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Brocade Statement Regarding Stock Option Matters

SAN JOSE, Calif., July 20 /PRNewswire-FirstCall/ -- Brocade Communications Systems, Inc. (Nasdaq: BRCD) today has issued the following statement.

It is a matter of public record that Brocade restated its historical financial results twice during calendar year 2005, following the completion of the Company's internal audit committee reviews of its historical stock option granting practices. As the Company disclosed previously, none of the charges affected its historical revenues, cash positions, or non-stock option related operating expenses.

As disclosed in the Company's public filings, Brocade has taken a number of steps to strengthen disclosure controls and procedures, and internal control over financial reporting, including personnel and executive changes and procedural changes to improve the stock option granting and employee change in status processes.

No executive officers involved in the historical stock option granting practices remain employed with Brocade.

In the first quarter of fiscal year 2006, the Company reserved $7 million for a proposed settlement with the SEC. The $7 million is based on an offer of settlement that the Company made to the SEC staff and which the Staff has indicated it would recommend to the SEC Commissioners. This proposed settlement is contingent upon SEC Commissioners approval. Brocade continues to cooperate regarding this matter. There is no further update on the proposed settlement.

Brocade has no comment with respect to the former executive officers.

SOURCE Brocade Communications Systems, Inc.

CONTACT: media, Leslie Davis, +1-408-333-5260, or lmdavis@brocade.com,
or investor, Shirley Stacy, +1-408-333-5752, or sstacy@brocade.com, both of
Brocade Communications Systems, Inc.
Web site: http://www.brocade.com

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