e425
Filed by Brocade Communications
Systems, Inc. Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: McData Corporation
Commission File No.:000-31257
FOR IMMEDIATE RELEASE
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BROCADE CONTACTS |
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Media Relations
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Investor Relations
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Bite PR |
Leslie Davis
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Shirley Stacy
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Mat Small |
Tel: 408.333.5260
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Tel: 408.333.5752
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Tel: 415.365.0398 |
lmdavis@brocade.com
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sstacy@brocade.com
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mat.small@bitepr.com |
ISS AND GLASS LEWIS RECOMMEND VOTE FOR PROPOSED ACQUISITION OF MCDATA
SAN JOSE, Calif.January 11, 2007/PRNewswire-FirstCall/Brocade® Communications Systems, Inc.
(NASDAQ: BRCD) today announced that Institutional Shareholder Services (ISS) and Glass, Lewis &
Co. (Glass Lewis), two leading independent proxy advisory firms, both recommended that Brocade
stockholders vote FOR the issuance of Brocade common stock in connection with Brocades proposed
acquisition of McDATA Corporation (NASDAQ: MCDTA/MCDT) at Brocades January 25, 2007 special
meeting of stockholders. Shareholders of record as of the close of business on November 30, 2006
will be entitled to vote at the special meeting.
ISS and Glass Lewis are widely recognized as the leading independent proxy advisory firms in the
nation. Their recommendations are reviewed and considered by major institutional investment firms,
mutual firms, and other fiduciaries throughout the country.
In making its recommendation, ISS stated in its January 10, 2007 report:
Based on our review of the transaction particularly the strategic rationale and the 42.8 percent
increase in stock price since the announcement of the acquisition transaction, we believe that the
share issuance warrants shareholder support.
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In making its recommendation, Glass Lewis stated in its January 8, 2007 report:
Despite the ongoing FTC review, we believe that the proposed transaction has benefits for
shareholders of both companies. The combination allows the companies to address the increasingly
competitive marketplace and the potential entry of other companies. The transaction allows the
companies to broaden and integrate their product lines, reduce operational costs, accelerate
investments in new products, and deliver higher levels of service to the combined customer base.
We are pleased that ISS and Glass Lewis have recommended that our shareholders vote in favor of
Brocades acquisition of McDATA, said Michael Klayko, Brocade Chief Executive Officer. Both ISS
and Glass Lewis recommendations are consistent with our boards unanimous determination that the
companys acquisition of McDATA will significantly enhance long-term growth opportunities, thereby
creating substantial value for our combined shareholders. We believe that the combination will
accelerate the pace of innovation, enable us to build stronger relationships with our customers and
partners, and provide greater scale and efficiencies to accelerate our growth.
As previously announced on August 8, 2006, Brocade and McDATA have entered into a definitive
agreement whereby Brocade will acquire McDATA in an all-stock transaction. Under the terms of the
agreement, McDATA stockholders will receive 0.75 shares of Brocade common stock for each share of
McDATA class A common stock and each share of McDATA class B common stock they hold. The
acquisition is subject to obtaining approval from both Brocade and McDATA stockholders, regulatory
approvals, and certain other closing conditions.
Cautionary Statement
This press release contains statements that are forward-looking in nature, including statements
regarding the completion of Brocades proposed acquisition of McDATA and the expected benefits of
the acquisition. These statements are based on current expectations on the date of this press
release and involve a number of risks and uncertainties, which may cause actual results to differ
significantly from such estimates. The risks include, but are not limited to, the risk that
transaction does not close, including the risk that required stockholder and regulatory approvals
for the acquisition may not be obtained; the possibility that expected synergies and cost savings
will not be obtained; the difficulty of integrating the business, operations and employees of the
two companies; as well as developments in the market for
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storage area networking and related products and services. Certain of these and other risks are set
forth in more detail in Item 1A. Risk Factors in Brocades Annual Report on Form 10-K for the
fiscal year ended October 28, 2006. Brocade does not assume any obligation to update or revise any
such forward-looking statements, whether as the result of new developments or otherwise.
About Brocade Communications Systems, Inc.
Brocade delivers industry-leading platforms, solutions, and services for intelligently connecting,
managing, and optimizing IT resources in shared storage environments. The worlds premier systems,
server, and storage providers offer the Brocade SilkWorm® family of Storage Area Network (SAN)
connectivity platforms as the foundation for shared storage in organizations of all sizes. In
addition, the Brocade Tapestry family of IT infrastructure solutions extends the ability to
proactively manage and optimize application and information resources across the enterprise. Using
Brocade solutions, organizations are better positioned to reduce cost, manage complexity, and
satisfy business compliance requirements through optimized use and management of their IT
resources. For more information, visit the Brocade Web site at www.brocade.com or contact the
company at info@brocade.com.
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Brocade, the Brocade B weave logo, Fabric OS, File Lifecycle Manager, MyView, Secure Fabric OS,
SilkWorm, iSNAP, and StorageX are registered trademarks and Tapestry is a trademark of Brocade
Communications Systems, Inc., in the United States and/or in other countries. All other brands,
products, or service names are or may be trademarks or service marks of, and are used to identify,
products or services of their respective owners.
IMPORTANT ADDITIONAL INFORMATION HAS BEEN FILED WITH THE SEC
Brocade has filed with the SEC a Registration Statement on Form S-4 in connection with the
transaction and Brocade and McDATA have filed with the SEC and have mailed to their respective
stockholders a Joint Proxy Statement/Prospectus in connection with the transaction. The
Registration Statement and the Joint Proxy Statement/Prospectus contain important information about
Brocade, McDATA, the transaction, and related matters. Investors and security holders are urged to
read the Registration Statement and the Joint Proxy Statement/Prospectus carefully. Investors and
security holders may obtain free copies of the Registration Statement and the Joint Proxy
Statement/Prospectus and other documents filed with the SEC by Brocade and McDATA through the web
site maintained by the SEC at www.sec.gov. In addition, investors and security holders may obtain
free copies of the Registration Statement and the Joint Proxy Statement/Prospectus from Brocade by
contacting Investor Relations at
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(408) 333-5752 or investor-relations@brocade.com or from McDATA by contacting Investor Relations
(408) 567-5815 or investor_relations@mcdata.com.
Brocade and its directors and executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of Brocade and McDATA in connection with the
transaction described herein. Information regarding the special interests of these directors and
executive officers in the transaction described herein is included in the Joint Proxy
Statement/Prospectus described above. Additional information regarding these directors and
executive officers is also included in Brocades proxy statement for its 2006 Annual Meeting of
Stockholders, which was filed with the SEC on or about February 24, 2006. This document is
available free of charge at the SECs web site at www.sec.gov and from Brocade by contacting
Brocade at Investor Relations at (408) 333-5752 or investor-relations@brocade.com.
McDATA and its directors and executive officers also may be deemed to be participants in the
solicitation of proxies from the stockholders of Brocade and McDATA in connection with the
transaction described herein. Information regarding the special interests of these directors and
executive officers in the transaction described herein is included in the Joint Proxy
Statement/Prospectus described above. Additional information regarding these directors and
executive officers is also included in McDATAs proxy statement for its 2006 Annual Meeting of
Stockholders, which was filed with the SEC on or about June 9, 2006. This document is available
free of charge at the SECs web site at www.sec.gov and from McDATA by contacting McDATA at
Investor Relations (408) 567-5815 or investor_relations@mcdata.com.