defendants are liable to 2 Lead Plaintiffs and the members of the Class for violations of Section 20(a) of the 3 Exchange Act. 4 XIII. PRAYER FOR RELIEF 5 WHEREFORE, Lead Plaintiffs respectfully pray for judgment as follows: 6 A. Determining that this action is a proper class action maintained under 7 Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure, certifying Lead 8 Plaintiffs as class representatives, and appointing Labaton Sucharow LLP and 9 Motley Rice LLP as class co-counsel pursuant to Rule 23(g); 10 B. Declaring and determining that Defendants violated the Exchange Act 11 by reason of the acts and omissions alleged herein; 12 C. Awarding Lead Plaintiffs and the Class compensatory damages 13 against all Defendants, jointly and severally, in an amount to be proven at trial 14 together with prejudgment interest thereon; 15 D. Awarding Lead Plaintiffs and the Class their reasonable costs and 16 expenses incurred in this action, including but not limited to attorney's fees and 17 fees and costs incurred by consulting and testifying expert witnesses; and 18 E. Granting such other and further relief as the Court deems just and 19 proper. 20 XIV. DEMAND FOR JURY TRIAL 21 Lead Plaintiffs demand a trial by jury of all issues so triable. 22 23 I Dated: October 19, 2012 LAB7 SUCHAROW LLP) 24 By: onathan Gardner 25 ardnerAIabaton. corn V gelina guyen 26 anguyenlabaton. corn 140 Broadway 27 New York, New York 10005 Telephone: (212) 907-0700 28 Facsimile: (212) 818-0477

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#:1651

Mark I. Labaton (159555) m1abaton(.4mot1eyrice. corn MOTLEY-RICE LLP 1100 Glendon Avenue, 14th Floor Los Angeles, California 90024 Telephone: (310) 500-3488 Facsimile: (310) 824-2870 Gregg S. Levin (pro hac vice) glevinmotleyrzce. corn William S. Norton (pro hac vice) bnortonmotleyrice.com Christopher F. Moriarty (pro hac vice) cmoriartv(I)motlevrice. corn MOTLEYTPJCB LLP 28 Bridgeside Boulevard Mt. Pleasant, South Carolina 29464 Telephone: (843) 216-9000 10 Facsimile: (843) 216-9450 11 Attorneys for Lead Plaintiffs 12 Arkansas Teacher Retirement System, Union Asset Management Holding AG, 13 Labourers'Pension Fund of Central and Eastern Canada, LJUIVA National 14 Industria Pension Fund, and LIUNA 5taff& AJJiliates Pension Fund and 15 Co-Lead Counsel for the Class 16 Stephen R. Basser (121590) sbasser@barrack corn 17 Samuel M. Ward (216562) sward(c-b,barrack. corn 18 BARRACK, RODOS & BAC]INE One America Plaza 19 600 West Broadway, Suite 900 San Diego, California 92101 20 Telephone: (619) 230-0800 Facsimile: (619) 2304874 21 Daniel B. Bacine 22 dbacine(à) barrack. corn BARRACK, RODOS & BACINE 23 Two Commerce Square 2001 Market Street, Suite 3300 24 Philadelphia, Pennsylvania 19103 Telephone: (215) 963-0600 25 Facsimile: (215) 963-0838 26 Additional Counsel for LIUNA National (Industrial) Pension Fund and 27 LIUNA Staff & Affiliates Pension Fund 28

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1 APPENDIX A 2 c1w Position Dates of Employment Web OS Division 3 1 Vice President of Software Engineering, led th October 2010 to July 4 team developing the web OS software platform 2011 for the TouchPad 5 2 Senior Vice President of Enterprise Business Late June 2011 to 6 Development, responsible for all commercial December 2011 7 account application development for webOS 3 Senior Vice President of webOS, responsible July 2010 to November 8 for running the engineering department 2011 9 4 Director and then Senior Director of webOS, July 2010 to November in charge of core applications including 2011 10 music, messaging, and gallery photos 11 5 Vice President, in charge of webOS July 2011 through July engineering segment, supervised production 2012 12 of webOS codes 13 7 Senior Wireless Engineer, part of the team April 25, 2011 through that focused on the integration of wireless January 6, 2012 14 functionality on the TouchPad 15 9 Senior Software Quality Assurance ("QA") July 2010 to April 2012 Engineer, supported groups working on 16 implementation of WebOS applications after 17 a product had a POR, creating test ware, test scripts, test plans, and test cases 18 10 Director of Product Delivery Engineering, August 2010 to January 19 first led a team working on the Pre, Pre 2 and 2012 Pre plus, then transitioned to the webOS 20 "platform team," as part of the product 21 delivery team in charge of program management, quality assurance, and software 22 development 23 11 Chief Architect of webOS Joined HP July 2010, Chief Architect of 24 webOS from January 25 2011 to February 2012 26 27 28

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I. CW Position Dates of Employment 12 Vice President of Product and Wireless July 2010 to January 2 Development, supervised the team 2012 3 responsible for all webOS "hardware products," specifically shipping and installing 4 webOS on products; also supervised the 5 webOS quality assurance team 6 14 Regional Solution Specialist in webOS, July 2010 to October responsible for "overlay and support" of the 2011 7 PSG teams in the Northeast 8 15 Director of Engineering, webOS System & July 2010 through UT Platform, oversaw a team of engineers that December 2011 9 worked on all webOS software 10 16 Executive Assistant for Nathan Kelly, former March 2011 through VP of Global Operations & IT, and Lee Ott, March 2012 11 former Director of Product Marketing and 12 Product Management Other Divisions 13 2 Vice President of Marketing and Strategy in 2000 until late June 2011 14 the Solution Partners Organization area of PSG 15 6 Director of Product Management, part of September 2009 through 16 Consumer Applications & Software in the PC June 2012 software division; worked in conjunction 17 with other HP divisions including the webOS 18 GBU 8 Supply Chain Operations/Product 1995 to August 2011 19 Engineer/Program Manager in the Global 20 Services, responsible for servicing hardware product lines, including repair services for 21 commercial laser jet printers 22 13 Product Manager for tablets and software in September 2010 through the image and printing division at HP April 2012 23 17 Senior Finance Manager/Global Operations, July 2010 to May 2012 24 responsible for product profitability; also involved in revising and managing the 25 warranty components of products and setting 26 up the supply chain before the products went to market 27 28

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