BEAS: BEA Provides Update on Internal Stock Option Review

BEA Systems, Inc., a world leader in enterprise infrastructure software, today provided an update on its internal stock option review.

As previously announced, the Audit Committee of the Board of Directors of BEA Systems, Inc. (the “Company”) is conducting a review of the Company’s historical stock option grants. The Audit Committee, with the assistance of independent legal and forensic accounting experts, has reached a determination that, under applicable accounting principles, the actual measurement dates for certain stock options differed from the recorded measurement dates for such stock options. The Company expects that the difference in these measurement dates will result in material non-cash, stock-based compensation expenses. Accordingly, on Nov. 30, 2006, the Company’s Audit Committee, after consultation with the Company’s management and Board of Directors, determined that the Company’s previously issued financial statements should no longer be relied upon. Consequently, the Company will restate previously issued financial statements as necessary.

The Audit Committee has not completed its work nor reached final conclusions, and is continuing its review of the circumstances that gave rise to the differences in option measurement dates. The Audit Committee has not reviewed all stock options for which the accounting measurement dates may have been incorrectly determined, nor determined the final aggregate amount of additional stock-based compensation expenses that may need to be recorded or the amount of such expenses that may need to be recorded in any specific prior period or in any future period.

The Audit Committee has not yet determined the tax consequences that may result from these matters or whether tax consequences will give rise to liabilities on behalf of the Company which may have to be satisfied in any future period.

The Audit Committee and the Company’s management have discussed these matters with Ernst & Young LLP, the Company’s independent registered public accounting firm.

The Audit Committee is making every effort to complete its review, and the Company will make every effort to become current in its public filings as soon as practicable following the completion of the Audit Committee’s review.