Zhone Technologies’ Board of Directors Approves One-for-Five Reverse Stock Split

Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in network access solutions, today announced that its Board of Directors approved a one-for-five reverse stock split of its common stock which will become effective on or about March 11, 2010. The reverse stock split was authorized by Zhone’s shareholders at a special meeting held on October 16, 2008.

When the reverse split becomes effective, every five shares of Zhone’s issued and outstanding common stock will automatically be combined into one issued and outstanding share without any change in the par value of the shares. Following the reverse split, the number of shares of outstanding common stock of Zhone will be proportionally reduced from approximately 151.4 million to 30.3 million

No fractional shares of common stock will be issued as a result of the reverse stock split. Shareholders of record will receive cash in lieu of fractional shares to which they otherwise would be entitled, based upon the closing price of Zhone’s common stock on the last trading day before the reverse split becomes effective.

For a 20 trading day period beginning on the day the reverse split is effective, Zhone's common stock will trade on a post-split basis under the trading symbol "ZHNED" as an interim symbol to denote the reverse split. After this 20 trading day period, Zhone's common stock will resume trading under the symbol "ZHNE".

About Zhone Technologies — Access for a Converging World

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in multi-service access solutions, serving more than 700 of the world's most innovative network operators. The company offers the industry's only fully-integrated portfolio of MSAP, FTTx, EFM and Wi-Fi access technologies, improving network agility and reducing the costs of delivering the full spectrum of access services, including residential and business broadband, VoIP, and High-Definition IPTV — over copper, fiber, and wireless. Zhone is headquartered in California, and its MSAP products are all manufactured in the USA, in a facility that is emission, waste-water, and CFC free.

Zhone, the Zhone logo, and all Zhone product names are trademarks of Zhone Technologies, Inc. Other brand and product names are trademarks of their respective holders.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as "anticipate,” "believe,” "continue,” "could,” "estimate,” "expect,” "goal,” "intend,” "may,” "plan,” "project,” "seek,” "should,” "target,” "will,” "would,” variations of such words, and similar expressions are intended to identify forward-looking statements. In addition, forward-looking statements include, among others, statements that refer to the expected timing and effect of Zhone’s proposed reverse stock split. Readers are cautioned that actual results could differ materially from those expressed in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, the possibility that Zhone’s proposed reverse stock split may not be completed on the terms described in this release, or at all; commercial acceptance of our products; intense competition in the communications equipment market; our ability to execute on our strategy and operating plans; and economic conditions specific to the communications, networking, internet and related industries. In addition, please refer to the risk factors contained in Zhone’s SEC filings available at www.sec.gov, including without limitation, Zhone’s annual report on Form 10-K for the year ended December 31, 2008 and Zhone’s quarterly report on Form 10-Q for the quarters ended September 30, 2009, June 30, 2009 and March 31, 2009. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Zhone undertakes no obligation to update or revise any forward-looking statements for any reason.