Stock-Based Compensation (Tables)

12 Months Ended

Oct. 27, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The following table summarizes information with respect to shares of the Company’s common stock that may be issued under the Company’s existing equity compensation plans as of October 27, 2012 (in thousands, except per share amounts):



Plan Category	A Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		B Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		C Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excludes Securities Reflected in Column A)
Equity compensation plans approved by stockholders ⁽¹⁾	23,561	⁽³⁾	$	5.52	76,048	⁽⁴⁾
Equity compensation plans not approved by stockholders ⁽²⁾	5,936	⁽⁵⁾	$	5.06	—
Total	29,497		$	5.43	76,048


(1)	Primarily consist of the 2009 ESPP, the 2009 and 1999 Director Plans and the 2009 and 1999 Stock Plans.


(2)	Consist solely of the 1999 NSO Plan described in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements and Foundry’s 2000 NSO Plan, which was assumed in connection with our acquisition of Foundry.


(3)	Amount excludes purchase rights accrued under the 2009 ESPP. As of October 27, 2012, the 2009 ESPP had a stockholder-approved reserve of 65.0 million shares, of which 38.7 million shares were available for future issuance.


(4)	Amount consists of shares available for future issuance under the 2009 ESPP, the 2009 Director Plan and the 2009 Stock Plan.


(5)	Substantially all shares were granted prior to the fiscal year ended October 25, 2003. Information relating to equity compensation plans is set forth in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements.

Stock-Based Compensation Expense Included In Line Items Of Consolidated Statements Of Operations

Stock-based compensation expense, net of estimated forfeitures, was included in the following line items on the Consolidated Statements of Operations as follows (in thousands):



	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Cost of revenues	$	15,433	$	15,607	$	13,552
Research and development	17,952		18,959		27,795
Sales and marketing	33,257		36,068		45,232
General and administrative	10,527		12,442		15,046
Total stock-based compensation	$	77,169	$	83,076	$	101,625

Stock-Based Compensation Expense By Grant Type

The following table presents stock-based compensation expense, net of estimated forfeitures, by grant type (in thousands):



	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Stock options, including variable options	$	1,079	$	3,483	$	12,383
Restricted stock awards and restricted stock units (“RSUs”)	56,791		55,750		55,580
Employee stock purchase plan (“ESPP”)	19,299		23,843		33,662
Total stock-based compensation	$	77,169	$	83,076	$	101,625

Stock-Based Compensation, Unrecognized Compensation Expense And Weighted-Average Period

The following table presents unrecognized compensation expense, net of estimated forfeitures, of the Company’s equity compensation plans as of October 27, 2012, which is expected to be recognized over the following weighted-average periods, (in thousands, except for weighted-average period):



	Unrecognized Compensation Expense		Weighted- Average Period (in years)
Stock options	$	635	0.54
RSUs	$	95,152	2.01
ESPP	$	16,737	1.11

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions



	Fiscal Year Ended
Stock Options	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.1 - 0.8%		0.1 - 0.6%		0.3 - 2.0%
Expected volatility	48.8 - 56.5%		50.3 - 61.9%		49.3 - 53.3%
Expected term (in years)	4.0		4.0		4.0

Schedule of Share-based Compensation, Stock Options, Activity

A summary of stock option activity under the equity compensation plans for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:



	Shares (in thousands)		Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at October 31, 2009	89,647		$	5.04			3.17	$	380,991
Granted	1,920		6.76		$	2.89
Exercised	(14,210	)	2.95					51,700
Forfeited or expired	(5,691	)	13.68
Outstanding at October 30, 2010	71,666		4.82				2.58	146,199
Granted	243		5.47		$	2.23
Exercised	(16,814	)	3.48					46,047
Forfeited or expired	(4,330	)	9.03
Outstanding at October 29, 2011	50,765		4.91				1.98	35,494
Granted	160		5.55		$	2.39
Exercised	(16,993	)	3.39					36,498
Forfeited or expired	(4,435	)	7.34
Outstanding at October 27, 2012	29,497		5.43				1.61	26,077
Vested and expected to vest at October 27, 2012	29,518		$	5.42			1.60	$	26,076
Exercisable and vested at:
October 27, 2012	28,591		$	5.40			1.51	$	25,985

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions

The fair value of the option component of Brocade ESPP shares was estimated using the Black-Scholes option pricing model using the following weighted-average assumptions:



	Fiscal Year Ended
Employee Stock Purchase Plan	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.2	%	0.6	%	0.6	%
Expected volatility	52.5	%	65.5	%	67.8	%
Expected term (in years)	1.5		1.1		1.5

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity

A summary of the changes in restricted stock units outstanding under Brocade’s equity compensation plans during the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:



	Shares (in thousands)		Weighted-Average Grant Date Fair Value
Nonvested at October 31, 2009	32,693		$	4.37
Granted	10,801		5.84
Vested	(12,753	)	5.26
Forfeited	(2,570	)	6.74
Nonvested at October 30, 2010	28,171		4.32
Granted	12,754		5.68
Vested	(13,434	)	5.82
Forfeited	(4,010	)	6.37
Nonvested at October 29, 2011	23,481		3.85
Granted	11,166		4.97
Vested	(9,597	)	4.82
Forfeited	(3,054	)	5.92
Nonvested at October 27, 2012	21,996		3.71
Vested and expected to vest at October 27, 2012	20,277		$	3.71

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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- Definition

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

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