(page 2 of 8 ) A Brocade letter offering to employ Antonio Canova, who eventually became chief financial officer, was dated Nov. 13, 2000. It told him he'd get options for 180,000 shares with a grant date of "the first date of your employment." According to documents on file with the SEC, the letter went on to say: "To accelerate your on-boarding with Brocade, we extend to you the opportunity to join us on a part-time basis" of up to four hours per week prior to joining full-time. Mr. Canova, who has since left Brocade, couldn't be reached for comment. Brocade, based in San Jose, Calif., is a data storage networking firm with just over 1,300 employees. It provides storage switches that are a sort of virtual traffic cop, allowing storage devices to be interconnected. A close look inside Brocade reveals some of the questionable practices now being exposed in the unfolding stock-options scandal. It also suggests why the scandal has engulfed so many Silicon Valley technology companies. During the tech mania of the late 1990s and early 2000s, many firms were short of cash but high on promise. They used options as their primary lure and currency during the height of the boom. Pressure grew to make this currency as valuable as possible. But any manipulation of stock-option grant dates can mean that a company has made false disclosures in the past -- a violation of federal law -- and perhaps has reported financial results incorrectly. Among dozens of companies now under federal investigation for options practices such as backdating them to low-price dates, several firms have already restated their financial results. Brocade was early to do so. After an internal probe, the company twice restated past results, the first time in January 2005. The changes were significant. For example, Brocade originally reported a profit of $67.9 million in the year ended Oct. 28, 2000. In restatements, that became a loss of $951.2 million. The company also relieved Mr. Reyes of his CEO duties and eventually terminated him. Mr. Reyes was a tough manager who was known for firing questions at any employee who passed him by without making eye contact. Intensely competitive, he could make crude remarks about Brocade's competitors, referring to the main one, McData Corp., as "McDoodoo."         PREVIOUS PAGE RETURN TO BIO NEXT PAGE