##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    20549
    Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   FOR THE FISCAL YEAR ENDED JUNE 27,
    2009
 ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   For the transition period
    from          
    to
  Commission file number:
    000-30684
  
 OCLARO, INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

20-1303994(State or Other Jurisdiction of
    Incorporation or Organization)

(I.R.S. Employer Identification
    No.)   2584 Junction Avenue, San Jose, California, 95134
 (Address of Principal Executive
    Offices, Zip code)
  (408) 383-1400
  (Registrants telephone
    number, including area code)
    Common Stock, Par Value $0.01 Per Share

NASDAQ Global Market(Title of each class)

(Name of each exchange on which registered)   None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2).  Yes o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





OCLARO,
    INC.
    ANNUAL REPORT ON
    FORM 10-K
    FOR THE FISCAL YEAR ENDED JUNE 27, 2009
    TABLE OF CONTENTS
   
 PagePART IItem 1.

Business

3Item 1A.

Risk Factors

12Item 1B.

Unresolved Staff Comments

30Item 2.

Properties

30Item 3.

Legal Proceedings

30Item 4.

Submission of Matters to a Vote of Security
    Holders

33PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

34Item 6.

Selected Financial Data

36Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations

37Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk

54Item 8.

Financial Statements and Supplementary Data

55Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure

55Item 9A.

Controls and Procedures

55Item 9B.

Other Information

56PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance

56Item 11.

Executive Compensation

56Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters

56Item 13.

Certain Relationships and Related Transactions,
    and Director Independence

56Item 14.

Principal Accounting Fees and Services

56PART IVItem 15.

Exhibits and Financial Statement Schedules

57Signatures

58EX-10.40EX-10.41EX-10.45EX-10.46EX-10.47EX-10.48EX-10.49EX-21.1EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1EX-32.2   2




---



##### Table of Contents



SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K Form 10-K
 PART I  Item 1.
    Business  Overview
     3




---



##### Table of Contents



Form 10-K
    www.oclaro.com Form 10-K. Form 10-K, Form 10-Q, Form 8-K,
  Recent
    Development
  state-of-the
  Industry
     4




---



##### Table of Contents



fiber-to-the-premise
    Our
    Strategy
    3-inch
  sub-systems
 5




---



##### Table of Contents



best-in-class
    Our
    Product Offerings
    Transmission
    Products for the Telecom Market
  
    Laser transmitters.  Tunable laser transmitters.
  Fixed wavelength laser transmitters.
    
    Lithium niobate modulators.  Our lithium
    niobate modulators are optical devices fabricated from lithium
    niobate and other optical devices that manipulate the phase or
    the magnitude of an optical signal. Their primary function is to
    transfer information on an optical carrier by modulating the
    light. These devices externally modulate the lasers of discrete
    transmitter products including, but not limited to, our own
    standalone laser products.
    Receivers.  Our portfolio of discrete receivers
    for metro and long-haul applications at 2.5 Gb/s and 10 Gb/s
    includes avalanche photodiode, or APD, preamp receivers, as well
    as photodiode, or PIN, preamp receivers, and PIN and APD modules
    and products that feature integrated attenuators. 6




---



##### Table of Contents




    Transceivers.  Our small form factor pluggable
    transceiver portfolio includes SFP products operating at
    2.5 Gb/s and XFP products operating at 10 Gb/s, including a
    tunable X2 extended product operating at 10 Gb/s.
    Transponder modules.  Our transponder modules
    provide both transmitter and receiver functions. A transponder
    includes electrical circuitry to control the laser diode and
    modulation function of the transmitter as well as the receiver
    electronics. We supply a small form factor tunable transponder
    at 10 Gb/s and are in the process of qualifying what we believe
    to be a unique 40 Gb/s transponder with significant cost
    advantages, potentially contributing to the acceleration of 40
    Gb/s deployment, with cost savings arising due to the
    integration of Oclaro component level products, and based on a
    DQPSK modulation scheme which we also believe represents a
    differentiator and a competitive advantage.  Regeneration
    and Optical Routing Products for the Telecom
    Market
  
    Pump laser chips.  Our 980 nanometer (nm) pump
    laser diodes are designed for use as high-power, reliable pump
    sources for erbium doped fiber amplifiers, or EDFAs, in
    terrestrial and undersea, or submarine, applications. Uncooled
    modules are designed for low-cost, reliable amplification for
    metro, cross-connect or other single/multi channel amplification
    applications, and submarine applications.
    Thin Film Filters.  Our thin film filter, or
    TFF, products are used for multiplexing and demultiplexing
    optical signals within dense wave division multiplexing, or WDM
    transmission systems. In addition to this, TFF products are used
    to attenuate and control light within our amplifier product
    range.
    Amplifiers.  EDFAs are used to boost the
    brightness of optical signals and offer compact amplification
    for ultra long-haul, long-haul and metro networks. We offer a
    semi-custom product portfolio of multi-wavelength amplifiers
    from gain blocks to full card level or subsystem solutions
    designed for use in wide bandwidth WDM, optical transmission
    systems. We also offer lower cost narrow band
    mini-amplifiers.
    980 nm pump laser diodes are a key component of these
    products and they are mostly sourced internally from our own
    wafer fabrication facilities.
    Wavelength Management.  Our wavelength
    management products include switching and routing solutions,
    multiplexing and signal processing solutions and micro-optics
    and integrated modules, including products that optically add
    and drop transmission signals in both fixed and reconfigurable
    versions, including ROADMs, products that optically multiplex or
    demultiplex signals based on thin film filters, planar and
    interleaver technologies, and products that optically attenuate
    signal power across a single or multiple wavelength bands.
    Dispersion Compensation Management.  Our
    dispersion compensation product family consists of products that
    optically compensate for chromatic dispersion and dispersion
    degradation of transmission signals, including fixed and tunable
    products based on dispersion compensating fiber and cascaded
    etalons.  Advanced
    Photonic Solutions Products
  
    High Powered Laser Diode Products.  We market
    advanced pump laser technology diodes for material processing
    and printing applications. On July 4, 2009 we completed the
    acquisition of the laser diode business of Newport, and this
    acquisition will expand our high-powered laser diode product
    offering into additional industrial and medical applications.
    Thin Film Filter Products.  We deploy our
    optical TFF technology to markets outside of telecommunications,
    with applications available in the life sciences, biotechnology
    and consumer display industries.
    VCSEL Products.  We sell low-power polarized
    products for mouse and data communications applications.
    Photonics and Microwave Products.  Prior to the
    July 4, 2009 divestiture of our New Focus business to
    Newport, we sold advanced photonic tools principally used for
    generating, measuring, moving, manipulating, modulating and
    detecting optical signals, as well as tunable lasers for test
    and measurement applications, to diversified markets such as
    research institutions and semiconductor capital equipment
    manufacturers. 7




---



##### Table of Contents



Customers,
    Sales and Marketing
      Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Net revenues:Telecom

$
188,492


$
176,856


$
153,823Advanced photonics solutions


22,431



25,807



17,360Consolidated net revenues

$
210,923


$
202,663


$
171,183   Form 10-K.
             8




---



##### Table of Contents



Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)United States

$
42,776


$
36,209


$
26,173Canada


14,596



39,050



56,092Europe:United Kingdom


10,921



8,134



5,035Other


42,315



35,596



25,495Asia:China


65,508



58,413



37,239Other


21,443



17,683



17,759Rest of world


13,364



7,578



3,390$
210,923


$
202,663


$
171,183   Form 10-K,
  Manufacturing
    3-inch
 9




---



##### Table of Contents



Research
    and Development
        Intellectual
    Property
   10




---



##### Table of Contents



246 non-U.S. patents,
      Our products may infringe the intellectual property
    rights of others which could result in expensive litigation or
    require us to obtain a license to use the technology from third
    parties, or we may be prohibited from selling certain products
    in the future Form 10-K.
  and/or
  Competition
     11




---



##### Table of Contents



Long-Lived
    Tangible Assets and Total Assets
    Long-Lived Tangible Assets


Total AssetsJune 27,


June 28,


June 27,


June 28,2009


2008


2009


2008(Thousands)United States

$
2,252


$
1,149


$
94,539


$
65,237Canada


185



304



363



751Europe:United Kingdom


3,104



6,296



52,861



61,350Other


4,286



4,094



28,204



28,477Asia:China


19,996



20,443



55,130



56,273Other


52







2,291



2$
29,875


$
32,286


$
233,388


$
212,090   Employees
    Item 1A.
    Risk
    Factors  Investing in our securities involves a high degree of risk.
    You should carefully consider the risks and uncertainties
    described below in addition to the other information included or
    incorporated by reference in this Annual Report on
    Form 10-K.
    If any of the following risks actually occur, our business,
    financial condition or results of operations would likely
    suffer. In that case, the trading price of our common stock
    could fall.
  Risks
    Related to Our Business
  We
    have a history of large operating losses and we may not be able
    to achieve profitability in the future.
   12




---



##### Table of Contents



The
    combined company may not achieve strategic objectives,
    anticipated synergies and cost savings and other expected
    benefits of the merger with Avanex or the acquisition of the
    high power laser diodes business of Newport.
      
    the inability to increase product sales;
    substantial demands on our management as a result of these
    transactions that may limit their time to attend to other
    operational, financial and strategic issues;
    difficulty in:  
    the integration of operational, financial and administrative
    functions and systems to permit effective management, and the
    lack of control if such integration is not implemented or
    delayed;
    demonstrating to our customers that the merger and acquisition
    will not result in adverse changes in client service standards
    or business focus and helping customers conduct business easily
    with the combined company;
    consolidating and rationalizing corporate information
    technology, engineering and administrative infrastructures;
    integrating product offerings;
    coordinating sales and marketing efforts to effectively
    communicate the capabilities of the combined company;
    coordinating and integrating the manufacturing activities of the
    three businesses, including with respect to third party
    manufacturers;
    coordinating and integrating the supply chains;
    coordinating and rationalizing research and development
    activities to enhance introduction of new products and
    technologies with reduced cost;
    preserving important relationships of the businesses and
    resolving potential conflicts between business cultures;
    coordinating the international activities of the three
    businesses;  
    unexpected liabilities associated with the acquired businesses
    or unanticipated costs related to the integration;
    tax law due to increasing complexities of our global operating
    structure; and
    employment law or regulations or other limitations in foreign
    jurisdictions that could have an impact on timing, amounts or
    costs of achieving expected synergies.   13




---



##### Table of Contents



We may
    not be able to maintain current levels of gross
    margins.
    Our
    business and results of operations may be negatively impacted by
    general economic and financial market conditions and such
    conditions may increase the other risks that affect our
    business.
       14




---



##### Table of Contents



Our
    success will depend on our ability to anticipate and respond to
    evolving technologies and customer requirements.
    The
    market for optical components continues to be characterized by
    excess capacity and intense price competition which has had, and
    will continue to have, a material adverse effect on our results
    of operations.
    We
    depend on a limited number of customers for a significant
    percentage of our revenues.
    We and
    our telecom customers depend upon a limited number of major
    telecommunications carriers.
    We
    typically do not enter into long-term contracts with our
    customers and our customers may decrease, cancel or delay their
    buying levels at any time with little or no advance notice to
    us.
   15




---



##### Table of Contents



As a
    result of our global operations, our business is subject to
    currency fluctuations that have adversely affected our results
    of operations in recent quarters and may continue to do so in
    the future.
  and/or
    We
    have significant manufacturing operations in China, which
    exposes us to risks inherent in doing business in
    China.
  chip-on-carrier
  
    qualify our manufacturing lines and the products we produce in
    Shenzhen, as required by our customers;
    attract qualified personnel to operate our Shenzhen
    facility; and
    retain employees at our Shenzhen facility.         16




---



##### Table of Contents



Fluctuations
    in operating results could adversely affect the market price of
    our common stock.
    quarter-to-quarter
  The
    investment of our cash balances and our investments in
    marketable debt securities are subject to risks which may cause
    losses and affect the liquidity of these
    investments.
  sub-prime U.S. sub-prime
    other-than-temporary.
 17




---



##### Table of Contents



We may
    record impairment charges which would adversely impact our
    results of operations.
  Goodwill and Other
    Intangibles
      We may
    incur additional significant restructuring charges that will
    adversely affect our results of operations.
      Our
    results of operations may suffer if we do not effectively manage
    our inventory, and we may incur inventory-related
    charges.
    Oclaro
    Technology plc may not be able to utilize tax losses and other
    tax attributes against the receivables that arise as a result of
    its transaction with Deutsche Bank.
   18




---



##### Table of Contents



sub-lease
  Our
    products are complex and may take longer to develop than
    anticipated and we may not recognize revenues from new products
    until after long field testing and customer acceptance
    periods.
    If our
    customers do not qualify our manufacturing lines or the
    manufacturing lines of our subcontractors for volume shipments,
    our operating results could suffer.
    Delays,
    disruptions or quality control problems in manufacturing could
    result in delays in product shipments to customers and could
    adversely affect our business.
   19




---



##### Table of Contents



We may
    experience low manufacturing yields.
    We
    depend on a limited number of suppliers who could disrupt our
    business if they stopped, decreased or delayed
    shipments.
      Our
    intellectual property rights may not be adequately
    protected.
     20




---



##### Table of Contents



chip-on-carrier
  Our
    products may infringe the intellectual property rights of others
    which could result in expensive litigation or require us to
    obtain a license to use the technology from third parties, or we
    may be prohibited from selling certain products in the
    future.
    Bookham, Inc. v. JDS
    Uniphase Corp. and Agility Communications, Inc. No. 5:08-CV-01275-RMW,
  tm patents-in-suit.
  No. 337-TA-662
  patents-in-suit,
 21




---



##### Table of Contents



QinetiQ Limited v. Oclaro, Inc No. 1:09-cv-00372, patents-in-suit
    If we
    fail to obtain the right to use the intellectual property rights
    of others necessary to operate our business, our ability to
    succeed will be adversely affected.
   22




---



##### Table of Contents



The
    markets in which we operate are highly competitive, which could
    result in lost sales and lower revenues.
    
    respond to new technologies or technical standards;
    react to changing customer requirements and expectations;
    devote needed resources to the development, production,
    promotion and sale of products; and
    deliver competitive products at lower prices.      We
    generate a significant portion of our revenues internationally
    and therefore are subject to additional risks associated with
    the extent of our international operations.
    
    currency fluctuations, which could result in increased operating
    expenses and reduced revenues;
    greater difficulty in accounts receivable collection and longer
    collection periods;
    difficulty in enforcing or adequately protecting our
    intellectual property;
    foreign taxes;
    political, legal and economic instability in foreign
    markets; and
    foreign regulations.    We may
    be faced with product liability claims.
   23




---



##### Table of Contents



If we
    fail to attract and retain key personnel, our business could
    suffer.
        We may
    not be able to raise capital when desired on favorable terms, or
    at all, or without dilution to our stockholders.
        Sales
    of our products could decline if customer relationships are
    disrupted by the merger with Avanex or acquisition of the high
    power laser diodes business of Newport.
   24




---



##### Table of Contents



As a
    result of the merger, we will be a larger and more
    geographically diverse organization, and if our management is
    unable to manage the combined organization efficiently, our
    operating results will suffer.
    Oclaro
    may not successfully transfer the Tucson, Arizona manufacturing
    operations acquired from Newport to its European fabrication
    facilities and realize the anticipated benefits of the
    acquisition.
    
    transferring operations will place substantial demands on our
    management that may limit their time to attend to other
    operational, financial and strategic issues;
    it may take longer than anticipated to transfer manufacturing
    operations from Tucson, Arizona to our European fabs, the
    results may not deliver desired yields and costs savings and any
    delay may cause us not to achieve expected synergies from
    leveraging our existing global manufacturing infrastructure;
    the costs of transferring manufacturing operations from Tucson,
    Arizona to our European fabs may exceed our current estimates;
    delays in qualifying production of the laser diodes in our
    European fabs could cause disruption to our customers and have
    an adverse impact on our operating results;
    we may experience difficulty in the integration of operational,
    financial and administrative functions and systems to permit
    effective management, and may experience a lack of control if
    such integration is not implemented or delayed; and
    employment law or regulations or other limitations in foreign
    jurisdictions could have an impact on timing, amounts or costs
    of achieving expected synergies.  Risks
    Related to Regulatory Compliance and Litigation
  Our
    business involves the use of hazardous materials, and we are
    subject to environmental and
    import/export
    laws and regulations that may expose us to liability and
    increase our costs.
   25




---



##### Table of Contents



Avanex
    previously experienced material weaknesses in its internal
    controls over financial reporting. A lack of effective internal
    control over financial reporting by the combined company could
    result in an inability to report our financial results
    accurately, which could lead to a loss of investor confidence in
    our financial reports and have an adverse effect on our stock
    price.
      Litigation
    regarding, among other things, Bookham Technology plcs and
    New Focus initial public offering and follow-on offerings
    and any other litigation in which we become involved, including
    as a result of acquisitions or the arrangements we have with
    suppliers and customers, may substantially increase our costs
    and harm our business.
  In re
    New Focus, Inc. Initial Public Offering Securities
    Litigation
  In re
    Initial Public Offering Securities Litigation
 26




---



##### Table of Contents



Our products may infringe the intellectual property rights of
    others which could result in expensive litigation or require us
    to obtain a license to use the technology from third parties, or
    we may be prohibited from selling certain products in the
    future.
    Some
    anti-takeover provisions contained in our charter, by-laws and
    under Delaware law could hinder business combinations with third
    parties.
   27




---



##### Table of Contents



time-to-time
  Risks
    Related to Our Common Stock
  A
    variety of factors could cause the trading price of our common
    stock to be volatile or to decline and we may incur significant
    costs from class action litigation due to our expected stock
    volatility.
    
    fluctuations in our results of operations;
    changes in our business, operations or prospects;
    hiring or departure of key personnel;
    new contractual relationships with key suppliers or customers by
    us or our competitors;
    proposed acquisitions by us or our competitors;
    financial results that fail to meet public market analysts
    expectations and changes in stock market analysts
    recommendations regarding us, other optical technology companies
    or the telecommunication industry in general;
    future sales of common stock, or securities convertible into or
    exercisable for common stock;
    adverse judgments or settlements obligating us to pay damages;
    acts of war, terrorism, or natural disasters;
    industry, domestic and international market and economic
    conditions, including the global macroeconomic downturn we are
    currently experiencing;
    low trading volume in our stock;
    developments relating to patents or property rights; and
    government regulatory changes.     28




---



##### Table of Contents



If we
    do not meet the NASDAQ Global Market (NASDAQ) continued listing
    requirements, our common stock may be delisted.
      one-for-five one-for-thirty.
  Because
    we do not intend to pay dividends, stockholders will benefit
    from an investment in our common stock only if it appreciates in
    value.
    We can
    issue shares of preferred stock that may adversely affect your
    rights as a stockholder of our common stock.
  time-to-time
  
    adversely affect the voting power of the holders of our common
    stock;
    make it more difficult for a third party to gain control of us;
    discourage bids for our common stock at a premium;
    limit or eliminate any payments that the holders of our common
    stock could expect to receive upon our liquidation; or
    otherwise adversely affect the market price of our common stock. 29




---



##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    LeaseLocation

Square Feet

Principal Use

Ownership

ExpirationSan Jose, California


52,000


Corporate headquarters, office space, manufacturing, research
    and development

Lease

March 2011Shenzhen, China


247,000


Office space, manufacturing, research and development

Own

Not ApplicableCaswell, United Kingdom


183,000


Office space, manufacturing, research and development

Lease

March 2026Zurich, Switzerland


124,000


Manufacturing, research and development

Lease

June 2012San Donato, Italy


66,000


Office space, manufacturing, research and development

Lease

June 2011Santa Rosa, California


33,000


Office space, manufacturing, research and development

Lease

December 2011           Item 3.
    Legal
    Proceedings  In re New Focus, Inc.
    Initial Public Offering Securities Litigation
 30




---



##### Table of Contents



In re
    Initial Public Offering Securities Litigation
      Bookham, Inc. v. JDS Uniphase Corp.
    and Agility Communications, Inc. No. 5:08-CV-01275-RMW,
  tm patents-in-suit.
  No. 337-TA-662
   31




---



##### Table of Contents



patents-in-suit,
    QinetiQ Limited v. Oclaro, Inc No. 1:09-cv-00372, patents-in-suit
  Form 8-K Form 8-K Form 8-K
   32




---



##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders      For

Against

Abstain60,378,009



620,176



2,031,698     For

Against

Abstain59,841,110



1,137,734



2,051,039     For

Against

Abstain59,663,123



1,328,797



2,037,963     For

Against

Abstain55,732,542



5,121,585



2,175,648  33




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information and Holders
    Price per Share of Common StockHigh

LowQuarter EndedSeptember 29, 2007

$
3.05


$
2.22December 29, 2007

$
3.39


$
2.22March 29, 2008

$
2.63


$
1.13June 28, 2008

$
2.28


$
1.31September 27, 2008

$
2.02


$
1.12December 27, 2008

$
1.24


$
0.30March 28, 2009

$
0.56


$
0.21June 27, 2009

$
1.30


$
0.41     Dividends
   34




---



##### Table of Contents



Comparison
    of Stockholder Return
    Comparison
    of Five-Year Cumulative Total Return*
    Among Oclaro, Inc., the NASDAQ Composite Index
    and the NASDAQ Telecommunications Index
  
  June 30,2004

2005

2006

2007

2008

2009Oclaro, Inc.

$
100.00


$
33.02


$
35.00


$
23.44


$
17.60


$
6.64NASDAQ Composite Index

$
100.00


$
101.09


$
109.49


$
132.47


$
117.33


$
92.91NASDAQ Telecommunications Index

$
100.00


$
89.75


$
98.00


$
131.30


$
112.36


$
92.10     *
    
    Assumes that $100.00 was invested in Oclaro common stock and in
    each index at market closing prices on June 30, 2004, and
    that all dividends were reinvested. No cash dividends have been
    declared on our common stock. Stockholder returns over the
    indicated period should not be considered indicative of future
    stockholder returns. 35




---



##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K.
  Form 10-K. Form 10-K,
  Consolidated
    Statements of Operations Data
  Year EndedJune 27,


June 28,


June 30,


July 1,


July 2,2009


2008


2007


2006


2005(Thousands, except per share data)Net revenues

$
210,923


$
202,663


$
171,183


$
206,037


$
176,606Operating loss

$
(34,811
)

$
(29,894
)

$
(79,871
)

$
(69,605
)

$
(236,827
)Loss from continuing operations

$
(25,769
)

$
(23,261
)

$
(82,450
)

$
(80,018
)

$
(241,372
)Income (loss) from discontinued operations

$
(6,387
)

$
(179
)

$
275


$
(7,479
)

$
(6,600
)Net loss

$
(32,156
)

$
(23,440
)

$
(82,175
)

$
(87,497
)

$
(247,972
)Loss from continuing operations per common share (basic and
    diluted)

$
(0.22
)

$
(0.25
)

$
(1.17
)

$
(1.71
)

$
(7.23
)Weighted average of shares of common stock outstanding (basic
    and diluted)


114,844



93,099



70,336



46,679



33,379   Consolidated
    Balance Sheet Data
  June 27,

June 28,

June 30,

July 1,

July 2,2009

2008

2007

2006

2005(Thousands)Total assets

$
233,388


$
212,090


$
204,526


$
236,797


$
238,578Total stockholders equity

$
140,390


$
149,062


$
120,967


$
135,141


$
91,068Long-term obligations

$
4,923


$
1,336


$
1,908


$
5,337


$
76,925     Form 10-K.
   36




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K, Form 10-K Form 10-K, Form 10-K.
  Overview
    Form 10-K
  Business Combinations
   37




---



##### Table of Contents



PurchasePrice Allocation(Thousands)Cash, cash equivalents, short-term investments and restricted
    cash

$
25,746Accounts receivable


22,933Inventories


13,703Prepaid expenses and other current assets


6,802Property and equipment


1,432Other non-current assets


3,245Accounts payable


(15,568
)Accrued expenses and other liabilities


(17,687
)Other long-term liabilities


(4,377
)Total purchase price

$
36,229   state-of-the
  Recent
    Accounting Pronouncements
  The FASB Accounting Standards Codification and the Hierarchy
    of Generally Accepted Accounting Principles  a
    Replacement of FASB Statement No. 162
    (Codification) Form 10-Q
  SFAS No. 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments SFAS No. 107-1 28-1 SFAS No. 107-1 28-1
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets SFAS No. 142-3 Goodwill and Other Intangible
    Assets SFAS No. 142-3 Business
    Combinations SFAS No. 142-3
 38




---



##### Table of Contents



SFAS No. 157-2, Effective Date of FASB Statement No. 157 SFAS No. 157-2
  Business Combinations SFAS No. 141R-1, Accounting for Assets Acquired and Liabilities Assumed in a
    Business Combination That Arise from Contingencies SFAS No. 141R-1 SFAS No. 141R-1
  Application
    of Critical Accounting Policies
  Form 10-K,
    
    the nature of the estimate or assumption is material due to the
    level of subjectivity and judgment necessary to account for
    highly uncertain matters or the susceptibility of such matters
    to change; and
    the impact of such estimates and assumptions on our financial
    condition or operating performance is material.  Form 10-K.
  Revenue
    Recognition and Sales Returns
  Revenue Recognition
    in Financial Statements
 39




---



##### Table of Contents



Inventory
    Valuation
    Accounting
    for Acquisitions and Goodwill
     40




---



##### Table of Contents



Impairment
    of Goodwill and Other Intangible Assets
          Accounting for the Impairment or
    Disposal of Long-Lived Assets
 41




---



##### Table of Contents



Accounting
    for Share-Based Payments
  Share-Based Payment Form 10-K
  Results
    of Operations
  Accounting for the Impairment or
    Disposal of Long-Lived Assets
  Fiscal
    Years Ended June 27, 2009 and June 28,
    2008
  year-over-year
  Year Ended





IncreaseJune 27, 2009


June 28, 2008


Change


(Decrease)(Thousands)


%


(Thousands)


%


(Thousands)


%Net revenues

$
210,923



100.0


$
202,663



100.0


$
8,260



4.1Cost of revenues


164,425



78.0



161,902



79.9



2,523



1.6Gross profit


46,498



22.0



40,761



20.1



5,737



14.1Operating expenses:Research and development


26,147



12.4



28,608



14.1



(2,461
)


(8.6
)Selling, general and administrative


34,899



16.6



40,948



20.2



(6,049
)


(14.8
)Amortization of intangible assets


487



0.2



3,510



1.8



(3,023
)


(86.1
)Restructuring and severance charges


6,826



3.2



3,033



1.5



3,793



125.1Legal settlements


3,829



1.8



(2,882
)


(1.4
)


6,711



n/m
(1)Impairment of goodwill and other intangible assets


9,133



4.3











9,133



n/m
(1)Gain on sale of property and equipment


(12
)






(2,562
)


(1.3
)


2,550



(99.5
)Total operating expenses


81,309



38.5



70,655



34.9



10,654



15.1 42




---



##### Table of Contents



Year Ended





IncreaseJune 27, 2009


June 28, 2008


Change


(Decrease)(Thousands)


%


(Thousands)


%


(Thousands)


%Operating loss


(34,811
)


(16.5
)


(29,894
)


(14.8
)


(4,917
)


16.4Other income (expense):Interest income


575



0.3



1,261



0.6



(686
)


(54.4
)Interest expense


(543
)


(0.3
)


(682
)


(0.3
)


139



(20.4
)Gain on foreign exchange


11,094



5.3



6,059



3.0



5,035



83.1Other expense


(685
)


(0.3
)










(685
)


n/m
(1)Total other income (expense)


10,441



5.0



6,638



3.3



3,803



57.3Loss from continuing operations before income taxes


(24,370
)


(11.5
)


(23,256
)


(11.5
)


(1,114
)


4.8Income tax provision


1,399



0.7



5







1,394



n/m
(1)Loss from continuing operations


(25,769
)


(12.2
)


(23,261
)


(11.5
)


(2,508
)


10.8Loss from discontinued operations, net of tax


(6,387
)


(3.0
)


(179
)


(0.1
)


(6,208
)


3,468.2Net loss

$
(32,156
)


(15.2
)

$
(23,440
)


(11.6
)

$
(8,716
)


37.2     (1)
    
    Not meaningful  Net Revenues. Form 10-K,
  Cost of Revenues.
  Form 10-K,
  Gross Profit.
 43




---



##### Table of Contents



Research and Development Expenses.
    Selling, General and Administrative
    Expenses.
    Amortization of Intangible Assets.
  Restructuring and Severance Charges. and/or
     44




---



##### Table of Contents



Legal Settlements. Legal Proceedings Form 10-K.
    Impairment of Goodwill and Other Intangible
    Assets. ,
  Gain on Sale of Property and Equipment.
  Other Income (Expense).
      Income Tax Provision.
 45




---



##### Table of Contents



Fiscal
    Years Ended June 28, 2008 and June 30,
    2007
  year-over-year
  Year Ended





IncreaseJune 28, 2008


June 30, 2007


Change


(Decrease)(Thousands)


%


(Thousands)


%


(Thousands)


%Net revenues

$
202,663



100.0


$
171,183



100.0


$
31,480



18.4Cost of revenues


161,902



79.9



154,700



90.4



7,202



4.7Gross profit


40,761



20.1



16,483



9.6



24,278



147.3Operating expenses:Research and development


28,608



14.1



39,127



22.9



(10,519
)


(26.9
)Selling, general and administrative


40,948



20.2



40,582



23.7



366



0.9Amortization of intangible assets


3,510



1.8



7,712



4.5



(4,202
)


(54.5
)Restructuring and severance charges


3,033



1.5



10,230



6.0



(7,197
)


(70.4
)Legal settlements


(2,882
)


(1.4
)










(2,882
)


n/m
(1)Impairment of other long-lived assets










1,621



0.9



(1,621
)


n/m
(1)Gain on sale of property and equipment


(2,562
)


(1.3
)


(2,918
)


(1.7
)


356



(12.2
)Total operating expenses


70,655



34.9



96,354



56.3



(25,699
)


(26.7
)Operating loss


(29,894
)


(14.8
)


(79,871
)


(46.7
)


49,977



(62.6
)Other income (expense):Interest income


1,261



0.6



987



0.6



274



27.8Interest expense


(682
)


(0.3
)


(579
)


(0.3
)


(103
)


17.8Gain (loss) on foreign exchange


6,059



3.0



(2,878
)


(1.7
)


8,937



n/m
(1)Total other income (expense)


6,638



3.3



(2,470
)


(1.4
)


9,108



n/m
(1)Loss from continuing operations before income taxes


(23,256
)


(11.5
)


(82,341
)


(48.1
)


59,085



(71.8
)Income tax provision


5







109



0.1



(104
)


(95.4
)Loss from continuing operations

$
(23,261
)


(11.5
)

$
(82,450
)


(48.2
)

$
59,189



(71.8
)Income (loss) from discontinued operations, net of tax


(179
)


(0.1
)


275



0.2



(454
)


n/m
(1)Net loss

$
(23,440
)


(11.6
)

$
(82,175
)


(48.0
)

$
58,735



(71.5
)     (1)
    
    Not meaningful  Net revenues.
   46




---



##### Table of Contents



Cost of Revenues. Form 10-K.
  Gross Profit. Form 10-K.
  Research and Development Expenses.
  Selling, General and Administrative
    Expenses.
  Amortization of Intangible Assets.
  Restructuring and Severance Charges.
    chip-on-carrier
   47




---



##### Table of Contents



Legal Settlements.
  Impairment of Other Long-Lived Assets.
  Gain on Sale of Property and Equipment.
  Other Income (Expense).
  Income Tax Provision.
  Discontinued
    Operations
  year-over-year
  Year Ended


Year EndedJune 27,


June 28,





June 28,


June 30,2009


2008


Change


2008


2007


Change(Thousands)


(Thousands)Revenues

$
24,829


$
32,828


$
(7,999
)

$
32,828


$
31,631


$
1,197Cost of revenues


17,113



20,616



(3,503
)


20,616



18,793



1,823Gross profit


7,716



12,212



(4,496
)


12,212



12,838



(626
)Gross margin rate


31.1
%


37.2
%






37.2
%


40.6
%Operating expenses


14,106



12,585



1,521



12,585



12,824



(239
)Other income (expense), net


53



194



(141
)


194



257



(63
)Income (loss) from discontinued operations before income taxes


(6,337
)


(179
)


(6,158
)


(179
)


271



(450
)Income tax provision (benefit)


50







50







(4
)


4Net income (loss) from discontinued operations

$
(6,387
)

$
(179
)

$
(6,208
)

$
(179
)

$
275


$
(454
)  48




---



##### Table of Contents



Revenues.
  Cost of Revenues.
  Gross Profit.
  Operating Expenses.
  Income Tax Provision.
  Liquidity
    and Capital Resources
  Cash
    flows from Operating Activities
  Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Net loss

$
(32,156
)

$
(23,440
)

$
(82,175
)Non-cash adjustments:Depreciation and amortization


12,491



16,869



23,167Stock-based compensation


4,436



8,812



6,666Amortization of deferred gain on sale-leaseback


(938
)


(1,384
)


(1,435
)Impairment of short-term investments


706







Impairment of goodwill and other intangible assets


11,915







Impairment of other long-lived assets










1,621Accretion on short-term investments


(100
)


(145
)


Gain on sale of property and equipment


(8
)


(2,562
)


(3,009
)Total non-cash adjustments


28,502



21,590



27,010Change in operating assets and liabilities


525



(14,300
)


(15,608
)Net cash used in operating activities

$
(3,129
)

$
(16,150
)

$
(70,773
)    49




---



##### Table of Contents



Cash
    flows from Investing Activities
  available-for-sale available-for-sale
  available-for-sale available-for-sale
      Cash
    Flows from Financing Activities
     50




---



##### Table of Contents



Effect
    of Exchange Rates on Cash and Cash Equivalents for the Years
    Ended June 27, 2009 and
    June 28, 2008
      Credit
    Facility
     51




---



##### Table of Contents



90-day
        Future
    Cash Requirements
  and/or
 52




---



##### Table of Contents



and/or
  Risk
    Management  Foreign Currency Risk
    Contractual
    Obligations
    Operating


Sublease


Purchase


Long-TermLeases


Income


Obligations


Obligations(Thousands)2010

$
10,465


$
(916
)

$
22,733


$
542011


7,126



(187
)






542012


4,686



(33
)






542013


2,579











132014


2,515











Thereafter


29,577











$
56,948


$
(1,136
)

$
22,733


$
175    53




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
        Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest
    rates
      Foreign
    currency
     54




---



##### Table of Contents



Hedging
    Program
    Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  (a)
    Evaluation
    of Disclosure Controls and Procedures  Rules 13a-15(e) 15d-15(e)
  Rules 13a-15(f) 15d-15(f)
  (b)
    Managements
    Report on Internal Control Over Financial Reporting  Rule 13a-15(f).
 55




---



##### Table of Contents



(c)
    Changes
    in Internal Control over Financial Reporting    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Non-Director
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   56




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Form 10-K:
    page F-1 10-K.
    Form 10-K.
    Form 10-K,
 57




---



##### Table of Contents



SIGNATURES       September 4, 2009

By:

/s/  Alain
    CouderAlain CouderChief Executive Officer, President and Director     Signature

Title

Date/s/  Alain
    CouderAlain
    Couder

Chief Executive Officer, President and Director
    (Principal Executive Officer)

September 4, 2009/s/  Jerry
    TurinJerry
    Turin

Chief Financial Officer
    (Principal Financial and Accounting Officer)

September 4, 2009/s/  Bernard
    J. CouillaudBernard
    J. Couillaud

Chairman of the Board and Director

September 4, 2009/s/  Giovanni
    BarbarossaGiovanni
    Barbarossa

Director

September 4, 2009/s/  Edward
    B. CollinsEdward
    B. Collins

Director

September 4, 2009/s/  Greg
    DoughertyGreg
    Dougherty

Director

September 4, 2009/s/  Lori
    HollandLori
    Holland

Director

September 4, 2009/s/  Joel
    Smith IIIJoel
    Smith III

Director

September 4, 2009  58




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReports of Independent Registered Public
    Accounting Firms

F-2Consolidated Balance Sheets

F-4Consolidated Statements of Operations

F-5Consolidated Statements of Cash Flows

F-6Consolidated Statements of Stockholders
    Equity and Comprehensive Loss

F-7Notes to Consolidated Financial Statements

F-8   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             /s/  ERNST &
    YOUNG LLP
     F-3




---



##### Table of Contents



OCLARO,
    INC.
  CONSOLIDATED BALANCE SHEETS
  June 27, 2009


June 28, 2008(Thousands, except par value)ASSETSCurrent assets:Cash and cash equivalents

$
44,561


$
32,863Short-term investments


9,259



17,845Restricted cash


4,208



1,154Accounts receivable, net of allowances for doubtful accounts and
    sales returns of $623 and $277 in 2009 and $171 and $188 in 2008


58,483



41,445Inventories


59,527



53,708Prepaid expenses and other current assets


11,834



5,685Assets held for sale


10,442



11,122Total current assets


198,314



163,822Goodwill






7,881Other intangible assets, net


1,951



7,829Property and equipment, net


29,875



32,286Other non-current assets


3,248



272Total assets

$
233,388


$
212,090LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
31,943


$
19,053Accrued expenses and other liabilities


39,016



20,044Liabilities held for sale


2,028



3,193Total current liabilities


72,987



42,290Deferred gain on sale-leaseback


15,088



19,402Other long-term liabilities


4,923



1,336Total liabilities


92,998



63,028Commitments and contingencies (Note 11)Stockholders equity:Preferred stock: 5,000 shares authorized; none issued and
    outstanding






Common stock: $0.01 par value per share;
    450,000 shares authorized; 186,164 and 100,740 shares
    issued and outstanding at June 27, 2009 and June 28,
    2008, respectively


1,862



1,007Additional paid-in capital


1,199,358



1,163,598Accumulated other comprehensive income


30,905



44,036Accumulated deficit


(1,091,735
)


(1,059,579
)Total stockholders equity


140,390



149,062Total liabilities and stockholders equity

$
233,388


$
212,090    F-4




---



##### Table of Contents



OCLARO,
    INC.CONSOLIDATED STATEMENTS OF OPERATIONS
  Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands, except per share amounts)Revenues

$
210,923


$
202,663


$
131,310Revenues from related party










39,873Net revenues


210,923



202,663



171,183Cost of revenues


164,425



161,902



154,700Gross profit


46,498



40,761



16,483Operating expenses:Research and development


26,147



28,608



39,127Selling, general and administrative


34,899



40,948



40,582Amortization of intangible assets


487



3,510



7,712Restructuring and severance charges


6,826



3,033



10,230Legal settlements


3,829



(2,882
)


Impairment of goodwill and other intangible assets


9,133







Impairment of other long-lived assets










1,621Gain on sale of property and equipment


(12
)


(2,562
)


(2,918
)Total operating expenses


81,309



70,655



96,354Operating loss


(34,811
)


(29,894
)


(79,871
)Other income (expense):Interest income


575



1,261



987Interest expense


(543
)


(682
)


(579
)Gain (loss) on foreign exchange


11,094



6,059



(2,878
)Other expense


(685
)






Total other income (expense)


10,441



6,638



(2,470
)Loss from continuing operations before income taxes


(24,370
)


(23,256
)


(82,341
)Income tax provision


1,399



5



109Loss from continuing operations


(25,769
)


(23,261
)


(82,450
)Income (loss) from discontinued operations, net of tax


(6,387
)


(179
)


275Net loss

$
(32,156
)

$
(23,440
)

$
(82,175
)Basic and diluted net loss per share:Net loss per share from continuing operations

$
(0.22
)

$
(0.25
)

$
(1.17
)Net loss per share from discontinued operations


(0.06
)






Net loss per share

$
(0.28
)

$
(0.25
)

$
(1.17
)Shares used in computing net loss per share:Basic and diluted


114,844



93,099



70,336    F-5




---



##### Table of Contents



OCLARO,
    INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Cash flows from operating activities:Net loss

$
(32,156
)

$
(23,440
)

$
(82,175
)Adjustments to reconcile net loss to net cash used in operating
    activities:Accretion on short-term investments


(100
)


(145
)


Amortization of deferred gain on sale-leaseback


(938
)


(1,384
)


(1,435
)Depreciation and amortization


12,491



16,869



23,167Gain on sale of property and equipment


(8
)


(2,562
)


(3,009
)Impairment of goodwill and other intangible assets


11,915







Impairment of other long-lived assets










1,621Impairment of short-term investments


706







Stock-based compensation


4,436



8,812



6,666Changes in operating assets and liabilities:Accounts receivable, net


(821
)


(11,930
)


2,514Inventories


6,859



(2,426
)


4,298Prepaid expenses and other current assets


533



4,056



2,953Other non-current assets


204



22



126Accounts payable


(5,573
)


(1,211
)


(6,275
)Accrued expenses and other liabilities


(677
)


(2,811
)


(19,224
)Net cash used in operating activities


(3,129
)


(16,150
)


(70,773
)Cash flows from investing activities:Purchases of property and equipment


(9,231
)


(9,135
)


(6,433
)Proceeds from sales of property and equipment


32



2,972



5,387Proceeds from sale of land held for resale










9,402Purchases of
    available-for-sale
    investments


(6,945
)


(22,699
)


Sales and maturities of
    available-for-sale
    investments


29,200



5,000



Transfer (to) from restricted cash


(3,109
)


5,026



(427
)Cash acquired from merger with Avanex


11,482







Net cash provided by (used in) investing activities


21,429



(18,836
)


7,929Cash flows from financing activities:Proceeds from issuance of common stock, net


4



40,785



55,444Proceeds from bank loan payable






2,501



3,812Repayment of bank loan payable






(6,313
)


Repayment of other loans


(62
)


(44
)


(108
)Amount paid to repurchase shares from a former officer






(2
)


Net cash provided by (used in) financing activities


(58
)


36,927



59,148Effect of exchange rate on cash and cash equivalents


(6,544
)


(5,709
)


2,577Net increase (decrease) in cash and cash equivalents


11,698



(3,768
)


(1,119
)Cash and cash equivalents at beginning of period


32,863



36,631



37,750Cash and cash equivalents at end of period

$
44,561


$
32,863


$
36,631Supplemental disclosures of cash flow information:Cash paid for interest

$
220


$
244


$
5,012Cash paid for income taxes

$
177


$
52


$
105Supplemental disclosures of non-cash transactions:Warrants issued in connection with debt and extinguishment of
    debt

$



$



$
12,417Issuance of common stock, stock options, restricted stock and
    warrants in merger with Avanex

$
32,347


$



$
    F-6




---



##### Table of Contents



OCLARO,
    INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY AND COMPREHENSIVE LOSS
  AccumulatedAdditional


OtherCommon Stock


Paid-In


Comprehensive


Accumulated


ComprehensiveShares


Amount


Capital


Income


Deficit


Loss


Total(Thousands)Balance at July 1, 2006


57,979


$
580


$
1,053,626


$
35,460


$
(954,525
)

$



$
135,141Issuance of shares upon the exercise of common stock options


4























Issuance of shares upon vesting of restricted stock units


8























Issuance of restricted stock to non-employee directors


50























Resolution of contingent consideration in connection with the
    acquisition of Avalon










(1,000
)














(1,000
)Common stock issued in private placements


25,235



252



55,193















55,445Stock-based compensation expense










6,277















6,277Restricted stock vesting acceleration related to restructuring
    and severance charges










295















295Comprehensive loss:Unrealized loss on hedging transactions














(361
)






(361
)


(361
)Currency translation adjustment














7,345







7,345



7,345Net loss for the period


















(82,175
)


(82,175
)


(82,175
)Total comprehensive loss





















$
(75,191
)Balance at June 30, 2007


83,276


$
832


$
1,114,391


$
42,444


$
(1,036,700
)





$
120,967Issuance of shares related to share awards and restricted stock
    units


1,464



15



(15
)














Buy-back of accelerated stock options issued to former officer
    of the Company










(2
)














(2
)Adjustment to prior years taxes payable to reflect effect of
    adoption of FIN 48


















561







561Common stock issued in public offering


16,000



160



40,626















40,786Stock-based compensation expense










8,598















8,598Comprehensive loss:Unrealized loss on hedging transactions














(34
)






(34
)


(34
)Currency translation adjustment














1,615







1,615



1,615Other comprehensive income














11







11



11Net loss for the period


















(23,440
)


(23,440
)


(23,440
)Total comprehensive loss





















$
(21,848
)Balance at June 28, 2008


100,740


$
1,007


$
1,163,598


$
44,036


$
(1,059,579
)





$
149,062Issuance of shares related to share awards and restricted stock
    units


258



3



(3
)














Issuance of shares upon the exercise of common stock options


14







4















4Common stock issued in connection with the acquisition of Avanex


85,152



852



31,495















32,347Stock-based compensation expense










4,264















4,264Comprehensive loss:Unrealized loss on hedging transactions














(631
)






(631
)


(631
)Currency translation adjustment














(12,496
)






(12,496
)


(12,496
)Other comprehensive loss














(4
)






(4
)


(4
)Net loss for the period


















(32,156
)


(32,156
)


(32,156
)Total comprehensive loss





















$
(45,287
)Balance at June 27, 2009


186,164


$
1,862


$
1,199,358


$
30,905


$
(1,091,735
)





$
140,390    F-7




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Note 1.
    Organization
    and Basis of Presentation  Organization
        Basis
    of Presentation
        Reclassifications
     F-8




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 2.
    Summary
    of Significant Accounting Policies  Cash,
    Cash Equivalents and Short-Term Investments
      Concentration
    of Credit Risks
      Allowance
    for Doubtful Accounts and Sales Return Allowance
     F-9




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Inventories
  work-in-process
  Property
    and Equipment
    Goodwill
    and Other Intangible Assets
  Goodwill and Other
    Intangible Assets
    Derivative
    Financial Instruments
   F-10




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Derivative Instruments
    and Hedging Activities Disclosures about
    Derivative Instruments and Hedging Activities
  marks-to-market
  Warranty
    Revenue
    Recognition
  Revenue Recognition in Financial
    Statements
     F-11




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Research,
    Development and Engineering Expenses
    Advertising
    Expenses
    Restructuring
    Expenses
  Accounting for Costs Associated with
    Exit or Disposal Activities Restructuring and Impairment Charges.
  Impairment
    of Long-Lived Assets
    Goodwill and
    Other Intangible Assets,
  Accounting for Impairment or Disposal of Long-Lived
 F-12




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Assets
  Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock-based
    Compensation
  catch-up
    Foreign
    Currency Transactions and Translation Gains and
    Losses
    Income
    Taxes
  Accounting for Income Taxes
  Net
    Loss Per Share
   F-13




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Subsequent
    Events
  Subsequent Events Form 10-K
  Recent
    Accounting Pronouncements
    The FASB Accounting Standards Codification and the Hierarchy
    of Generally Accepted Accounting Principles  a
    Replacement of FASB Statement No. 162
    (Codification) Form 10-Q
  SFAS No. 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments SFAS No. 107-1 28-1 SFAS No. 107-1 28-1
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets SFAS No. 142-3 FSP SFAS No. 142-3 Business
    Combinations SFAS No. 142-3
  SFAS No. 157-2, Effective Date of FASB Statement No. 157 FSP SFAS No. 157-2
  Business Combinations SFAS No. 141R-1, Accounting for Assets Acquired and Liabilities Assumed in a
    Business Combination That Arise from Contingencies
 F-14




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SFAS No. 141R-1 SFAS No. 141R-1
  Note 3.
    Fair
    Value  Fair Value Measurements,
     F-15




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Assets
    and Liabilities Measured at Fair Value on a Recurring
    Basis
    Fair Value Measurement at Reporting Date UsingQuoted Prices


Significantin Active


Other


SignificantMarkets for


Observable


UnobservableIdentical Assets


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


Total(Thousands)Assets:Cash and cash equivalents(1):Money market funds

$
20,399


$



$



$
20,399Short-term investments:United States agency securities


6,669











6,669United States corporate bonds






2,510



80



2,590Total assets measured at fair value

$
27,068


$
2,510


$
80


$
29,658Liabilities:Accrued expenses and other liabilities:Unrealized loss on currency instruments designated as hedges

$



$
545


$



$
545Total liabilities measured at fair value

$



$
545


$



$
545     (1)
    
    Excludes $24.2 million in cash held in Company bank
    accounts.  Note 4.
    Business
    Combinations  Merger
    of Oclaro Inc. and Avanex Corporation
    Business Combinations
 F-16




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Purchase
    Price Allocation
    PurchasePrice Allocation(Thousands)Cash, cash equivalents, short-term investments and restricted
    cash

$
25,746Accounts receivable


22,933Inventories


13,703Prepaid expenses and other current assets


6,802Property and equipment


1,432Other non-current assets


3,245Accounts payable


(15,568
)Accrued expenses and other liabilities


(17,687
)Other long-term liabilities


(4,377
)Total purchase price

$
36,229   Unaudited
    Pro Forma Financial Information
    Year EndedJune 27,


June 28,2009


2008(Thousands)Net revenues

$
327,135


$
406,577Loss from continuing operations

$
(63,186
)

$
(16,007
)Net loss

$
(69,573
)

$
(16,186
)Net loss per share (basic and diluted)

$
(0.38
)

$
(0.09
)Shares used in computing net loss per share (basic and diluted)


185,492



178,718     Note 5.
    Discontinued
    Operations  Exchange of Assets   F-17




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      June 27,


June 28,2009


2008(Thousands)Assets held for sale:Accounts receivable, net

$
3,556


$
4,220Inventories


5,566



5,904Prepaid expenses and other current assets


46



322Property and equipment, net


1,274



676$
10,442


$
11,122   June 27,


June 28,2009


2008(Thousands)Liabilities held for sale:Accounts payable

$
1,197


$
2,448Accrued expenses and other liabilities


831



745$
2,028


$
3,193       Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Revenues

$
24,829


$
32,828


$
31,631Cost of revenues


17,113



20,616



18,793Gross profit


7,716



12,212



12,838Operating expenses


14,106



12,585



12,824Other income (expense), net


53



194



257Income (loss) from discontinued operations before income taxes


(6,337
)


(179
)


271Income tax provision (benefit)


50







(4
)Income (loss) from discontinued operations

$
(6,387
)

$
(179
)

$
275  F-18




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 6.
    Balance
    Sheet Details    June 27,


June 28,2009


2008(Thousands)Cash and cash equivalents:Cash-in-bank

$
24,162


$
16,361Money market funds


20,399



10,022Commercial paper






6,480$
44,561


$
32,863Short-term investments:United States agency securities

$
6,669


$
2,977United States corporate bonds


2,590



14,868$
9,259


$
17,845       June 27,


June 28,2009


2008(Thousands)Inventories:Raw materials

$
16,560


$
17,810Work-in-process


29,825



23,741Finished goods


13,142



12,157$
59,527


$
53,708     June 27,


June 28,2009


2008(Thousands)Property and equipment, net:Buildings

$
16,696


$
18,411Plant and machinery


80,881



77,700Fixtures, fittings and equipment


1,085



1,067Computer equipment


12,936



13,701111,598



110,879Less: accumulated depreciation


(81,723
)


(78,593
)$
29,875


$
32,286    F-19




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    June 27,


June 28,2009


2008(Thousands)Accrued expenses and other liabilities:Trade payables

$
3,826


$
4,090Compensation and benefits related accruals


8,024



6,050Warranty accrual


2,228



2,598Current portion of restructuring accrual


9,485



1,720Unrealized loss on currency instruments designated as hedges


545



Other accruals


14,908



5,586$
39,016


$
20,044   Note 7.
    Goodwill
    and Other Intangible Assets       F-20




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    IntangiblesAccumulated


Net BookGoodwill


Cost


Amortization


Value(Thousands)July 1, 2006

$
8,881


$
58,832


$
39,165


$
19,667Adjustment


(1,000
)










Charged










9,155



(9,155
)Exchange Rate Adjustment






4,868



3,614



1,254June 30, 2007


7,881



63,700



51,934



11,766Adjustment






(108
)


(108
)


Acquired






385







385Charged










4,639



(4,639
)Disposals






(43,665
)


(43,665
)


Exchange Rate Adjustment






(113
)


(430
)


317June 28, 2008


7,881



20,199



12,370



7,829Charged










1,229



(1,229
)Disposals






(2,734
)


(2,734
)


Impairment


(7,881
)


(4,034
)






(4,034
)Exchange Rate Adjustment






(1,289
)


(674
)


(615
)June 27, 2009

$



$
12,142


$
10,191


$
1,951     Balance





Impairment


Translations


BalanceJune 28,





and


and


June 27,2008


Disposals


Amortization


Adjustments


2009(Thousands)Supply agreements

$
4,026


$



$



$
(773
)

$
3,253Customer relationships


1,168







(300
)


(149
)


719Customer databases


135















135Core and current technology


12,654



(2,734
)


(2,925
)


(345
)


6,650Patent portfolio


2,216







(809
)


(22
)


1,38520,199



(2,734
)


(4,034
)


(1,289
)


12,142Less accumulated amortization


(12,370
)


2,734



(1,229
)


674



(10,191
)Intangibles, net

$
7,829


$



$
(5,263
)

$
(615
)

$
1,951   F-21




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Balance








Translations


BalanceJune 30,








and


June 28,2007


Disposals


Additions


Adjustments


2008(Thousands)Supply agreements

$
4,213


$



$



$
(187
)

$
4,026Customer relationships


1,059











109



1,168Customer databases


132











3



135Core and current technology


35,155



(22,762
)


385



(124
)


12,654Patent portfolio


19,446



(17,208
)






(22
)


2,216Customer contracts


3,695



(3,695
)










63,700



(43,665
)


385



(221
)


20,199Less accumulated amortization


(51,934
)


43,665



(4,639
)


538



(12,370
)Intangibles, net

$
11,766


$



$
(4,254
)

$
317


$
7,829   Balance








Translations


BalanceJuly 1,








and


June 30,2006


Disposals


Additions


Adjustments


2007(Thousands)Supply agreements

$
4,213


$



$



$



$
4,213Customer relationships


1,051











8



1,059Customer databases


132















132Core and current technology


35,129











26



35,155Patent portfolio


14,612











4,834



19,446Customer contracts


3,695















3,69558,832











4,868



63,700Less accumulated amortization


(39,165
)






(9,155
)


(3,614
)


(51,934
)Intangibles, net

$
19,667


$



$
(9,155
)

$
1,254


$
11,766     Note 8.
    Restructuring
    Liabilities  chip-on-carrier
     F-22




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  sub-lease
      Commitments and Contingencies
    Accrued


Amounts








AccruedRestructuring


Charged to


Amounts


Adjustments


RestructuringCosts at June 28,


Restructuring


Paid or


and


Costs at June 27,2008


Costs


Written-Off


Reversals(1)


2009(Thousands)Lease cancellations and commitments

$
2,074


$
2,027


$
(1,966
)

$
6,185


$
8,320Termination payments to employees and related costs


754



5,693



(1,682
)


(46
)


4,719Total accrued restructuring charges


2,828


$
7,720


$
(3,648
)

$
6,139



13,039Less non-current accrued restructuring charges


(1,108
)














(3,554
)Accrued restructuring charges included within accrued expenses
    and other liabilities

$
1,720














$
9,485     (1)
    
    The Company assumed from Avanex facilities-related restructuring
    accruals of $6.2 million.  F-23




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accrued


Amounts








AccruedRestructuring


Charged to


Amounts


Adjustments


RestructuringCosts at June 30,


Restructuring


Paid or


and


Costs at June 28,2007


Costs


Written-Off


Reversals


2008(Thousands)Lease cancellations and commitments

$
3,845


$
1,141


$
(2,904
)

$
(8
)

$
2,074Asset impairment






35



(35
)






Termination payments to employees and related costs


546



2,350



(2,141
)


(1
)


754Total accrued restructuring charges


4,391


$
3,526


$
(5,080
)

$
(9
)


2,828Less non-current accrued restructuring charges


(1,678
)














(1,108
)Accrued restructuring charges included within accrued expenses
    and other liabilities

$
2,713














$
1,720   Accrued


Amounts








AccruedRestructuring


Charged to


Amounts


Adjustments


RestructuringCosts at July 1,


Restructuring


Paid or


and


Costs at June 30,2006


Costs


Written-Off


Reversals


2007(Thousands)Lease cancellations and commitments

$
11,438


$
867


$
(8,408
)

$
(52
)

$
3,845Termination payments to employees and related costs


4,691



9,480



(13,692
)


67



546Total accrued restructuring charges


16,129


$
10,347


$
(22,100
)

$
15



4,391Less non-current accrued restructuring charges


(3,196
)














(1,678
)Accrued restructuring charges included within accrued expenses
    and other liabilities

$
12,933














$
2,713   Note 9.
    Credit
    Agreement     F-24




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  90-day
        Note 10.
    Post-Retirement
    Benefits  Defined
    Contribution Plan
    401(k)
    Plan
   F-25




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 11.
    Commitments
    and Contingencies  Guarantees
  Guarantors Accounting and Disclosure
    Requirements for Guarantees, Including Indirect Guarantees of
    Indebtedness to Others, an interpretation of FASB Statements
    No. 5, 57 and 107 and a rescission of FASB Interpretation
    No. 34
      Warranty
    accrual
      Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Warranty provision  beginning of period

$
2,598


$
2,569


$
3,429Warranties assumed in acquisition


250







Warranties issued


2,811



2,290



2,037Warranties utilized or expired


(3,000
)


(2,299
)


(3,210
)Currency translation adjustment


(431
)


38



313Warranty provision  end of period

$
2,228


$
2,598


$
2,569   Litigation
  In re
    New Focus, Inc. Initial Public Offering Securities
    Litigation
 F-26




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    In re
    Initial Public Offering Securities Litigation
      Bookham, Inc. v. JDS Uniphase Corp.
    and Agility Communications, Inc. No. 5:08-CV-01275-RMW,
  tm patents-in-suit.
  No. 337-TA-662
 F-27




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  patents-in-suit,
    Form 8-K Form 8-K Form 8-K
   F-28




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    QinetiQ Limited v. Oclaro, Inc No. 1:09-cv-00372, patents-in-suit
  Sale-Leaseback
  2-year Accounting for Leases 20-year
  Bulletin No. 85-3 Accounting for Operating Leases with Scheduled Rent
    Increases
 F-29




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Operating
    Leases
    OperatingLease


SubleasePayments


Income(Thousands)2010

$
10,465


$
(916
)2011


7,126



(187
)2012


4,686



(33
)2013


2,579



2014


2,515



Thereafter


29,577



$
56,948


$
(1,136
)     Note 12.
    Stockholders
    Equity  Common
    Stock
           F-30




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Warrants
    Weighted-AverageWarrants


ExerciseOutstanding


Price(Thousands)Balance at July 1, 2006


3,093


$
6.40Issued September 1, 2006 in private placement


2,899


$
4.00Issued March 22, 2007 in private placement


4,092


$
2.80Balance at June 30, 2007


10,084


$
4.25Expired


(2
)

$
40.00Balance at June 28, 2008


10,082


$
4.24Assumed April 27, 2009 in acquisition


2,655


$
7.43Balance at June 27, 2009


12,737


$
4.91           Preferred
    Stock
  time-to-time
 F-31




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accumulated
    Other Comprehensive Income
    June 27,


June 28,2009


2008(Thousands)Accumulated other comprehensive incomeUnrealized gain (loss) on currency instruments designated as
    hedges

$
(545
)

$
86Currency translation adjustments


31,443



43,939Unrealized gain on short-term investments


7



11$
30,905


$
44,036   Note 13.
    Employee
    Stock Plans  Stock
    Options, Restricted Stock Awards and Restricted Stock
    Units
      Weighted-Weighted-


Restricted


AverageAwards


Stock


Average


Stock


GrantAvailable


Options


Exercise


Awards/Units


Date Fairfor Grant


Outstanding


Price


Outstanding


Value(Thousands)


(Thousands)





(Thousands)Balances at July 1, 2006


11,946



7,321


$
7.79



1,090


$
4.91Granted


(2,609
)


1,260


$
2.28



1,349


$
2.19Exercised or released






(4
)

$
2.69



(376
)

$
4.01Cancelled, forfeited or expired


(7,092
)


(2,148
)

$
7.23



(509
)

$
3.92Balances at June 30, 2007


2,245



6,429


$
9.16



1,554


$
3.09Authorized January 25, 2008


10,000















Granted


(2,951
)


1,750


$
2.13



1,201


$
2.37Exercised or released














(1,068
)

$
2.41Cancelled, forfeited or expired


299



(1,357
)

$
6.64



(184
)

$
3.07Balances at June 28, 2008


9,593



6,822


$
5.87



1,503


$
3.00Assumed in acquisition


7,549



4,896


$
5.99



1,957


$
0.56Granted


(5,743
)


5,743


$
1.12







Exercised or released






(14
)

$
0.30



(1,074
)

$
2.66Cancelled or forfeited


1,404



(1,271
)

$
4.88



(232
)

$
4.11Balances at June 27, 2009


12,803



16,176


$
4.20



2,154


$
0.83    F-32




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-Weighted-


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Life


Value(Thousands)





(Years)


(Thousands)Options exercisable at June 27, 2009


6,313


$
8.69



5.5


$
Options outstanding at June 27, 2009


16,176


$
4.20



7.7


$
956   in-the-money
  Note 14.
    Stock-based
    Compensation  Share-Based Payment
      Year EndedJune 27,

June 28,

June 30,2009

2008

2007Expected life

4.5 years

4.5 years

4.5 yearsRisk-free interest rate

2.4%

3.6%

4.4% to 5.1%Volatility

83.5%

75.0%

81% to 85%Dividend yield





  F-33




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Stock-based compensation by category of expense:Cost of revenues

$
1,168


$
2,130


$
1,759Research and development


888



1,939



1,421Selling, general and administrative


2,016



4,266



2,984Income (loss) from discontinued operations


364



477



502$
4,436


$
8,812


$
6,666Stock-based compensation by type of award:Stock options

$
3,477


$
3,927


$
5,325Restricted stock awards


787



4,671



952Restricted stock vesting accelaration related to restructuring
    and severance charges










295Inventory adjustment to cost of revenues


172



214



94$
4,436


$
8,812


$
6,666     Note 15.
    Income
    Taxes    Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Domestic

$
(18,064
)

$
(7,086
)

$
(9,963
)Foreign


(6,306
)


(16,170
)


(72,378
)$
(24,370
)

$
(23,256
)

$
(82,341
)     Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Current:Foreign

$
1,399


$
5


$
109$
1,399


$
5


$
109  F-34




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Tax benefit at federal statutory rate

$
(7,793
)

$
(7,907
)

$
(28,820
)Unbenefited domestic losses and credits


5,495



2,409



4,380Unbenefited foreign losses and credits


3,697



5,503



24,549Provision for income taxes

$
1,399


$
5


$
109     June 27,


June 28,2009


2008(Thousands)Deferred tax assets:Net operating loss carryforwards

$
192,693


$
183,605Depreciation and capital losses


70,011



70,889Inventory valuation


4,534



14Accruals and reserves


5,070



319Capitalized research and development


618



341Tax credit carryforwards


6,587



3,611Other asset impairments


1,551



Stock compensation


2,072



1,585Total deferred tax assets


283,136



260,364Valuation allowance


(283,136
)


(260,364
)Net deferred tax assets

$



$
          F-35




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting
    for Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109
      Year EndedJune 27,


June 28,2009


2008(Thousands)Balance at beginning of period

$
92,280


$
3,612Revisions to opening unrecognized tax benefits






88,518Additions for tax positions related to the current year


439



150Reductions related to discontinued operations of the New Focus
    business


(41,001
)


Reductions for tax positions related to prior years


(49,267
)


Balance at end of period

$
2,451


$
92,280       Note 16.
    Net Loss
    Per Share  Earnings Per Share
 F-36




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 17.
    Operating
    Segments and Related Information  Disclosures about Segments of an
    Enterprise and Related Information
          Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Net revenues:Telecom

$
188,492


$
176,856


$
153,823Advanced photonics solutions


22,431



25,807



17,360Consolidated net revenues

$
210,923


$
202,663


$
171,183  F-37




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)Operating lossTelecom

$
(14,101
)

$
(29,641
)

$
(76,353
)Advanced photonics solutions


(3,688
)


2,638



1,056Total segment operating loss


(17,789
)


(27,003
)


(75,297
)Stock compensation


4,072



8,335



5,871Legal settlements


3,829



(2,882
)


Gain on sale of property and equipment


(12
)


(2,562
)


(2,918
)Impairment of goodwill and other tangible and intangible assets


9,133







1,621Consolidated operating loss

$
(34,811
)

$
(29,894
)

$
(79,871
)     Year EndedJune 27,


June 28,


June 30,2009


2008


2007(Thousands)United States

$
42,776


$
36,209


$
26,173Canada


14,596



39,050



56,092Europe:United Kingdom


10,921



8,134



5,035Other


42,315



35,596



25,495Asia:China


65,508



58,413



37,239Other


21,443



17,683



17,759Rest of world


13,364



7,578



3,390$
210,923


$
202,663


$
171,183     Long-Lived Tangible Assets


Total AssetsJune 27,


June 28,


June 27,


June 28,2009


2008


2009


2008(Thousands)United States

$
2,252


$
1,149


$
94,539


$
65,237Canada


185



304



363



751Europe:United Kingdom


3,104



6,296



52,861



61,350Other


4,286



4,094



28,204



28,477Asia:China


19,996



20,443



55,130



56,273Other


52







2,291



2$
29,875


$
32,286


$
233,388


$
212,090  F-38




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Significant
    Customers and Concentration of Credit Risk
        Note 18.
    Related
    Party Transactions    Note 19.
    Subsequent
    Event  Discontinued Operations 
    Exchange of Assets
 F-39




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 20.
    Selected
    Quarterly Consolidated Financial Data (Unaudited)    Three Months EndedJune 27,


March 28,


December 27,


September 27,2009


2009


2008


2008(Thousands)Net revenues

$
66,877


$
41,241


$
43,375


$
59,430Cost of revenues


50,296



32,381



36,971



44,777Gross profit


16,581



8,860



6,404



14,653Operating expenses


(24,142
)


(17,910
)


(21,848
)


(17,409
)Other income (expense), net


(4,712
)


(634
)


9,776



6,011Income (loss) from continuing operations before income taxes


(12,273
)


(9,684
)


(5,668
)


3,255Income tax provision (benefit)


1,406



19



36



(62
)Income (loss) from continuing operations


(13,679
)


(9,703
)


(5,704
)


3,317Loss from discontinued operations, net of tax


(928
)


(3,578
)


(757
)


(1,124
)Net income (loss)

$
(14,607
)

$
(13,281
)

$
(6,461
)

$
2,193Net income (loss) per share:Basic

$
(0.09
)

$
(0.13
)

$
(0.06
)

$
0.02Diluted

$
(0.09
)

$
(0.13
)

$
(0.06
)

$
0.02Shares used in computing net income (loss) per share:Basic


158,537



100,420



100,339



100,080Diluted


158,537



100,420



100,339



100,728   F-40




---



##### Table of Contents



OCLARO,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Three Months EndedJune 28,


March 29,


December 29,


September 29,2008


2008


2007


2007(Thousands)Net revenues

$
54,176


$
50,980


$
50,818


$
46,689Cost of revenues


43,096



41,123



40,279



37,404Gross profit


11,080



9,857



10,539



9,285Operating expenses


(15,014
)


(17,095
)


(18,597
)


(19,949
)Other income (expense), net


2,838



1,279



2,890



(369
)Loss from continuing operations before income taxes


(1,096
)


(5,959
)


(5,168
)


(11,033
)Income tax provision (benefit)


37



16



(48
)


Loss from continuing operations


(1,133
)


(5,975
)


(5,120
)


(11,033
)Income (loss) from discontinued operations, net of tax


(766
)


575



(67
)


79Net loss

$
(1,899
)

$
(5,400
)

$
(5,187
)

$
(10,954
)Net loss per share:Basic

$
(0.02
)

$
(0.05
)

$
(0.06
)

$
(0.13
)Diluted

$
(0.02
)

$
(0.05
)

$
(0.06
)

$
(0.13
)Shares used in computing net loss per share:Basic


99,604



99,316



90,963



82,586Diluted


99,604



99,316



90,963



82,586  F-41




---



##### Table of Contents



Financial
    Statement Schedule II: Valuation and Qualifying Accounts
    For the Years Ended June 27, 2009, June 28, 2008 and
    June 30, 2007
  Allowance for


Allowance forDoubtful Accounts


Sales Returns(Thousands)Balance at July 1, 2006

$
300


$
257Exchange rate movement


(22
)


28Additions charged to cost and expenses


725



88Deductions and write-offs


(354
)


(132
)Balance at June 30, 2007


649



241Exchange rate movement






Additions charged to cost and expenses


16



133Deductions and write-offs


(494
)


(186
)Balance at June 28, 2008


171



188Balances acquired


332



144Exchange rate movement






Additions charged to cost and expenses


171



53Deductions and write-offs


(51
)


(108
)Balance at June 27, 2009

$
623


$
277




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description of Exhibit3
.1

Amended and Restated Bylaws of Oclaro, Inc. (formerly Bookham,
    Inc.) (previously filed as Exhibit 3.1 to Registrants
    Registration Statement on
    Form S-8
    dated May 5, 2009 and incorporated herein by reference).3
.2

Restated Certificate of Incorporation of Oclaro, Inc.
    (previously filed as Exhibit 3.2 to Registrants
    Registration Statement on
    Form S-8
    dated May 5, 2009 and incorporated herein by reference).3
.3

Certificate of Ownership and Merger merging Oclaro, Inc. into
    Bookham, Inc. (previously filed as Exhibit 3.1 to
    Registrants Current Report on
    Form 8-K
    dated April 27, 2009 and incorporated herein by reference).10
.1

Form of Warrant (previously filed as Exhibit 99.4 to
    Registrants Current Report on
    Form 8-K
    dated December 10, 2004, and incorporated herein by
    reference).10
.2

Exchange Agreement, dated as of January 13, 2006, by and
    among Oclaro, Inc., Oclaro Technology plc and the Investors (as
    defined therein) (previously filed as Exhibit 99.1 to
    Registrants Current Report on
    Form 8-K
    filed on January 17, 2006, and incorporated herein by
    reference).10
.3

Form of Warrant (previously filed as Exhibit 99.2 to
    Registrants Current Report on
    Form 8-K
    filed on January 17, 2006, and incorporated herein by
    reference).10
.4

Securities Exchange Agreement, dated as of January 13,
    2006, by and between Oclaro, Inc. and the Investors (as such
    term is defined therein) (previously filed as Exhibit 99.3
    to Registrants Current Report on
    Form 8-K
    filed on January 17, 2006, and incorporated herein by
    reference).10
.5

Form of Warrant (previously filed as Exhibit 99.5 to
    Registrants Current Report on
    Form 8-K
    filed on January 17, 2006, and incorporated herein by
    reference).10
.6

Form of Warrant (previously filed as Exhibit 99.3 to
    Registrants Current Report on
    Form 8-K
    filed on September 5, 2006 and incorporated herein by
    reference).10
.7

Form of Warrant (previously filed as Exhibit 99.3 to
    Registrants Current Report on
    Form 8-K
    filed on March 26, 2007 and incorporated herein by
    reference).10
.8

Form of Replacement Warrant To Purchase Common Stock (previously
    filed as Exhibit 4.1 to Registrants Quarterly Report
    on
    Form 10-Q
    dated May 7, 2009 and incorporated herein by reference).10
.9

Credit Agreement, dated as of August 2, 2006, among Oclaro,
    Inc., Oclaro Technology plc, Oclaro Photonics, Inc. and Oclaro
    Technology, Inc. (formerly Bookham (US), Inc.), Wells Fargo
    Foothill, Inc. and other lenders party thereto. (previously
    filed as Exhibit 10.53 to Registrants Annual Report
    on
    Form 10-K
    for the year ended July 1, 2006, and incorporated herein by
    reference).10
.10

Security Agreement, dated as of August 2, 2006, among
    Oclaro, Inc., Onetta, Inc., Focused Research, Inc., Globe Y.
    Technology, Inc., Ignis Optics, Inc., Oclaro (Canada) Inc.,
    Bookham Nominees Limited and Bookham International Ltd., Wells
    Fargo Foothill, Inc. and other secured parties party thereto.
    (previously filed as Exhibit 10.54 to Registrants
    Annual Report on
    Form 10-K
    for the year ended July 1, 2006, and incorporated herein by
    reference).10
.11

Amendment Number Three to Credit Agreement, dated as of
    April 27, 2009, by and among Wells Fargo Foothill, Inc.,
    Oclaro, Inc., Oclaro Technology plc, New Focus, Inc. and Oclaro
    Technology, Inc. (previously filed as Exhibit 99.1 to the
    registrants Current Report on
    Form 8-K
    on May 1, 2009, and incorporated herein by reference).10
.12

Share Purchase Agreement dated August 10, 2005 among London
    Industrial Leasing Limited, Deutsche Bank AG (acting through its
    London Branch) and Oclaro Technology plc (previously filed as
    Exhibit 10.1 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended October 1, 2005, and incorporated
    herein by reference).10
.13

Loan Facility Agreement dated August 10, 2005 between City
    Leasing (Creekside) Limited and Deutsche Bank AG, Limited, for a
    facility of up to £18,348,132.33 (previously filed as
    Exhibit 10.2 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended October 1, 2005, and incorporated
    herein by reference).10
.14

Loan Facility Agreement dated August 10, 2005 between City
    Leasing (Creekside) Limited and Deutsche Bank AG, Limited for a
    facility of up to £42,500,000.00 (previously filed as
    Exhibit 10.3 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended October 1, 2005, and incorporated
    herein by reference).10
.15

Agreement and Plan of Merger and Reorganization dated
    January 27, 2009 by and among Oclaro Inc., Ultraviolet
    Acquisition Sub, Inc., and Avanex Corporation (previously filed
    as Annex A to Registrants Registration Statement on
    Form S-4
    dated February 26, 2009 and incorporated herein by
    reference).




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.16

Lease dated December 23, 1999 by and between Silicon Valley
    Properties, LLC and Oclaro Photonics, Inc., with respect to 2580
    Junction Avenue, San Jose, California (previously filed as
    Exhibit 10.32 to Registrants Amendment No. 1 to
    Transition Report on
    Form 10-K
    for the for the transition period from January 1, 2004 to
    July 3, 2004, and incorporated herein by reference).10
.17

Agreement for Sale and Leaseback dated as of March 10,
    2006, by and among Oclaro Technology plc, Coleridge
    (No. 24) Limited and Oclaro, Inc. (previously filed as
    Exhibit 10.3 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended April 1, 2006, and incorporated
    herein by reference).10
.18

Pre-emption Agreement dated as of March 10, 2006, by and
    among Oclaro Technology plc, Coleridge
    (No. 24) Limited and Oclaro, Inc. (previously filed as
    Exhibit 10.4 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended April 1, 2006, and incorporated
    herein by reference).10
.19

Lease dated as of March 10, 2006, by and among Oclaro
    Technology plc, Coleridge (No. 24) Limited and Oclaro,
    Inc. (previously filed as Exhibit 10.5 to Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended April 1, 2006, and incorporated
    herein by reference).10
.20(1)

Volume Supply Agreement, dated May 6, 2004, between Avanex
    Corporation and Fabrinet. (previously filed as
    Exhibit 10.12 of Avanex Corporations Quarterly Report
    (File
    No. 000-29175)
    on
    Form 10-Q
    filed on February 14, 2006, and incorporated herein by
    reference).10
.21(1)

First Amendment to the Volume Supply Agreement, dated
    April 1, 2008, between Avanex Corporation and Fabrinet.
    (previously filed as Exhibit 10.33 of Avanex
    Corporations Annual Report on
    Form 10-K
    (File
    No. 000-29175)
    filed on September 5, 2008, and incorporated herein by
    reference).10
.22(2)

2004 Employee Stock Purchase Plan (previously filed as
    Exhibit 10.18 to Registrants Transition Report on
    Form 10-K
    for the transition period from January 1, 2004 to
    July 3, 2004, and incorporated herein by reference).10
.23(2)

2004 Sharesave Scheme (previously filed as
    Exhibit 10.20 to Registrants Transition Report on
    Form 10-K
    for the transition period from January 1, 2004 to
    July 3, 2004, and incorporated herein by reference).10
.24(2)

U.K. Subplan to the 2004 Stock Incentive Plan (previously filed
    as Exhibit 10.4 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended April 2, 2005, and incorporated
    herein by reference).10
.25(2)

Form of Incentive Stock Option, Form of Non-Statutory Stock
    Option, Form of Restricted Stock Unit Agreement and Form of
    Restricted Stock Agreement (previously filed as part of
    Exhibit 10.1 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended December 31, 2005 and incorporated
    herein by reference)10
.26(2)

Amended and Restated 2004 Stock Incentive Plan (previously filed
    as Exhibit 10.1 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended December 29, 2007, and incorporated
    herein by reference).10
.27(2)

Form of amendment to restricted stock award agreement issued
    pursuant to Amended and Restated 2004 Stock Incentive Plan
    (previously filed as Exhibit 10.4 to Registrants
    Quarterly Report on
    Form 10-Q
    dated May 7, 2009 and incorporated herein by reference).10
.28(2)

Contract of Employment between Oclaro Technology plc and Jim
    Haynes (previously filed as Exhibit 10.38 to
    Registrants Annual Report on
    Form 10-K
    for the year ended July 2, 2005, and incorporated herein by
    reference).10
.29(2)

Form of Indemnification Agreement, dated October 26, 2005,
    between Oclaro, Inc. and each of Giorgio Anania and Liam Nagle,
    (previously filed as Exhibit 99.1 to Registrants
    Current Report on
    Form 8-K
    filed on November 1, 2005, and incorporated herein by
    reference).10
.30(2)

Restricted Stock Agreement dated November 11, 2005 between
    Oclaro, Inc. and Jim Haynes (previously filed as
    Exhibit 10.5 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended December 31, 2005, and
    incorporated herein by reference).10
.31(2)

Letter Agreement, dated May 7, 2007, between Oclaro, Inc.
    and Peter Bordui (previously filed as Exhibit 99.1 to
    Registrants Current Report on
    Form 8-K
    filed on May 11, 2007 and incorporated herein by reference).10
.32(2)

Employment Agreement, dated July 10, 2007, between the
    Oclaro, Inc. and Alain Couder (previously filed as
    Exhibit 99.1 to Registrants Current Report on
    Form 8-K
    filed on July 11, 2007 and incorporated herein by
    reference).




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.33(2)

Form of Indemnification Agreement, between Oclaro, Inc. and
    directors and executive officers (previously filed as
    Exhibit 10.2 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended December 29, 2007 and incorporated
    herein by reference).10
.34(2)

Summary of cash bonus plan (previously provided in
    Registrants Current Report on
    Form 8-K
    filed on January 25, 2008 and, with respect to the summary
    to the cash bonus plan, is incorporated herein).10
.35(2)

Form of Executive Severance and Retention Agreement, between
    Oclaro, Inc. and its executive officers (previously filed as
    Exhibit 10.1 to Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended March 29, 2008 and incorporated
    herein by reference).10
.36(2)

Summary of cash bonus plan (previously provided in
    Registrants Current Report on
    Form 8-K
    filed on July 25, 2008 and, with respect to the summary of
    the cash bonus plan, incorporated herein by reference)10
.37(2)

Summary of cash bonus plan (previously provided in
    Registrants Current Report on
    Form 8-K
    filed on October 29, 2008 and incorporated herein by
    reference).10
.38(2)

Summary of cash bonus plan (previously provided in
    Registrants Current Report on
    Form 8-K
    filed on February 24, 2009, and incorporated herein by
    reference).10
.39(2)

Summary of cash bonus plan (previously provided in
    Registrants Current Report on
    Form 8-K
    filed on July 27, 2009 and incorporated herein by
    reference).10
.40(2)

Consulting Agreement between Oclaro, Inc. (formerly known as
    Bookham, Inc.), Avanex Corporation and Giovanni Barbarossa10
.41(2)

Separation and Release Agreement between Oclaro, Inc. (formerly
    known as Bookham, Inc.), Avanex Corporation and Giovanni
    Barbarossa10
.42

Form of Indemnification Agreement between Avanex Corporation and
    each of its directors and officers (previously filed as
    Exhibit 10.1 of Avanex Corporations Registration
    Statement
    No. 333-92027
    on
    Form S-1
    filed on December 3, 1999,and incorporated herein
    by reference).10
.43(2)

Avanex 1998 Stock Plan, as amended and restated (previously
    filed as Exhibit 10.2 of Avanex Corporations Annual
    Report on
    Form 10-K
    (File
    No. 000-29175)
    filed on September 5, 2008, and incorporated herein by
    reference).10
.44(2)

Avanex 1999 Director Option Plan, as amended (previously
    filed as Exhibit 10.5 of Avanex Corporations Annual
    Report on
    Form 10-K
    (File
    No. 000-29175)
    filed on September 5, 2008, and incorporated herein by
    reference).10
.45(2)

Form of stock option agreement between Avanex and certain of its
    directors.10
.46(2)

Form of stock option agreement between Avanex and certain of its
    executive officers.10
.47(2)

Form of stock option agreement between Avanex and certain of its
    employees.10
.48(2)

Form of Restricted Stock Unit Agreement between Avanex and
    certain of its executive officers.10
.49(2)

Form of Restricted Stock Unit Agreement between Avanex and
    certain of its employees.16
.1

Letter from Ernst & Young LLP to the Securities and
    Exchange Commission dated February 13, 2008 (previously
    filed as Exhibit 16.1 to Registrants Current Report
    on
    Form 8-K
    filed on February 14, 2008 and incorporated herein by
    reference).21
.1

List of Oclaro, Inc. subsidiaries23
.1

Consent of Independent Registered Public Accounting Firm23
.2

Consent of Independent Registered Public Accounting Firm31
.1

Certification of Chief Executive Officer Pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 200231
.2

Certification of Chief Financial Officer Pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 200232
.1

Certification of Chief Executive Officer Pursuant to
    18 U.S.C. Section 135032
.2

Certification of Chief Financial Officer Pursuant to
    18 U.S.C. Section 1350     (1)
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment granted by the Commission.(2)
    
    Management contract or compensatory plan or arrangement.