exv10w1






Exhibit 10.1




BROCADE COMMUNICATIONS SYSTEMS, INC.




1999 DIRECTOR PLAN




(Amended and restated as of April 10, 2008)




     1. Purposes of the Plan. The purposes of this 1999 Director Plan, amended and
restated as of April 10, 2008, are to attract and retain the best available personnel for
service as Outside Directors (as defined herein) of the Company, to provide additional incentive to
the Outside Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.



          The Plan permits the grant of options and restricted stock units. All options granted
hereunder shall be nonstatutory stock options.




          As part of the amendment to the Plan, it is intended that the subsequent annual grants will be
made on the date of the Company’s Annual Meeting instead of the anniversary of the date each
director joined the Board. In order to transition from an anniversary date grant cycle to an
Annual Meeting grant cycle, the size of the Subsequent Options (as defined below) will be reduced
on a pro-rata basis as we approach the 2009 Annual Meeting as described in more detail below in
Section 8(c). A similar adjustment is made when a new director receives his first Subsequent
Option and Subsequent RSU (as defined below) as described in Section 9(a).




     2. Definitions. As used herein, the following definitions shall apply:



          (a) “Annual Meeting” means the Company’s annual meeting of stockholders.




          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.




          (c) “Award” means, individually or collectively, a grant under the Plan of Options or
Restricted Stock Units.




          (d) “Board” means the Board of Directors of the Company, or a duly authorized
committee of the Board of Directors of the Company.




          (e) “Code” means the Internal Revenue Code of 1986, as amended.




          (f) “Common Stock” means the common stock of the Company.




          (g) “Company” means Brocade Communications Systems, Inc., a Delaware corporation.




          (h) “Director” means a member of the Board.




          (i) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.




          (j) “Employee” means any person, including officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor the payment
of




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a Director’s fee by the Company will be sufficient in and of itself to constitute “employment”
by the Company.




          (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.




          (l) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:




               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Market, the Nasdaq Global Select Market or
the Nasdaq Capital Market, its Fair Market Value shall be the closing sales price for such stock
(or, if no closing sales price was reported on that date, as applicable, on the last trading date
such closing sales price was reported) as quoted on such exchange or system on the day of
determination, as reported in The Wall Street Journal or such other source as the Board deems
reliable;



               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination (or, if no bids and asks were reported on
that date, as applicable, on the last trading date such bids and asks were reported); or



               (iii) In the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Board.



          (m) “Inside Director” means a Director who is an Employee.




          (n) “Option” means a stock option granted pursuant to the Plan.




          (o) “Outside Director” means a Director who is not an Employee.




          (p) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.




          (q) “Participant” means the holder of an outstanding Award.




          (r) “Plan” means this 1999 Director Plan, as amended and restated. The Plan was
previously referred to as the 1999 Director Option Plan.




          (s) “Restricted Stock Unit” or “RSU” means a bookkeeping entry representing an
amount equal to the Fair Market Value of one Share, and granted to a Participant pursuant to
Section 6 of the Plan. Each Restricted Stock Unit represents an unfunded and unsecured obligation
of the Company.




          (t) “Share” means a share of the Common Stock, as adjusted in accordance with Section
15 of the Plan.




          (u) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Internal Revenue Code of 1986.




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     3. Stock Subject to the Plan.



          (a) Subject to the provisions of Section 15 of the Plan, the maximum aggregate number of
Shares which may be granted as Restricted Stock Units or optioned and sold pursuant to an Option
under the Plan is 1,600,000 Shares (the “Pool”). The Shares may be authorized, but unissued, or
reacquired Common Stock.




          (b) If an outstanding Award expires or becomes unexercisable without having been exercised in
full, the unpurchased Shares which were subject thereto shall become available for future grant or
sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under
the Plan shall not be returned to the Plan and shall not become available for future distribution
under the Plan.




          (c) An Award of Restricted Stock Units will be counted against the Pool as two and a half (2
1/2) Shares for every one (1) Share subject to such Award. To the extent that an Award counted as
two and a half (2 1/2) Shares against the Pool at the time of grant pursuant to the preceding
sentence is recycled back into the Plan (e.g., upon Award termination), the Plan will be credited
with two and a half (2 1/2) Shares that will thereafter be available for future issuance under the
Plan.




     4. Options.



          (a) Administration of Option Grants.




               (i) All grants of Options to Outside Directors under this Plan shall be automatic and
nondiscretionary and shall be made strictly in accordance with the following provisions; provided,
however, that the Board may, in its sole discretion, provide that certain Outside Directors are not
eligible to receive grants of Options for specified periods of time.



               (ii) No person shall have any discretion to determine the number of Shares to be covered by
Options.



               (iii) In the event that any Option granted under the Plan would cause the number of Shares
subject to outstanding Options plus the number of Shares previously purchased under Options to
exceed the Pool, then the remaining Shares available for Option grant shall be granted under
Options to the Outside Directors on a pro rata basis. No further grants shall be made until such
time, if any, as additional Shares become available for grant under the Plan through action of the
Board or the stockholders to increase the number of Shares which may be issued under the Plan or
through cancellation or expiration of Options previously granted hereunder.



          (b) Prohibition Against Repricing. Subject to the provisions of Section 15 of the
Plan, the terms of any Option may not be amended to reduce the exercise price of outstanding
Options or cancel outstanding Options in exchange for cash, other Awards or Options with an
exercise price that is less than the exercise price of the original Option without stockholder
approval.




     5. Exercise of Options.



          (a) Procedure for Exercise of an Option; Rights as Stockholder.




               (i) Any Option granted hereunder shall be exercisable at such times as are set forth in
Section 7(a) or 8(a), as applicable, hereof; provided, however, that no Options shall be



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exercisable until stockholder approval of the Plan in accordance with Section 21 hereof has
been obtained.




               (ii) An Option may not be exercised for a fraction of a Share.



               (iii) An Option shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Option by the person entitled to exercise
the Option and full payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may consist of any consideration and method of payment
allowable under Section 13 of the Plan. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. A
share certificate for the number of Shares so acquired shall be issued to the Participant as soon
as practicable after exercise of the Option. No adjustment shall be made for a dividend or other
right for which the record date is prior to the date the stock certificate is issued, except as
provided in Section 15 of the Plan.



               (iv) Exercise of an Option in any manner shall result in a decrease in the number of Shares
which thereafter may be available, both for purposes of the Plan and for sale under the Option, by
the number of Shares as to which the Option is exercised.



          (b) Termination of Continuous Status as a Director. Subject to Section 15 hereof, in
the event an Participant’s status as a Director terminates (other than upon the Participant’s death
or Disability), the Participant may exercise his or her Option, but only within three (3) months
following the date of such termination, and only to the extent that the Participant was entitled to
exercise it on the date of such termination (but in no event later than the expiration of its ten
(10) year term). To the extent that the Participant was not entitled to exercise an Option on the
date of such termination, and to the extent that the Participant does not exercise such Option (to
the extent otherwise so entitled) within the time specified herein, the Option shall terminate.




          (c) Disability of Participant. In the event Participant’s status as a Director
terminates as a result of Disability, the Participant may exercise his or her Option, but only
within twelve (12) months following the date of such termination, and only to the extent that the
Participant was entitled to exercise it on the date of such termination (but in no event later than
the expiration of its ten (10) year term). To the extent that the Participant was not entitled to
exercise an Option on the date of termination, or if he or she does not exercise such Option (to
the extent otherwise so entitled) within the time specified herein, the Option shall terminate.




          (d) Death of Participant. In the event of an Participant’s death, the Participant’s
estate or a person who acquired the right to exercise the Option by bequest or inheritance may
exercise the Option, but only within twelve (12) months following the date of death, and only to
the extent that the Participant was entitled to exercise it on the date of death (but in no event
later than the expiration of its ten (10) year term). To the extent that the Participant was not
entitled to exercise an Option on the date of death, and to the extent that the Participant’s
estate or a person who acquired the right to exercise such Option does not exercise such Option (to
the extent otherwise so entitled) within the time specified herein, the Option shall terminate.




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     6. Restricted Stock Units.



          (a) Procedures for Grants.




               (i) All grants of Restricted Stock Units to Outside Directors under this Plan shall be
automatic and nondiscretionary and shall be made strictly in accordance with the following
provisions; provided, however, that the Board may, in its sole discretion, provide that certain
Outside Directors are not eligible to receive grants of Restricted Stock Units for specified
periods of time.



               (ii) No person shall have any discretion to determine the number of Shares to be covered by
Restricted Stock Units.



          (b) Form and Timing of Payment. Restricted Stock Units shall be settled in Shares, on
a one unit for one Share basis. When Shares are paid to the Participant in payment for the
Restricted Stock Units, par value ($.001 per share) will be deemed paid by the Participant for each
Restricted Stock Unit by services rendered by the Participant. Payment of earned Restricted Stock
Units shall be made as soon as practicable after the date(s) determined by the Board but no later
than March 15th of the calendar year following the applicable vesting date.




          (c) Cancellation. On the date of Participant’s termination as a Director, all
unvested Restricted Stock Units shall be forfeited to the Company.




          (d) Additional RSU Terms.




               (i) Company’s Obligation to Pay. Unless and until the Restricted Stock Units have vested in
the manner set forth above, the Participant will have no right to payment of such Restricted Stock
Units. Prior to actual payment of Shares upon the vesting of any Restricted Stock Units, such
Restricted Stock Units will represent an unsecured obligation. Payment of any vested Restricted
Stock Units shall be made in whole Shares.



               (ii) Rights as Stockholder. Neither the Participant nor any person claiming under or through
the Participant will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
(which may be in book entry form) will have been issued, recorded on the records of the Company or
its transfer agents or registrars, and delivered to the Participant (including through electronic
delivery to a brokerage account). After such issuance, recordation and delivery, the Participant
will have all the rights of a stockholder of the Company with respect to voting such Shares and
receipt of dividends and distributions on such Shares.



     7. First Awards.



          (a) First Option Grant. Each Outside Director shall be automatically granted an
Option to purchase 50,000 shares (the “First Option”) on the date on which such person first
becomes an Outside Director, whether through election by the stockholders of the Company or
appointment by the Board to fill a vacancy; provided, however, that an Inside Director who ceases
to be an Inside Director but who remains a Director shall not receive a First Option. The terms of
a First Option granted hereunder shall be as follows:




               (i) the term of the First Option shall be ten (10) years.



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               (ii) the First Option shall be exercisable only while the Outside Director remains a Director
of the Company, except as set forth in Sections 5 and 15 hereof.



               (iii) the exercise price per Share shall be 100% of the Fair Market Value per Share on the
date of grant of the First Option.



               (iv) subject to Sections 10 and 15 hereof, the First Option shall become exercisable as to
one-third of the Shares subject to the First Option each anniversary following its date of grant,
so as to become 100% vested on the third anniversary of the date of grant, provided that the
Participant continues to serve as a Director on such dates.



          (b) First RSU Grant.




               (i) Grant. Each Outside Director shall be automatically granted 15,000 Restricted
Stock Units (“First RSU”) on the date on which such person first becomes an Outside Director,
whether through election by the stockholders of the Company or appointment by the Board to fill a
vacancy; provided, however, that an Inside Director who ceases to be an Inside Director but who
remains a Director shall not receive a First Option.



               (iii) Vesting.
Subject to Sections 10 and 15, the First RSU shall vest and become
payable as to one-third of the Shares subject to the First RSU on the one (1) year anniversary of
the date of grant, and as to one-third of the Shares subject to the First RSU at each anniversary
thereafter, so that the First RSU shall be fully vested and become payable in full three (3) years
after its date of grant, provided that the Participant continues to serve as a Director on such
dates.



     8. Subsequent Awards.



          (a) Subsequent Option Grant On or After 2009 Annual Meeting. Commencing at the 2009
Annual Meeting and subject to proration under Section 9(a) below, each Outside Director shall be
automatically granted an Option to purchase 20,000 shares (“Subsequent Option”) annually on the
date of the Annual Meeting, provided that such Outside Director had served as an Outside Director
prior to such Annual Meeting and that he or she continues to be an Outside Director at and
immediately following such Annual Meeting. The terms of a Subsequent Option granted hereunder shall
be as follows:




               (i) the term of the Subsequent Option shall be ten (10) years.



               (ii) the Subsequent Option shall be exercisable only while the Outside Director remains a
Director of the Company, except as set forth in Sections 5 and 15 hereof.



               (iii) the exercise price per Share shall be 100% of the Fair Market Value per Share on the
date of grant of the Subsequent Option.



               (iv) subject to Sections 10 and 15 hereof, the Subsequent Option will become exercisable as to
100% of the Shares subject to the Subsequent Option on the one (1) year anniversary of the date of
grant, provided that the Participant continues to serve as a Director on such date.



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          (b) Subsequent RSU Grant.




               (i) Grant. Commencing at the 2008 Annual Meeting and subject to proration under
Section 9(a), each Outside Director shall be automatically granted 10,000 Restricted Stock Units
(the “Subsequent RSU”) annually on the date of the Annual Meeting, provided that such Outside
Director had served as an Outside Director prior to such Annual Meeting and that he or she
continues to be an Outside Director at and immediately following such Annual Meeting.



               (ii) Vesting. Subject to Sections 10 and 15, the Subsequent RSU shall vest and become
payable as to 100% of the Shares subject to the Subsequent RSU on the one (1) year anniversary of
the date of grant, provided that the Participant continues to serve as a Director on such date.



          (c) Subsequent Option Grants Prior to 2009 Annual Meeting (Transition Year). Each
Outside Director who was appointed or elected to the Board prior to the 2008 Annual Meeting and
that continues to be an Outside Director through their respective anniversary date of appointment
or election to the Board will be entitled to receive a Subsequent Option in an amount based on the
anniversary date of such Outside Director’s becoming a Director as follows:




               (i) Anniversary date occurs during the Company’s 2nd fiscal quarter 2008 (following
the 2008 Annual Meeting): an option to purchase 20,000 Shares.



               (ii) Anniversary date occurs during the Company’s 3rd fiscal quarter 2008: an
option to purchase 15,000 Shares.



               (iii) Anniversary date occurs during the Company’s 4th fiscal quarter 2008: an
option to purchase 10,000 Shares.



               (iv) Anniversary date occurs during the Company’s 1st fiscal quarter 2009: an
option to purchase 5,000 Shares.



               (v) An Outside Director with an anniversary date that occurs during the Company’s
2nd fiscal quarter 2009 but prior to the 2009 Annual Meeting will not be entitled to
receive a Subsequent Option on such anniversary date, but will receive a full Subsequent Option and
Subsequent RSU at the 2009 Annual Meeting pursuant to Sections 8(a) and 8(b), respectively.



               The terms of a Subsequent Option granted pursuant to this Section 8(c) shall otherwise be
subject to the terms described in Section 8(a)(i)-(iv). Outside Directors who receive grants
pursuant to this Section 8(c) will also be entitled to receive full grants of the Subsequent Option
and the Subsequent RSU Grant at the 2009 Annual Meeting pursuant to Section 8(a) and 8(b),
respectively. Subsequent Options pursuant to this Section 8(c) shall be granted on such Outside
Director’s applicable anniversary date. There shall not be any grants pursuant to this Section
8(c) after the 2009 Annual Meeting.



     9. Subsequent Award Pro Ration Policy.



          (a) New Directors Appointed Before an Annual Meeting. At the first (and only
the first) Annual Meeting after an Outside Director first becomes an Outside Director (commencing
at the 2009 Annual Meeting), such Outside Director will receive at such Annual Meeting, a
proportionate
amount of the Subsequent Option and Subsequent RSU (in lieu of the full Subsequent Option and
Subsequent RSU) based on the date of such Outside Director’s appointment as follows:




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               (i) Appointment on the date of the Annual Meeting, or after the date of the Annual Meeting but
prior to the end of the Company’s 2nd fiscal quarter of the fiscal year prior to the
fiscal year during which the Annual Meeting occurs: 100% of both the Subsequent Option and
Subsequent RSU.



               (ii) Appointment in the Company’s 3rd fiscal quarter of the fiscal year prior to
the fiscal year during which the Annual Meeting occurs: 75% of both the Subsequent Option and
Subsequent RSU.



               (iii) Appointment in the Company’s 4th fiscal quarter of the fiscal year prior to
the fiscal year during which the Annual Meeting occurs: 50% of both the Subsequent Option and
Subsequent RSU.



               (iv) Appointment in the Company’s 1st fiscal quarter of the fiscal year during
which the Annual Meeting occurs: 25% of both the Subsequent Option and Subsequent RSU.



               (v) Appointment in the Company’s 2nd fiscal quarter of the fiscal year during which
the Annual Meeting occurs and before the Annual Meeting date for such fiscal year: 0% of both the
Subsequent Option and Subsequent RSU.



     10. Certain Acceleration of Vesting Based on Timing of Annual Meeting.



          (a) Subsequent Awards. In the event that the Company’s next annual meeting of stockholders
following the award of a Subsequent Option or Subsequent RSU is held prior to the one year
anniversary of the date of grant of such Subsequent Option or Subsequent RSU, and an Outside
Director is not standing for re-election upon the expiration of his or her term at such annual
meeting but continues to serve until such annual meeting, then the applicable Subsequent Option and
Subsequent RSU shall vest on the date of such annual meeting.




          (b) First Awards. In the event that the Company’s annual meeting of stockholders is held
prior to a partial vesting anniversary date for a First Option or First RSU that was originally
granted on the date of an annual meeting, and an Outside Director is not standing for re-election
upon the expiration of his or her term at an annual meeting but continues to serve until such
annual meeting, then the applicable portion of the First Option and First RSU scheduled to vest in
such year shall vest on the date of such annual meeting.




     11. Eligibility. Awards may be granted only to Outside Directors. All Options shall
be automatically granted in accordance with the terms set forth in Section 4 hereof. All
Restricted Stock Units will be granted in accordance with the terms set forth in Section 6 hereof.



     The Plan shall not confer upon any Participant any right with respect to continuation of
service as a Director or nomination to serve as a Director, nor shall it interfere in any way with
any rights which the Director or the Company may have to terminate the Director’s relationship with
the Company at any time.



     12. Term of Plan. This Plan is an amendment and restatement of the 1999 Director
Option Plan effective as of its approval by the stockholders of the Company at the Company’s 2008
Annual Meeting as described in Section 21 of the Plan. It shall continue in effect until the tenth
anniversary of the Plan’s initial effectiveness unless sooner terminated under Section 16 of the
Plan.



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     13. Form of Consideration. The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall consist of (i) cash, (ii) check,
(iii) other Shares which have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, (iv) consideration
received by the Company under a cashless exercise program implemented by the Company in connection
with the Plan, or (v) any combination of the foregoing methods of payment.



     14. Non-Transferability of Awards. Awards may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Participant, only by the
Participant. Upon any attempt to sell, pledge, assign, hypothecate, transfer or otherwise dispose
of an Award, the Award immediately will become null and void.



     15. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.



          (a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, the number of Shares covered by each outstanding Award, the number of Shares which
have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Award, as well as the
price per Share covered by each such outstanding Award shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or any other increase
or decrease in the number of issued Shares effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration”; provided, further, that the
number of Shares subject to subsequently granted First Options, Subsequent Options, First RSUs, and
Subsequent RSUs shall not be proportionately adjusted. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of Shares subject to an Award.




          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, to the extent that an Option has not been previously exercised or a
Restricted Stock Unit has not vested, it shall terminate immediately prior to the consummation of
such proposed action.




          (c) Merger or Asset Sale.




               (i) In the event of a merger of the Company with or into another corporation or the sale of
substantially all of the assets of the Company, outstanding Awards may be assumed or equivalent
Awards may be substituted by the successor corporation or a Parent or Subsidiary thereof (the
“Successor Corporation”). If an Award is assumed or substituted for, the Award or equivalent award
shall continue to be exercisable or vest as provided in Section 7 or 8, as applicable, hereof for
so long as the Participant serves as a Director or a director of the Successor Corporation.
Following such assumption or substitution, if the Participant’s status as a Director or director of
the Successor
Corporation, as applicable, is terminated other than upon a voluntary resignation by the
Participant, the Award or award shall become fully exercisable, including as to Shares for which it
would not otherwise be exercisable. Thereafter, the Award or award shall remain exercisable in
accordance with Sections 5 (b) through (d) above.



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               (ii) If the Successor Corporation does not assume an outstanding Option or substitute for it
an equivalent option, the Option shall become fully vested and exercisable, including as to Shares
for which it would not otherwise be exercisable. In such event the Board shall notify the
Participant that the Option shall be fully exercisable for a period of thirty (30) days from the
date of such notice, and upon the expiration of such period the Option shall terminate. If the
Successor Corporation does not assume an outstanding grant of Restricted Stock Units or substitute
for it an equivalent award, the grant of Restricted Stock Units shall vest immediately prior to the
consummation of the applicable transaction.



               (iii) For the purposes of this Section 15(c), an Award shall be considered assumed if,
following the merger or sale of assets, the Award confers the right to purchase or receive, for
each Share subject to the Award immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in the merger or sale
of assets by holders of Common Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares). If such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its Parent, the Board
may, with the consent of the successor corporation, provide for the consideration to be received
upon the exercise of the Option, or upon the payout of a Restricted Stock Unit, for each Share
subject to the Award, to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common Stock in the merger
or sale of assets.



     16. Amendment and Termination of the Plan.



          (a) Amendment and Termination. The Board may at any time amend, alter, suspend, or
discontinue the Plan, but no amendment, alteration, suspension, or discontinuation shall be made
which would impair the rights of any Participant under any grant theretofore made, without his or
her consent. In addition, to the extent necessary and desirable to comply with Applicable Laws,
the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required.




          (b) Effect of Amendment or Termination. Any such amendment or termination of the Plan
shall not affect Awards already granted and such Awards shall remain in full force and effect as if
this Plan had not been amended or terminated.




     17. Conditions Upon Issuance of Shares.



          (a) Shares shall not be issued under any Award unless the issuance and delivery of such Shares
pursuant thereto, and in the case of an Option, the exercise of such Option, shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended,
the Exchange Act, the rules and regulations promulgated thereunder, state securities laws, and the
requirements of any stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such compliance.




          (b) As a condition to the exercise of an Award, the Company may require the person exercising
such Award to represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or distribute such Shares,
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.




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          (c) Inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to
issue or sell such Shares as to which such requisite authority shall not have been obtained.




     18. Reservation of Shares. The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.



     19. Award Agreement. Awards shall be evidenced by written award agreements in such
form as the Board shall approve.



     20. Stockholder Approval. The Plan shall be subject to approval by the stockholders
of the Company at the Company’s 2008 Annual Meeting. Such stockholder approval shall be obtained
in the degree and manner required under Applicable Laws.



     21. No Guarantee of Continued Service. The Plan shall not confer upon any
Participant any rights with respect to continuation of service as a Director or other service
provider to the Company or nomination to serve as a Director, nor shall it interfere in any way
with any rights which the Director of the Company may have to terminate the Director’s relationship
with the Company at any time.




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BROCADE COMMUNICATIONS SYSTEMS, INC.




DIRECTOR OPTION AGREEMENT




     Brocade Communications Systems, Inc., (the “Company”), has granted to [       ] (the
“Optionee”), an option to purchase a total of [       ] shares of the Company’s Common Stock
(the “Optioned Stock”), at the price determined as provided herein, and in all respects subject to
the terms, definitions and provisions of the Company’s 1999 Director Plan, as amended (the “Plan”),
adopted by the Company which is incorporated herein by reference. The terms defined in the Plan
shall have the same defined meanings herein.



     1. Nature of the Option. This Option is a nonstatutory option and is not intended to
qualify for any special tax benefits to the Optionee.



     2. Exercise Price. The exercise price is $___for each share of Common Stock.



     3. Exercise of Option. This Option shall be exercisable during its term in accordance
with the provisions of Section 5 of the Plan as follows:



          (a) Right to Exercise.




               (i) This Option shall become exercisable in installments cumulatively with respect to [       ]
percent (%) of the Optioned Stock one year after the date of grant, and as to an additional [      
] percent (%) of the Optioned Stock on each anniversary of the date of grant, so that one hundred
percent (100%) of the Optioned Stock shall be exercisable [       ] years after the date of grant;
provided, however, that in no event shall any Option be exercisable prior to the date the
stockholders of the Company approve the Plan.



               (ii) This Option may not be exercised for a fraction of a share.



               (iii) In the event of Optionee’s death, disability or other termination of service as a
Director, the exercisability of the Option is governed by Section 5 of the Plan.



          (b) Method of Exercise. This Option shall be exercisable by written notice which
shall state the election to exercise the Option and the number of Shares in respect of which the
Option is being exercised. Such written notice, in the form attached hereto as Exhibit A, shall be
signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of
the Company. The written notice shall be accompanied by payment of the exercise price.




     4. Method of Payment. Payment of the exercise price shall be by any of the following,
or a combination thereof, at the election of the Optionee:



          (a) cash;




          (b) check; or




          (c) surrender of other shares which (x) in the case of Shares acquired upon exercise of an
Option, have been owned by the Optionee for more than six (6) months on the date of




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surrender, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised; or




     (iv) delivery of a properly executed exercise notice together with such other documentation as
the Company and the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the exercise price.



     5. Restrictions on Exercise. This Option may not be exercised if the issuance of such
Shares upon such exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other law or regulations,
or if such issuance would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the Company may require
Optionee to make any representation and warranty to the Company as may be required by any
applicable law or regulation.



     6. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.



     7. Term of Option. This Option may not be exercised more than ten (10) years from the
date of grant of this Option, and may be exercised during such period only in accordance with the
Plan and the terms of this Option.



     8. Taxation Upon Exercise of Option. Optionee understands that, upon exercise of this
Option, he or she will recognize income for tax purposes in an amount equal to the excess of the
then Fair Market Value of the Shares purchased over the exercise price paid for such Shares. Since
the Optionee is subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, under
certain limited circumstances the measurement and timing of such income (and the commencement of
any capital gain holding period) may be deferred, and the Optionee is advised to contact a tax
advisor concerning the application of Section 83 in general and the availability a Section 83(b)
election in particular in connection with the exercise of the Option. Upon a resale of such Shares
by the Optionee, any difference between the sale price and the Fair Market Value of the Shares on
the date of exercise of the Option, to the extent not included in income as described above, will
be treated as capital gain or loss.



	 	 	 	 	 	 	 
	DATE OF GRANT:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BROCADE COMMUNICATIONS SYSTEMS, INC.,
	a Delaware corporation
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 





     Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached hereto, and
represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
this
Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board upon any questions
arising under the Plan.



	 	 	 	 	 
	Dated:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	 
	Optionee	 	 






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EXHIBIT A




DIRECTOR OPTION EXERCISE NOTICE




Brocade Communications Systems, Inc.

1745 Technology Drive

San Jose CA 95110



Attention: Corporate Secretary





	1.	 	Exercise of Option. The undersigned (“Optionee”) hereby elects to
exercise Optionee’s option to purchase ___shares of the Common Stock (the “Shares”)
of Brocade Communications Systems, Inc. (the “Company”) under and pursuant to the
Company’s 1999 Director Plan, as amended, and the Director Option Agreement dated
___(the “Agreement”).
	 
	2.	 	Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Agreement.
	 
	3.	 	Federal Restrictions on Transfer. Optionee understands that the Shares
must be held indefinitely unless they are registered under the Securities Act of 1933,
as amended (the “1933 Act”), or unless an exemption from such registration is
available, and that the certificate(s) representing the Shares may bear a legend to
that effect. Optionee understands that the Company is under no obligation to register
the Shares and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.
	 
	4.	 	Tax Consequences. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee’s purchase or disposition of the
Shares. Optionee represents that Optionee has consulted with any tax consultant(s)
Optionee deems advisable in connection with the purchase or disposition of the Shares
and that Optionee is not relying on the Company for any tax advice.
	 
	5.	 	Delivery of Payment. Optionee herewith delivers to the Company the
aggregate purchase price for the Shares that Optionee has elected to purchase and has
made provision for the payment of any federal or state withholding taxes required to be
paid or withheld by the Company.
	 
	6.	 	Entire Agreement. The Agreement is incorporated herein by reference.
This Exercise Notice and the Agreement constitute the entire agreement of the parties
and supersede in their entirety all prior undertakings and agreements of the Company
and Optionee with respect to the subject matter hereof. This Exercise Notice and the
Agreement are governed by Delaware law except for that body of law pertaining to
conflict of laws.





	 	 	 	 	 	 	 	 	 
	Submitted by:	 	Accepted by:
	OPTIONEE:	 	BROCADE COMMUNICATIONS SYSTEMS, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address:
	 	1745 Technology Drive
	 

	 	 	 	 	 	 	 	San Jose CA 95110
	Dated:

	 	 	 	Dated:	 	 	 	 
	 	 	 	 	 	 	 






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