Stock-Based Compensation (Tables)

12 Months Ended

Oct. 26, 2013

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 26, 2013 (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⁾	9,686	⁽³⁾	$	6.51	56,756	⁽⁴⁾
Equity compensation plans not approved by stockholders ⁽²⁾	2,875	⁽⁵⁾	$	5.12	—
Total	12,561		$	6.19	56,756


⁽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 26, 2013, the 2009 ESPP had a stockholder-approved reserve of 65.0 million shares, of which 27.9 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⁾	A substantial number of shares were granted in the first quarter of fiscal year 2013. 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 Income as follows (in thousands):



	Fiscal Year Ended October 26, 2013		Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011
Cost of revenues	$	14,519	$	15,433	$	15,607
Research and development	17,509		17,952		18,959
Sales and marketing	29,425		33,257		36,068
General and administrative	12,165		10,527		12,442
Total stock-based compensation	$	73,618	$	77,169	$	83,076

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 26, 2013		Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011
Stock options	$	2,581	$	1,079	$	3,483
Restricted stock units (“RSUs”)	50,522		56,791		55,750
Employee stock purchase plan (“ESPP”)	20,515		19,299		23,843
Total stock-based compensation	$	73,618	$	77,169	$	83,076

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 26, 2013, 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	$	3,565	1.38
RSUs	$	86,956	2.02
ESPP	$	6,270	0.88

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



	Fiscal Year Ended
	October 26, 2013		October 27, 2012		October 29, 2011
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.6 - 1.7%		0.1 - 0.8%		0.1 - 0.6%
Expected volatility	39.9 - 44.9%		48.8 - 56.5%		50.3 - 61.9%
Expected term (in years)	5.7		4.7		3.9

Schedule of Share-based Compensation, Stock Options, Activity

A summary of stock option activity under the equity compensation plans for the years ended October 26, 2013, October 27, 2012, and October 29, 2011, 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 as of 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 as of 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 as of October 27, 2012	29,497		5.43				1.61	26,077
Granted	2,875		5.64		$	2.34
Exercised	(13,149	)	3.99					32,324
Forfeited or expired	(6,662	)	6.90
Outstanding as of October 26, 2013	12,561		6.19				2.37	24,784
Vested and expected to vest as of October 26, 2013	12,384		$	6.21			2.32	$	24,393
Exercisable and vested as of:
October 26, 2013	9,586		$	6.37			1.20	$	18,300

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
	October 26, 2013		October 27, 2012		October 29, 2011
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.2	%	0.2	%	0.6	%
Expected volatility	39.5	%	52.5	%	65.5	%
Expected term (in years)	1.3		1.5		1.1

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 26, 2013, October 27, 2012, and October 29, 2011, is presented as follows:



	Shares (in thousands)		Weighted-Average Grant Date Fair Value
Nonvested as of October 30, 2010	28,171		$	4.32
Granted	12,754		5.68
Vested	(13,434	)	5.82
Forfeited	(4,010	)	6.37
Nonvested as of October 29, 2011	23,481		3.85
Granted	11,166		4.97
Vested	(9,597	)	4.82
Forfeited	(3,054	)	5.92
Nonvested as of October 27, 2012	21,996		3.71
Granted	11,518		5.75
Vested	(7,401	)	5.69
Forfeited	(3,352	)	5.39
Nonvested as of October 26, 2013	22,761		3.85
Vested and expected to vest as of October 26, 2013	19,565		$	3.85

- 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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