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Brocade Communications Systems Inc – ‘DEF 14A’ for 4/11/13

On:  Wednesday, 2/20/13, at 4:30pm ET   ·   Effective:  2/20/13   ·   For:  4/11/13   ·   Accession #:  1193125-13-67298   ·   File #:  0-25601

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/20/13  Brocade Comms Systems Inc         DEF 14A     4/11/13    1:1.1M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                          HTML    711K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant x                            Filed by a Party other than the Registrant ¨

Check the appropriate box:

Brocade Communications Systems, Inc.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

To the Stockholders of Brocade Communications Systems, Inc.:

You are cordially invited to attend the 2013 Annual Meeting of Stockholders (the “Annual Meeting”) of Brocade Communications Systems, Inc. (“Brocade” or the “Company”) to be held on April 11, 2013, at 2:00 p.m. Pacific Time, at our corporate offices located at 130 Holger Way, San Jose, California 95134. At the Annual Meeting, we will ask you to consider the following proposals:

Stockholders of record as of February 15, 2013 may vote at the Annual Meeting.

Your vote is important. Whether or not you plan to attend the meeting in person, it is important that your shares be represented. Please vote as soon as possible.

Sincerely,
Dave House				Lloyd A. Carney
Chairman of the Board				Chief Executive Officer

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON APRIL 11, 2013

On April 11, 2013, Brocade Communications Systems, Inc. will hold its 2013 Annual Meeting of Stockholders at 2:00 p.m. Pacific Time. The meeting will be held at Brocade’s corporate offices located at 130 Holger Way, San Jose, California 95134 for the following purposes:

More information about these business items is described in the proxy statement accompanying this notice. Any of the above matters may be considered at the Annual Meeting at the date and time specified above or at any adjournment or postponement of such meeting.

Your vote is important. Whether or not you plan to attend the meeting in person, it is important that your shares be represented. To ensure that your vote is counted at the meeting, please vote as soon as possible.

For Brocade’s Board of Directors,

Tyler Wall

Vice President, General Counsel and

Corporate Secretary

San Jose, California

February 20, 2013

TABLE OF CONTENTS

BROCADE COMMUNICATIONS SYSTEMS, INC.

PROXY STATEMENT FOR 2013 ANNUAL MEETING OF STOCKHOLDERS

Brocade’s Board of Directors (the “Board”) is providing these proxy materials to you for use in connection with the 2013 Annual Meeting of Stockholders to be held on April 11, 2013 at 2:00 p.m. Pacific Time, and at any postponement or adjournment of the meeting. The Annual Meeting will be held at our offices located at 130 Holger Way, San Jose, California 95134. Stockholders of record as of February 15, 2013 (the “Record Date”) are invited to attend the Annual Meeting and are asked to vote on the proposals described in this proxy statement.

The Notice of Internet Availability (the “Notice”) was first mailed on or about February 25, 2013 to stockholders of record as of the Record Date, and these proxy solicitation materials combined with the Annual Report on Form 10-K for the fiscal year ended October 27, 2012, including financial statements, were first made available to you on the Internet, on or about February 25, 2013. Our principal executive offices are located at 130 Holger Way, San Jose, California 95134, and our telephone number is (408) 333-8000. We maintain a website at www.brocade.com. The information on our website is not a part of this proxy statement.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS

AND OUR ANNUAL MEETING

We may also transact such other business that may properly come before the Annual Meeting or at any adjournment or postponement thereof.

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Registered Stockholders.    If your shares are registered directly in your name with Brocade’s transfer agent, you are considered the stockholder of record with respect to those shares, and the Notice was provided to you directly by Brocade. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote in person at the Annual Meeting.

Street Name Stockholders.    If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name and the Notice was forwarded to you by your broker or nominee, who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. If you request a printed copy of the proxy materials by mail, your broker or nominee will provide a voting instruction card for you to use.

By accessing the proxy materials on the Internet or choosing to receive your future proxy materials by email, you will save us the cost of printing and mailing documents to you and will reduce the impact of our annual stockholders’ meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. If you choose to receive future proxy materials by mail, you will receive a paper copy of those materials, including a form of proxy. Your election to receive proxy materials by mail or email will remain in effect until you notify us that you are terminating your request.

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Please note that the Internet and telephone voting facilities for registered stockholders will close at 11:59 PM Eastern Time on April 10, 2013.

Street Name Stockholders:    If your shares are held in a stock brokerage account or by a bank or other nominee, you should have received instructions on how to vote or instruct the broker to vote your shares from your broker, bank or other nominee. Please follow their instructions carefully. Also, please note that if the holder of record of your shares is a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must request a legal proxy from the bank, broker or other nominee that holds your shares and present that proxy and proof of identification at the Annual Meeting to vote your shares.

Street name stockholders may generally vote by one of the following methods:

By Mail.    If you requested printed copies of the proxy materials to be mailed to you, you may vote by signing, dating and returning your voting instruction card in the enclosed pre-addressed envelope;

By Methods Listed on Voting Instruction Card.    Please refer to your voting instruction card or other information provided by your bank, broker or other nominee to determine whether you may vote by telephone or electronically on the Internet, and follow the instructions on the voting instruction card or other information provided by the record holder; or

In Person With a Proxy from the Record Holder.    A street name stockholder who wishes to vote at the Annual Meeting will need to obtain a legal proxy from his or her broker, bank or other nominee. Please consult the voting instruction card provided to you by your broker, bank or other nominee to determine how to obtain a legal proxy in order to vote in person at the Annual Meeting.

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Each director is elected by a majority of the votes cast with respect to the nominee at the annual meeting (i.e., the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee), except in the case of a contested election. If a nominee who is currently serving as a director is not elected at the Annual Meeting, under Delaware law the director will continue to serve on the Board as a “holdover director.” However, as a condition to re-nomination, incumbent directors are required to submit a resignation of their directorships in writing to the Chairman of the Nominating and Corporate Governance Committee of the Board. The resignation will become effective only if the director fails to receive a majority of votes cast for re-election and the Board accepts the resignation. In the event of a contested election, in accordance with our bylaws, as amended (“Bylaws”), directors shall be elected by the vote of a plurality of the votes cast. Abstentions and broker non-votes will have no effect on the outcome of the vote.

Approval of the advisory resolution on executive compensation requires the approval of a majority of the shares represented in person or by proxy and entitled to vote at the Annual Meeting. Abstentions are treated as shares represented in person or by proxy and entitled to vote at the Annual Meeting and, therefore, will have the same effect as a vote “against” the proposal. Broker non-votes will have no effect on the outcome of the vote. However, because this is an advisory vote, the result will not be binding on the Company’s Board or the Company. The Board and/or the Compensation Committee will consider the outcome of the vote when making future compensation decisions for our named executive officers.

Approval of the amendment and restatement of the 2009 Director Plan and approval of the Performance Bonus Plan require the approval of a majority of the votes cast on the proposals at the Annual Meeting. For purposes of approval of the amendment and restatement of the 2009 Director Plan, abstentions are treated as a “vote cast” and therefore, will have the effect of a vote “against” the approval of the amendment and restatement of the 2009 Director Plan. However, abstentions will not be counted as a “vote cast” for purpose of approval of the Performance Bonus Plan and therefore, will have no effect on the outcome of the vote. Broker non-votes will have no effect on the outcome of the vote on either the vote for approval of the amendment and restatement of the 2009 Director Plan and approval of the Performance Bonus Plan.

The ratification of independent registered public accountants requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on such proposal. Abstentions are treated as shares present and entitled to vote for purposes of such proposal and, therefore, will have the same effect as a vote “against” the proposal. Broker non-votes will have no effect on the outcome of the vote.

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If you wish to receive a separate Notice, proxy statement or annual report at this time, please request the additional copy by contacting our transfer agent, Wells Fargo Shareowner Services, by telephone at 800-468-9716, or by facsimile at 651-450-4033. If any stockholders in your household wish to receive a separate annual report and a separate proxy statement in the future, they may call our Investor Relations group at 408-333-8000 or write to Investor Relations, Brocade Communications Systems, Inc., 130 Holger Way, San Jose, CA 95134. They may also send an email to our Investor Relations Group at investor-relations@brocade.com. Other stockholders who have multiple accounts in their names or who share an address with other stockholders can authorize us to discontinue mailings of multiple annual reports and proxy statements by calling or writing to Investor Relations.

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BOARD OF DIRECTORS MEETINGS AND COMMITTEES

The Board of Directors is presently composed of nine members: Judy Bruner, Lloyd A. Carney, Renato (Renny) A. DiPentima, Alan L. Earhart, John W. Gerdelman, David L. House, Glenn C. Jones, L. William Krause, and Sanjay Vaswani. Mr. House serves as Chairman of the Board of Directors. The Board of Directors has determined that each of the directors other than Mr. Carney is an independent director within the meaning set forth in the NASDAQ listing rules and as required by the rules and regulations of the SEC, as currently in effect. There are no family relationships between any director and an executive officer. Michael Klayko served as a director through fiscal year 2012 and resigned effective January 14, 2013 in connection with his resignation as the Company’s Chief Executive Officer.

The Board of Directors held ten meetings during fiscal year 2012. The Board also acted three times by unanimous written consent. Each director, other than Michael Klayko, attended at least 75% of the aggregate number of meetings of our Board of Directors and the committees on which such director served during fiscal year 2012. Mr. Klayko did not attend and was excused from three Board meetings as the purpose of those meetings was to discuss the search for a new chief executive officer. Mr. Carney joined the Board in fiscal year 2013.

Information about the Directors and Nominees

Set forth below is information regarding our directors and the nominees as of January 22, 2013:

Business Experience and Qualifications of Directors and Nominees

Judy Bruner has served as a director since January 2009. Ms. Bruner has been the Executive Vice President, Administration and Chief Financial Officer of SanDisk Corporation, a supplier of flash storage products, since June 2004. Ms. Bruner served as Senior Vice President and Chief Financial Officer of Palm, Inc., a provider of handheld computing and communications solutions, from September 1999 until June 2004. Prior to Palm, Inc., Ms. Bruner held financial management positions with 3Com Corporation, Ridge Computers and Hewlett-Packard Company. Ms. Bruner holds a B.A. degree in economics from the University of California, Los Angeles and an M.B.A. degree from Santa Clara University.

Ms. Bruner’s years of executive leadership and management experience in the high technology industry, her experience in the finance and accounting fields, and her more than four years of service as a director of Brocade make her an invaluable member of our Board of Directors.

Lloyd A. Carney was named Chief Executive Officer of Brocade in January 2013 and has served as a director since February 2013. Before joining Brocade, Mr. Carney served as chief executive officer and member of the board of directors of Xsigo Systems, a venture funded IO Virtualization Platform company, from January 2008 until it was acquired by Oracle Corporation in July 2012. He is also a member of the board of directors of

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Cypress Semiconductor Corporation where he serves as a member of the Audit Committee and the Compensation Committee, and the board of directors of Technicolor SA, where he serves as the chairman of that board’s Technology Committee. Mr. Carney holds a Bachelor of Science degree in Electrical Engineering Technology from Wentworth Institute and a Master of Science degree in Applied Business Management from Lesley College.

Mr. Carney’s nearly 30 years in the high-tech industry, including a number of senior leadership positions at various networking and semiconductor companies, his service on other public and private company boards and his service as Chief Executive Officer and a director of Brocade make him an invaluable member of our Board of Directors.

Renato (Renny) A. DiPentima has served as a director since January 2007 when he was appointed to the Board in connection with Brocade’s acquisition of McDATA Corporation. Dr. DiPentima is the retired President and Chief Executive Officer of SRA International, a provider of technology and strategic consulting services and solutions, where he served from January 2005 until March 2007. From November 2003 to January 2005, he served as SRA’s President and Chief Operating Officer. Prior to that, Dr. DiPentima served as Senior Vice President and President of SRA’s consulting and systems integration division since the division’s formation in January 2001. From July 1997 to January 2001, he served as President of SRA’s government sector, overseeing government business, projects, and contracts. From July 1995 to July 1997, Dr. DiPentima served as Vice President and as SRA’s Chief Information Officer. Prior to joining SRA, Dr. DiPentima held several senior management positions in the U.S. federal government, most recently serving as deputy commissioner for systems at the Social Security Administration, from May 1990 to June 1995. During the last five years, Dr. DiPentima also previously served as a director for the following public company: SRA International, Inc. Dr. DiPentima also serves on several governmental and corporate advisory boards. Dr. DiPentima received a B.A. degree from New York University, an M.A. degree from George Washington University and a Ph.D. degree from the University of Maryland. He has also completed the program for Senior Managers at the John F. Kennedy School of Government at Harvard University.

Mr. DiPentima’s years of executive leadership and management experience in the high technology industry, his service on other public company boards and committees, and his more than six years of service as a director of Brocade make him an invaluable member of our Board of Directors.

Alan L. Earhart has served as a director since February 2009. Mr. Earhart served as a member of the Board of Directors of Foundry Networks, Inc. from August 2003 until December 2008 when Foundry was acquired by Brocade. From 1970 until he retired in 2001, Mr. Earhart held a variety of positions with Coopers & Lybrand and its successor entity, PricewaterhouseCoopers LLP, an accounting and consulting firm, including most recently as the Managing Partner for PricewaterhouseCoopers’ Silicon Valley office. Mr. Earhart also currently serves as a director for the following public companies: Rovi Corporation (formerly Macrovision Solutions Corporation) and NetApp, Inc. (formerly Network Appliance, Inc.). During the last five years, Mr. Earhart also previously served as a director for the following public companies: Quantum Corporation and Monolithic Power Systems, Inc. Mr. Earhart received a B.S. degree in accounting from the University of Oregon.

Mr. Earhart’s years of executive leadership and management experience in the high technology industry, his experience in the finance and accounting fields, his service on other public company boards and committees, and his more than nine years of combined service as a director of Foundry and Brocade make him an invaluable member of our Board of Directors.

John W. Gerdelman has served as a director since January 2007 when he was appointed to the Board in connection with Brocade’s acquisition of McDATA Corporation. From January 2010 through April 2011, Mr. Gerdelman served as the president of Long Lines Wireless in Sioux City, Iowa. From 2004 through 2010, he was the Chairman of Intelliden Corporation, a company he co-founded that provides software solutions that enable networks to operate more intelligently by automating network change management and enforcing business policy in network operations. The company was sold to IBM. From April 2002 to December 2003,

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Mr. Gerdelman was the Chief Executive Officer for Metromedia Fiber Networks. From January 2000 until March 2002, Mr. Gerdelman worked with several new ventures as Managing Member of Mortonsgroup LLC. From April 1999 to December 1999, he served as the President and CEO of USA.NET. From 1986 until 1999, Mr. Gerdelman held various positions with MCI Communications Corporation in Sales, Marketing, Sales Operations, Network Operations and Information Technology, including President of the Network and Information Technology Division and served as CEO of Long Lines Limited, a startup call center company, and currently serves as a director and president. Before joining MCI, Mr. Gerdelman was with Baxter Travenol Corporation in Sales Operations and served in the U.S. Navy as a Naval Aviator. Mr. Gerdelman also serves as a director of the following public companies: Sycamore Networks, Inc., an optical switching company, and Owens & Minor, Inc., a national distributor of medical and surgical supplies and healthcare supply-chain management. During the last five years, he also served as a director for the following public companies: APAC Customer Services, Inc. and Proxim. He received his B.S. degree in chemistry from the College of William and Mary, where he now serves as Chairman of their Real Estate Foundation.

Mr. Gerdelman’s years of executive leadership and management experience in the high technology industry, his experience in the finance and accounting fields, his service on other public company boards and committees, and his more than six years of service as a director of Brocade make him an invaluable member of our Board of Directors.

David L. House has served as a director since 2004 and as the Chairman of our Board of Directors since December 2005. From January 2005 through December 2005, he served as Executive Chairman of the Board. Mr. House served as Chairman and Chief Executive Officer of Allegro Networks, a privately held provider of network routing equipment, from January 2001 until April 2003. Prior to that, he served as President of Nortel Networks Corp. from August 1998 until August 1999. Mr. House joined Nortel Networks Corp. when it was merged with Bay Networks, Inc., where he served as Chairman of the Board, President and Chief Executive Officer from October 1996 until August 1998. Mr. House served in senior management positions at Intel Corporation for 23 years. During the last five years, Mr. House also previously served as a director for the following public company: Credence Systems Corporation. Mr. House received a B.S.E.E. degree from Michigan Technological University and an M.S.E.E. degree from Northeastern University.

Mr. House’s years of executive leadership and management experience in the high technology industry and his more than nine years of service as a director of Brocade make him an invaluable member of our Board of Directors.

Glenn C. Jones has served as a director since April 2006. Mr. Jones has served as a business consultant to technology companies since 1998. Mr. Jones previously served as Chief Financial Officer of Cirrus Logic, Inc. as well as Chief Financial Officer of PMC-Sierra, Inc. Prior to these public company roles, he was Chief Financial Officer for Metaphor Computer Systems, Inc., a privately held company, and served as General Manager of Metaphor’s computer systems business which was acquired by IBM Corporation. He also was the founding Chief Financial Officer and Vice President of Operations for Gain Computer Systems, which was acquired by Sybase Corp. Mr. Jones, a Certified Public Accountant, received a B.S. degree in accounting from the University of Illinois and an M.B.A. from Golden Gate University.

Mr. Jones’s years of executive leadership and management experience in the high technology industry, his experience in the finance and accounting fields, and his more than six years of service as a director of Brocade make him an invaluable member of our Board of Directors.

L. William Krause has served as a director since 2004. Mr. Krause has been President of LWK Ventures, a private investment firm since 1991. In addition, Mr. Krause served as Chairman of the Board of Caspian Networks, Inc., an IP networking systems provider, from April 2002 to September 2006 and as CEO from April 2002 until June 2004. From September 2001 to February 2002, Mr. Krause was Chairman and Chief Executive Officer of Exodus Communications, Inc. He also served as President and Chief Executive Officer of 3Com Corporation, a global data networking company, from 1981 to 1990, and as its Chairman from 1987 to 1993

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when he retired. Mr. Krause currently serves as director for the following public companies: Coherent, Inc., a leading supplier of Photonic-based systems, and Core-Mark Holdings, Inc., a distributor of packaged consumer goods. Mr. Krause also serves as a director of CommScope, a privately held networking infrastructure company. During the last five years, Mr. Krause also previously served as a director for the following public companies: Packeteer, Inc., Sybase, Inc. and TriZetto Group, Inc. Mr. Krause holds a B.S. degree in electrical engineering and received an honorary doctorate of science from The Citadel.

Mr. Krause’s years of executive leadership and management experience in the high technology industry, his service on other public company boards and committees, and his more than eight years of service as a director of Brocade make him an invaluable member of our Board of Directors.

Sanjay Vaswani has served as a director since April 2004. Mr. Vaswani has been a managing partner of the Center for Corporate Innovation, Inc., a professional services firm, since 1990. From 1987 to 1990 he was with McKinsey & Company. Prior to that, Mr. Vaswani was employed by Intel Corporation. Mr. Vaswani serves as a director of Blue Star Infotech Ltd., an Indian publicly traded software services firm. Mr. Vaswani earned a B.B.A. degree from the University of Texas at Austin and an M.B.A. degree from the Wharton School of Business at the University of Pennsylvania.

Mr. Vaswani’s years of executive leadership and management experience in the high technology industry, his service on other public company boards, and his more than eight years of service as a director of Brocade make him an invaluable member of our Board of Directors.

Former Directors Not Standing for Election

Michael Klayko served as our Chief Executive Officer and as a director from January 2005 until his resignation from those positions effective as of January 14, 2013. Prior to that, he served as Vice President, Worldwide Sales from May 2004 until January 2005. From April 2003 until May 2004, Mr. Klayko served as Vice President, Worldwide Marketing and Support, and from January 2003 until April 2003, he was Vice President, OEM Sales. From May 2001 to January 2003, Mr. Klayko was Chief Executive Officer and President of Rhapsody Networks, a privately held technology company acquired by Brocade. From December 1998 to April 2001, Mr. Klayko served as Executive Vice President of McDATA Corporation. From March 1995 to November 1998, Mr. Klayko was Senior Vice President for North American Sales at EMC Corporation, a provider of information storage systems products. Mr. Klayko also held various executive sales and marketing positions at Hewlett-Packard Company and IBM Corporation. Mr. Klayko also currently serves as a director of the following public company: PMC Sierra, Inc., a semiconductor company. Mr. Klayko received a B.S. degree in electronic engineering technology from Ohio Institute of Technology.

Committees of the Board of Directors

The Board of Directors has the following standing committees: Audit, Compensation, Nominating and Corporate Governance, and Corporate Development. The Board of Directors has adopted a written charter for each of these committees, copies of which can be found on our website at www.brocade.com in the Corporate Governance section of our investor relations webpage. The Board of Directors has determined that all members of each committee of the Board of Directors are independent under the applicable rules and regulations of NASDAQ and the SEC, as currently in effect, except Mr. Carney, who serves as chairman of our Corporate Development Committee. Prior to his resignation, Mr. Klayko served as chairman of our Corporate Development Committee.

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The following chart details the membership of each standing committee for fiscal year 2012 and the number of meetings each committee held in fiscal year 2012.

M = Member

C = Chair

Audit Committee

The Audit Committee oversees our accounting, financial reporting and audit processes; appoints, determines the compensation of, and oversees, the independent registered public accountants; pre-approves audit and non-audit services provided by the independent registered public accountants; reviews the results and scope of audit and other services provided by the independent registered public accountants; reviews the accounting principles and practices and procedures used in preparing our financial statements; oversees the Company’s internal audit function; and reviews our internal controls.

The Audit Committee works closely with management and our independent registered public accountants. The Audit Committee also meets with our independent registered public accountants without members of management present, on a quarterly basis, following completion of our independent registered public accountants’ quarterly reviews and annual audit and prior to our earnings announcements, to review the results of their work. The Audit Committee also meets with our independent registered public accountants to approve the annual scope and fees for the audit services to be performed.

The Nominating and Corporate Governance Committee has determined that each of Ms. Bruner and Messrs. Earhart, Jones and Gerdelman is an “audit committee financial expert” as defined by SEC rules, as currently in effect.

The Audit Committee Report is included in this proxy statement on page 63. A copy of the Audit Committee’s written charter is available on our website at www.brocade.com in the Corporate Governance Section of our investor relations webpage.

Compensation Committee

The Compensation Committee has overall responsibility for (i) overseeing the Company’s compensation and benefits policies generally; (ii) overseeing, evaluating and approving executive officer and director compensation plans, policies and programs; and (iii) reviewing, and discussing with management, the Compensation Discussion and Analysis section of the Company’s annual proxy statement and preparing the Compensation Committee Report that is required by SEC rules to be included in the Company’s annual proxy statement.

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The Compensation Committee Report is included herein on page 52. A copy of the Compensation Committee’s written charter is available on our website at www.brocade.com in the Corporate Governance section of our investor relations webpage.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee (i) considers and periodically reports on matters relating to the identification, selection and qualification of the Board of Directors and candidates nominated to the Board of Directors and its committees; (ii) develops and recommends governance principles applicable to Brocade; (iii) oversees the evaluation of the Board of Directors and management from a corporate governance perspective; and (iv) reviews Brocade’s reporting in documents filed with the SEC to the extent related to corporate governance.

A copy of the Nominating and Corporate Governance Committee’s written charter is available on our website at www.brocade.com in the Corporate Governance section of our investor relations webpage.

Stockholder Recommendations.    The Nominating and Corporate Governance Committee considers properly submitted stockholder recommendations for candidates for membership on the Board of Directors as described below under “Identification and Evaluation of Nominees for Directors.” In evaluating such recommendations, the Nominating and Corporate Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board of Directors and to address the membership criteria set forth under “Director Qualifications.” Any stockholder recommendations submitted for consideration by the Nominating and Corporate Governance Committee should be in writing and should include the candidate’s name and qualifications for membership on the Board of Directors and should be addressed to the attention of our Corporate Secretary. In addition, procedures for stockholder direct nomination of directors are discussed in the section titled “Questions and Answers about the Proxy Materials and our Annual Meeting,” and are discussed in detail in our Bylaws, a copy of which is available on the SEC’s EDGAR website and on the investor relations section of our website at www.brocade.com.

Director Qualifications.    The Nominating and Corporate Governance Committee has not formally established any specific, minimum qualifications that must be met by a Nominating and Corporate Governance Committee-recommended nominee, but uses a variety of criteria to evaluate the qualifications and skills necessary for members of our Board of Directors, including, among others, independence, diversity, skills and experience. Under these criteria, members of the Board of Directors should have the highest professional and personal ethics and values. A director should have broad experience at the policy-making level in business, government, education, technology or public interest. A director should be committed to enhancing stockholder value and should have sufficient time to carry out his or her duties, and to provide insight and practical wisdom based on their past experience. A director’s service on other boards of public companies should be limited to a number that permits him or her, given his or her individual circumstances, to perform responsibly his or her director duties, but no director should serve on more than four additional public company boards. Each director must represent the interests of Brocade stockholders.

Identification and Evaluation of Nominees for Directors.    The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Nominating and Corporate Governance Committee regularly assesses the appropriate size of the Board of Directors, and whether any vacancies on the Board of Directors are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Nominating and Corporate Governance Committee through current members of the Board of Directors, professional search firms, stockholders or other persons. These candidates are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee, and may be considered at any point during the year. The Nominating and Corporate Governance Committee considers properly submitted stockholder recommendations for candidates for the Board of Directors. In evaluating such recommendations, the Nominating and Corporate Governance Committee uses the qualifications standards discussed above and seeks to achieve a balance of knowledge, experience and capability on the Board of Directors.

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Majority Voting.    Effective following our 2008 Annual Meeting of Stockholders, we implemented majority voting for directors. As a condition to re-nomination, each incumbent director is required to submit a resignation of his or her directorship in writing to the Chairman of the Nominating and Corporate Governance Committee of the Board. The resignation will become effective only if the director fails to receive a sufficient number of votes for re-election at the meeting of stockholders, as described in the Company’s Bylaws, as amended, and the Board accepts the resignation. The Board will publicly disclose its decision regarding the acceptance or rejection of the resignation and the rationale behind it within 90 days from the date of the certification of the election results.

Corporate Development Committee

The Corporate Development Committee works with management to review, consider and consult on potential strategic investment transactions that are consistent with the Company’s strategy. The Corporate Development Committee has the authority to approve certain transactions; and for certain other transactions, the Corporate Development Committee submits a recommendation to the Board of Directors for its consideration, all as described in the Corporate Development Committee’s charter.

A copy of the Corporate Development Committee’s written charter is available on our website at www.brocade.com in the Corporate Governance section of our investor relations webpage.

Compensation Committee Interlocks and Insider Participation

During fiscal year 2012, Messrs. DiPentima, House, Krause and Vaswani served as members of the Compensation Committee. No member of the Compensation Committee during fiscal 2012 was an officer or employee of Brocade. In addition, no member of the Compensation Committee or executive officer of Brocade served as a member of the Board of Directors or Compensation Committee of any entity that has an executive officer serving as a member of our Board of Directors or Compensation Committee.

Annual Meeting Attendance

We do not have a formal policy regarding attendance by members of the Board of Directors at our annual meetings of stockholders although directors are encouraged to attend annual meetings of Brocade stockholders. All members of the Board of Directors on the date of the 2012 Annual Meeting of Stockholders attended that meeting, either in person or via teleconference. Mr. Carney was not a member of the Board of Directors in 2012.

Communications with the Board of Directors

Although we do not have a formal policy regarding communications with the Board of Directors, stockholders may communicate with the Board of Directors by submitting an email to investor-relations@brocade.com or by writing to us at Brocade Communications Systems, Inc., Attention: Investor Relations, 130 Holger Way, San Jose, California 95134. Stockholders who would like their submission directed to a particular member of the Board of Directors may so specify. All communications will be reviewed by the General Counsel or Vice President of Investor Relations. All appropriate business-related communications as reasonably determined by the General Counsel or Vice President of Investor Relations will be forwarded to the Board of Directors or, if applicable, to the individual director.

Code of Ethics

The Board of Directors has adopted a Code of Ethics for Principal Executive and Senior Financial Officers (the “Code of Ethics”), which applies to our Chief Executive Officer, Chief Financial Officer and any other principal financial officer, Controller and any other principal accounting officer, and any other person performing similar functions. The Code of Ethics is posted on our website at www.brocade.com in the Corporate Governance section of our investor relations webpage. Brocade will disclose any amendment to the Code of Ethics or waiver of a provision of the Code of Ethics that applies to the Company’s Chief Executive Officer, Chief Financial Officer and any other principal financial officer, Controller and any other principal accounting officer, and any

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other person performing similar functions and relates to certain elements of the Code of Ethics, including the name of the officer to whom the waiver was granted, on our website at www.brocade.com, on our investor relations webpage.

Board Leadership and the Board’s Role in Risk Oversight

The Board of Directors believes in the value of an independent board of directors. Currently, eight of the nine members of the Board of Directors are independent. This includes all members of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Brocade’s Chairman of the Board of Directors is also independent and maintains a separate role from the Chief Executive Officer. The Board believes this structure benefits the Board and the Company by enabling the Chief Executive Officer to focus on operational and strategic matters while enabling the Chairman to focus on Board process and governance matters. The independent members of the Board of Directors also meet regularly without management present.

Brocade believes that risk is inherent in innovation and the pursuit of long-term growth opportunities. Brocade’s management is responsible for day-to-day risk management activities. The Board of Directors, acting directly and through its committees, is responsible for the oversight of Brocade’s risk management. With the oversight of the Board of Directors, Brocade has implemented practices and programs designed to help manage the risks to which we are exposed in our business and to align risk-taking appropriately with our efforts to increase shareholder value. As an example of one such program, Brocade has implemented an enterprise risk management (“ERM”) program to identify, assess, govern and manage risks and Brocade’s response to those risks. The structure of the ERM program includes regular reviews by members of senior management. The Audit Committee receives regular reports on ERM. In addition, as part of the overall risk oversight framework, other committees of the Board of Directors also oversee certain categories of risk associated with their respective areas of responsibility. For example, the Compensation Committee oversees compensation-related risk management, as discussed further under “Compensation Discussion and Analysis” on page 36.

Director Compensation

The following tables provide information about the compensation earned by non-employee directors who served during the 2012 fiscal year. Non-employee director cash and equity compensation is determined by the Compensation Committee. Independent, outside consultants meet with and provide recommendations of the form and amounts of compensation for non-employee directors to the Compensation Committee. Directors who are Brocade employees do not receive compensation for their services as a director.

2012 Compensation of Non-Employee Directors

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Cash Compensation.    Our directors play a critical role in guiding the Company’s strategic direction and overseeing the management of the Company. The increased demand for qualified and talented public company directors requires that we provide adequate incentives for our directors’ continued performance and participation. In fiscal 2012, each non-employee member of the Board received the fees as set forth below for his or her service on the Board and each committee of the Board. The cash compensation for Board and committee service was revised in fiscal 2012. In fiscal 2012, the Compensation Committee asked Compensia, the Compensation Committee’s independent compensation advisor, to review the Board members’ remuneration and equity grants. Compensia provided the Compensation Committee a review of the Board directors’ compensation program, including industry trends, developments and competitive analysis and recommended the Compensation Committee revise the cash compensation for non-employee directors. The methodology Compensia used for assessing Board compensation practices compared Brocade’s Board compensation program against the peer group compensation by reviewing Brocade’s positioning for each element of Board compensation (i.e., cash and equity compensation for general Board service and compensation for committee members and chairs) as well as comparing average director compensation and the total cost of the Board compensation program between Brocade and the peers. The Compensation Committee approved the recommendation to revise the cash compensation for non-employee directors effective at the beginning of the fourth quarter of fiscal 2012, subject to review and approval by the Board. The recommendations were approved by the Board and became effective beginning July 29, 2012.

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Additional fees per Board and committee meeting in person or by telephone:

We are also authorized to reimburse directors for expenses in connection with attendance at meetings.

Equity Compensation.    Non-employee directors also participate in the Company’s 2009 Director Plan (the “2009 Director Plan”), which provide for automatic option grants and awards of restricted stock units (each an “RSU”) to non-employee directors for their service to the Company. Only non-employee directors may participate in the 2009 Director Plan.

Stock Options.    Under the 2009 Director Plan, each non-employee director is entitled to receive the following automatic, non-discretionary grants of options:

All options have a term of 7 years under the 2009 Director Plan. The exercise price of options granted under the 2009 Director Plan is 100 percent of the fair market value of the Common Stock on the date of grant, as determined by reference to the closing sales price of the Company’s Common Stock as reported on the Nasdaq Global Select Market on the date of grant.

In the event of a change in control, as defined under the 2009 Director Plan, if the option is not assumed or substituted in the applicable transaction, each option granted under the 2009 Director Plan becomes fully vested and exercisable. In such event, the option holder shall be notified that the option will be fully exercisable for a period of 30 days from the date of the notice. Upon expiration of the 30-day period, the option shall terminate. If the option is assumed or substituted, and the option holder’s status as a director of Brocade or the successor corporation, as applicable, is terminated other than upon a voluntary resignation by such option holder, the option shall be accelerated and become fully exercisable with respect to all shares.

Options granted under the 2009 Director Plan may be exercised within 3 months following the date a director’s board service terminates, or within 12 months if termination of service was due to death or disability, but only to the extent that the director was entitled to exercise the option on the date of termination. If an option is not exercised within such 3 or 12-month time period, as applicable, the option shall terminate. In any event, a director may not exercise any option later than the expiration of the applicable term.

If Brocade’s stockholders approve proposal number three at the Annual Meeting to amend and restate the 2009 Director Plan, then the Board does not currently intend to grant stock options to new or continuing non-employee directors under the 2009 Director Plan. For details of the proposal to amend and restate the 2009 Director Plan, see proposal number three in this proxy statement.

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RSUs.    Under the 2009 Director Plan, each non-employee director is entitled to receive the following automatic, non-discretionary awards of RSUs (in addition to the grant of options described above):

If Brocade’s stockholders approve proposal number three at the Annual Meeting to amend and restate the 2009 Director Plan, then each non-employee director would instead be entitled to receive the following automatic, non-discretionary awards of RSUs:

For details of the proposal to amend and restate the 2009 Director Plan, see proposal number three in this proxy statement.

In addition to the grants above, the Chairman of the Board is entitled to receive an automatic grant at each annual stockholders meeting of 5,000 RSUs under the Company’s 2009 Stock Plan (the “2009 Stock Plan”). The RSUs will vest in their entirety at the following stockholders annual meeting.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of our Common Stock as of February 15, 2013 as to (i) each person who is known by us to own beneficially more than 5% of our outstanding Common Stock, (ii) each of the executive officers and other persons named in the Summary Compensation Table, (iii) each director and nominee for director, and (iv) all directors and executive officers as a group. Unless otherwise indicated, the address of each listed stockholder is c/o Brocade Communications Systems, Inc., 130 Holger Way, San Jose, California 95134.

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FMR LLC has the power to vote or dispose of the shares as follows:

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PROPOSAL ONE:

ELECTION OF DIRECTORS

Our Board of Directors currently consists of nine directors. At the 2013 Annual Meeting, all nine directors will be elected for a one year term expiring at the 2014 Annual Meeting.

Nominees

The Nominating and Corporate Governance Committee of the Board of Directors recommended, and the Board of Directors approved, Judy Bruner, Lloyd A. Carney, Renato DiPentima, Alan Earhart, John W. Gerdelman, David L. House, Glenn C. Jones, L. William Krause and Sanjay Vaswani as nominees for election at the Annual Meeting to the Board of Directors. If elected, each of Judy Bruner, Lloyd A. Carney, Renato DiPentima, Alan Earhart, John W. Gerdelman, David L. House, Glenn C. Jones, L. William Krause and Sanjay Vaswani will serve as directors until our annual meeting in 2014, and until a successor is qualified and elected or until his or her earlier resignation or removal. Each of the nominees is currently a director of the Company. Mr. Carney was appointed to the Board of Directors by the Board of Directors in February 2013 in connection with his appointment as Chief Executive Officer. The Nominating and Corporate Governance Committee of the Board of Directors has recommended him as a nominee for election at the Annual Meeting to the Board of Directors. Please see “Business Experience and Qualifications of Directors and Nominees” on page 7 of this Proxy Statement for information concerning our incumbent directors standing for re-election.

Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR each of Judy Bruner, Lloyd A. Carney, Renato DiPentima, Alan Earhart, John W. Gerdelman, David L. House, Glenn C. Jones, L. William Krause and Sanjay Vaswani. If the nominees are unable or decline to serve as a director at the time of the Annual Meeting, the proxies will be voted for another nominee designated by the Board of Directors. We are not aware of any reason that a nominee would be unable or unwilling to serve as a director.

Vote Required

Provided a quorum is present, directors are elected by a majority of the votes cast with respect to the nominee at the annual meeting (i.e., the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee), except in the case of a contested election. If a nominee who is currently serving as a director is not elected at the Annual Meeting, under Delaware law the director will continue to serve on the Board as a “holdover director.” However, as a condition to re-nomination, each incumbent director is required to submit a resignation from the Board in writing to the Chairman of the Nominating and Corporate Governance Committee of the Board. The resignation will become effective only if the director fails to receive a majority of votes cast for re-election and the Board accepts the resignation. In the event of a contested election in accordance with our Bylaws, directors shall be elected by the vote of a plurality of the votes cast.

Abstentions and broker non-votes will have no effect on the election of directors.

The Board of Directors unanimously recommends that stockholders vote “FOR” the election of each of Judy Bruner, Lloyd A. Carney, Renato DiPentima, Alan Earhart, John W. Gerdelman, David L. House, Glenn C. Jones, L. William Krause and Sanjay Vaswani.

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PROPOSAL TWO:

ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION

Executive compensation is an important matter for Brocade and our stockholders. This proposal provides Brocade’s stockholders with the opportunity to cast an advisory vote on executive compensation.

The core of Brocade’s executive compensation philosophy and practice continues to be based on a pay-for-performance philosophy. Brocade’s executive officers are compensated in a manner consistent with Brocade’s strategy, competitive practice, corporate governance principles we believe to be sound, and stockholder interests and concerns. We believe our compensation program is strongly aligned with the long-term interests of our stockholders.

We urge you to carefully read the Compensation Discussion and Analysis (“CD&A”) section of this proxy statement for additional details on Brocade’s executive compensation, including Brocade’s compensation philosophy and objectives and the 2012 compensation of the named executive officers.

The following highlights key aspects of executive compensation with respect to our named executive officers in fiscal year 2012:

Burn rate is defined as the number of equity awards granted in the year, divided by total shares outstanding. Adjusted burn rate includes a premium applied to full value shares (e.g., RSUs and PSUs) consistent with Institutional Shareholder Services (ISS) policy. Overhang is defined as the number of outstanding options and equity awards, divided by total shares outstanding. For burn rate, adjusted burn rate and overhang, the amounts for fiscal 2012 include the grants made in the final week of fiscal 2011 to the named executive officers and other vice presidents of the Company as those grants were made as part of the compensation package for fiscal 2012.

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Based on the above and pursuant to section 14A of the Securities Exchange Act of 1934, as amended, we request that stockholders approve the compensation of Brocade’s named executive officers as described pursuant to the disclosure rules of the Securities and Exchange Commission pursuant to the following advisory resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis” section, compensation tables and narrative discussion, is hereby APPROVED.

Vote Required

Approval of the advisory resolution on executive compensation requires the approval of a majority of the shares represented in person or by proxy and entitled to vote at the Annual Meeting. Abstentions are treated as shares represented in person or by proxy and entitled to vote at the Annual Meeting and, therefore, will have the same effect as a vote “Against” the proposal. Broker non-votes will have no effect on the outcome of the vote.

As an advisory vote, this proposal is non-binding. Although the vote is non-binding, the Board of Directors and the Compensation Committee value the opinions of our stockholders, and will consider the outcome of the vote when making future compensation decisions for our named executive officers. We hold such advisory votes on executive compensation each year, and will hold another advisory vote at our 2014 Annual Meeting of Stockholders.

The Board of Directors recommends that stockholders vote “FOR” the advisory resolution to approve executive compensation.

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PROPOSAL THREE:

APPROVAL OF AMENDED AND RESTATED 2009 DIRECTOR PLAN

We are asking stockholders to approve an amended and restated 2009 Director Plan (the “Director Plan”). The Director Plan is intended to attract and retain the best available highly qualified individuals to serve as nonemployee directors of the Company, to provide additional incentive to the nonemployee directors to achieve the Company’s objectives, and to encourage these highly qualified individuals to continue their service on the Board.

The Director Plan originally was approved by stockholders at our 2009 Annual Meeting. Our Board of Directors (the “Board”) has approved an amended and restated Director Plan, subject to approval of stockholders at the 2013 Annual Meeting of Stockholders. If stockholders approve the Director Plan, it will replace the version of the Director Plan that was approved at the 2009 Annual Meeting. If stockholders do not approve the amended and restated Director Plan, we will continue to use the version of the Director Plan that was approved in 2009. Approval of the Director Plan requires the affirmative vote of the holders of a majority of shares present, in person or by proxy, and entitled to vote at the Annual Meeting.

Changes in the Amended and Restated Director Plan

The following is a summary of the material changes that are contained in the amended and restated Director Plan, as compared to the version of the Director Plan that was approved by stockholders at the 2009 Annual Meeting. Please also read the summary of the principal features of the amended and restated Director Plan below.

The following paragraphs provide a summary of the principal features of the Director Plan and its operation. The Director Plan is set forth in its entirety as Appendix A to this Proxy Statement. The following summary is qualified in its entirety by reference to Appendix A.

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Description of the 2009 Director Plan

General.    The Director Plan permits the grant of stock options and restricted stock units (each, an “Award”). Only directors who are not employed by the Company or any parent or subsidiary are eligible to receive Awards under the Director Plan. As of February 15, 2013, eight directors were eligible to participate in the Director Plan. The number of individuals who are eligible to receive Awards in the future will depend on the number of nonemployee directors who are members of our Board.

Number of Shares of Common Stock Available Under the Director Plan.    At the 2009 Annual Meeting, stockholders approved reserving a total of 2,000,000 shares of our common stock for issuance under the Director Plan, plus any shares subject to stock options or similar awards granted under the now expired 1999 Director Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the 1999 Director Plan that are forfeited to or repurchased by the Company. However, the maximum number of shares that may be added to the Director Plan from the 1999 Director Plan was 870,000 shares. The shares issuable under the Director Plan may be authorized, but unissued, or reacquired common stock. As of February 7, 2013, 923,100 shares remained available for grant under the Director Plan.

Shares subject to Awards of RSUs count against the share reserve as 1.56 shares for every share subject to such an Award. To the extent that a share that was subject to a RSU is returned to the Director Plan, the Director Plan reserve will be credited with 1.56 shares that will thereafter be available for issuance under the Director Plan.

Accordingly, assuming that the Director Plan is approved at the Annual Meeting, and that eight nonemployee directors each receive a grant of 25,000 RSUs, the pool of shares under the Director Plan would be reduced by 312,000 shares (calculated as 8 x 25,000 x 1.56). If all of these RSUs actually vest, the pool of shares remaining under the Director Plan would be 603,000. Depending on future circumstances, , the Company may need to seek additional shares for the Plan at the 2015 Annual Meeting (or possibly at the 2014 Annual Meeting). The timing of seeking stockholder approval for additional shares under the Director Plan cannot be predicted with certainty because the rate at which the available shares may be used depends on a number of factors, including (but not limited to) the number of new and continuing nonemployee members on the Board, the formula for making future awards under the Director Plan (for example, the number and type of Awards granted), whether the Awards that are granted actually vest, and whether any granted options are exercised. It is possible that granting 25,000 RSUs to each continuing nonemployee director (as opposed to the 20,000 options and 10,000 RSUs provided under the version of the Director Plan that was approved at the 2009 Annual Meeting) may result in the pool of shares available under the amended and restated Director Plan being exhausted earlier. By way of illustration and as indicated above, if 25,000 RSUs are granted to eight nonemployee directors and all of the RSUs vest, the pool of shares under the Director Plan would be reduced by 312,000 shares. If eight nonemployee directors instead received 20,000 options and 10,000 RSUs, and all of the Awards vest (with all options being exercised for cash), the pool of shares under the Director Plan would be reduced by 284,800 shares (calculated as (8 x 20,000) + (8 x 10,000 x 1.56)).

If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to RSUs, is forfeited to or repurchased by the Company, the unpurchased shares (or for RSUs, the forfeited or repurchased shares) will become available for future grant or sale under the Director Plan (unless the Director Plan has terminated). Shares that have actually been issued under the Director Plan under any Award will not be returned to the Director Plan and will not become available for future distribution under the Director Plan, except that if shares issued pursuant to a RSU are repurchased by the Company or forfeited to the Company, such shares will become available for future grant under the Director Plan. Shares used to pay the exercise price of an Award or satisfy the tax withholding obligations related to an Award will not become available for future grant or sale under the Director Plan.

If we increase or decrease the number of issued shares of common stock by means of a stock split, reverse stock split, stock dividend, combination or reclassification of the common stock, or any other increase or

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decrease in the number of issued Shares effected without receipt of consideration by the Company, subject to any required action by stockholders, the number of shares covered by each outstanding Award, the number of shares available for issuance under the Director Plan and the price per share covered by each outstanding Award will be proportionately adjusted.

Administration of the Director Plan.    The Director Plan is administered by the Compensation Committee. The Compensation Committee has all authority and discretion necessary or appropriate to make determinations and rules under the Director Plan.

Options.    The Director Plan permits the grant of stock options to eligible directors. However, until otherwise determined by the Board or Compensation Committee, no options will be granted under the Director Plan. The exercise price of any options granted under the Director Plan will be equal to the fair market value of our common stock on the date of grant. The term of these options will be no longer than seven years from the date of grant. After a termination of service with us, a participant will be able to exercise his or her option for (a) three months following his or her termination for reasons other than death or disability, or (b) 12 months following his or her termination due to death or disability, but in all cases no later than the expiration of its seven year term.

Restricted Stock Units.    RSUs result in a payment of shares to a participant if the vesting criteria specified by the Compensation Committee are satisfied. Under the Director Plan, each new nonemployee director (that is, a nonemployee director who previously was not on the Board) automatically will be granted 50,000 RSUs on the date on which he or she first becomes a nonemployee director, whether through election by the stockholders or appointment by the Board to fill a vacancy. A director who is also an employee will not be granted these restricted stock units even if that director ceases to be an employee but remains a director. This initial grant of restricted stock units will vest and become payable as to 1/3 of the shares subject to this grant on the 1 year anniversary of the date of grant, and as to 1/3 of the shares subject to this grant at each anniversary thereafter, so that the restricted stock units from the initial grant will be fully vested and become payable in full 3 years after its date of grant, provided that such person continues to serve as a director on such dates.

Beginning with the 2013 Annual Meeting, each nonemployee director who is continuing in service (that is, who is not a new nonemployee director) automatically will be granted 25,000 RSUs annually on the date of the Annual Meeting. To receive this grant, the nonemployee director must have served as such prior to the Annual Meeting and must be continuing in service at and immediately following such Annual Meeting. Each such grant of restricted stock units will vest and become payable as to 100% of the shares subject to the grant on the earlier of the 1 year anniversary of the date of grant or the next Annual Meeting, but only if such person continues to serve as a director on the vesting date. The Director Plan provided that the grant size for a continuing nonemployee director may be reduced in certain circumstances if the nonemployee director has not served as such for the entire period of time since the date of the immediately prior Annual Meeting.

Granting only RSUs under the Director Plan (commencing with the 2013 Annual Meeting) was recommended by the Compensation Committee and approved by the Board, subject to stockholder approval. As described above, in the version of the Director Plan approved by stockholders at the 2009 Annual Meeting, nonemployee directors were granted both RSUs and nonqualified stock options.

In making its recommendation to change the Director Plan to provide, for the time being, only for the grant of RSUs, the Compensation Committee considered a study from Compensia, the Compensation Committee’s independent compensation consultant. The study indicated that 70% of the companies in our executive compensation peer group grant only RSUs to their nonemployee directors. (See the Compensation Discussion & Analysis section of this proxy statement for information on the peer group.)

Transferability of Awards.    Awards granted under the Director Plan are generally not transferable, and all rights with respect to an Award granted to a participant generally will be available during a participant’s lifetime only to the participant.

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Merger or Change in Control.    In the event of a merger or change in control of the Company, each outstanding Award may be assumed or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Award, the participant will fully vest in and have the right to exercise all of his or her outstanding options, including shares as to which such Awards would not otherwise be vested or exercisable, and all restricted stock units will fully vest. In addition, if an option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a change of control, the Board will notify the participant in writing or electronically that the option will be fully vested and exercisable for a period of 30 days from the date of such notice, and the option will terminate upon the expiration of such period.

Amendment and Termination of the Director Plan.    The Board and the Compensation Committee have the authority to amend or terminate the Director Plan at any time and for any reason. This amendment authority includes (but is not limited to) the authority (without further stockholder approval) to change the number, type and terms of Awards granted in the future. Stockholder approval will be required for any amendment to the Director Plan to the extent that the Board or the Compensation Committee determines that such approval is required by any applicable laws. The Director Plan will terminate in 2019, unless the Board decides to terminate the Plan prior to that time.

Value of Awards to Directors.    The following table sets forth (a) the aggregate number of Awards that are expected to be received by the Company’s nonemployee directors as a group on the date of the 2013 Annual Meeting, assuming the Director Plan is approved by stockholders, and (b) the average per share exercise price or dollar value of such awards. The actual number and value of Awards to any director in any year cannot be known in advance because the formula for granting Awards may change. However, as explained above, in no event may any director receive Awards with a value greater than $750,000 in any fiscal year of the Company. Our nonemployee directors have an interest in this proposal because they are eligible to receive Awards under the Director Plan.

Eligibility Under 2009 Stock Plan

Nonemployee directors also are eligible to receive equity-based compensation awards under the Company’s 2009 Stock Plan, which last was approved by our stockholders at the Annual Meeting in 2012.

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Federal Tax Aspects

The following paragraphs are a summary of the general federal income tax consequences to U.S. taxpayers and to the Company of Awards granted under the Director Plan. Tax consequences for any particular individual may be different.

Stock Options.    All options granted under the Director Plan are nonqualified stock options (not incentive stock options). No taxable income is reportable when a nonqualified stock option with an exercise price equal to the fair market value of the underlying stock on the date of grant is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the excess of the fair market value (on the exercise date) of the shares purchased over the exercise price of the option. Any taxable income recognized in connection with an option exercise by an employee of the Company is subject to tax withholding by the Company. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.

Restricted Stock Units.    A participant generally will not have taxable income at the time an Award of restricted stock units is granted. Instead, he or she generally will recognize ordinary income in the first taxable year in which his or her interest in the shares becomes vested.

Tax Effect for the Company.    The Company generally will be entitled to a tax deduction in connection with an Award under the Director Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income.

Vote Required

Approval of the amendment and restatement of the 2009 Director Plan requires the approval of a majority of the votes cast on the proposal at the Annual Meeting. For purpose of this proposal, abstentions will have the effect of a vote “against” the approval of the amendment and restatement of the 2009 Director Plan. Broker non-votes will have no effect on the outcome of the vote.

The Board of Directors unanimously recommends that stockholders vote “FOR” the approval of the amendment and restatement of the 2009 Director Plan.

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PROPOSAL FOUR:

APPROVAL OF THE PERFORMANCE BONUS PLAN

We are asking stockholders to approve a Performance Bonus Plan (the “Plan”) so that we may use the Plan to provide incentives to achieve our business objectives and also potentially to receive a federal income tax deduction for compensation paid under the Plan. Our Board of Directors (the “Board”) has approved the Plan, subject to approval of our stockholders at the 2013 Annual Meeting of Stockholders. If stockholders do not approve the Plan, we will not use the Plan. However, in that event, we may find it necessary or desirable to adopt another bonus plan or arrangement. Approval of the Plan requires the affirmative vote of the holders of a majority of the shares present, in person or by proxy, and entitled to vote at the Annual Meeting.

The following paragraphs provide a summary of the principal features of the Plan and its operation. The Plan is set forth in its entirety as Appendix B to this Proxy Statement. The following summary is qualified in its entirety by reference to Appendix B.

Purpose

The purpose of the Plan is to increase stockholder value and the success of the Company by motivating key executives to perform to the best of their abilities and to achieve the Company’s objectives. The Plan accomplishes this by paying awards only after the achievement of specified performance goals.

Eligibility to Participate

The Compensation Committee (the “Committee”) of our Board selects the employees of the Company (and its affiliates) who will be eligible to receive awards under the Plan. The actual number of employees who will be eligible to receive an award during any particular year cannot be determined in advance because the Committee has discretion to select the participants. We currently expect that approximately eight to twelve executives will participate in the Plan at any given time.

Target Awards and Performance Goals

Under the Plan, the Committee assigns each participant a target award and performance goal or goals for a performance period set by the Committee. The specified performance goal(s) must be achieved before an award actually will be paid to the participant. The participant’s target award typically will be expressed as a dollar amount or as a percentage of his or her base salary earned during the applicable performance period. The performance goals set by the Committee may require the achievement of objectives for one or more of the following:

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The Committee may choose to set target goals: (1) in absolute terms, (2) in relative terms (including, but not limited to, the passage of time and/or against other companies or financial metrics), (3) on a per share and/or per capita basis, (4) against the performance of the Company as a whole or against particular business units or products of the Company, (5) on a pre-tax or after-tax basis, and/or (6) on a GAAP (generally accepted accounting principles) or non-GAAP basis. Performance goals may differ from participant to participant, from performance period to performance period and from award to award. The Committee also will determine whether any element(s) (for example, the effect of mergers or acquisitions) will be included in or excluded from the calculations (whether or not such determinations result in any performance goal being measured on a basis other than generally accepted accounting principles). Each performance period will last from three to twelve fiscal quarters (in other words, each performance period will be no shorter than approximately nine months nor longer than approximately thirty-six months). We currently do not have plans to use performance periods under the Plan that are longer than two years, although we may choose to do so in the future. No individual may participate in more than four performance periods at any one time.

Actual Awards

After the performance period ends, the Committee certifies in writing the extent to which the pre-established performance goals actually were achieved or exceeded. The actual award that is payable to a participant is determined using a formula that increases or decreases the participant’s target award based on the level of actual performance attained. However, the Plan limits actual awards to a maximum of $10 million per person for any fiscal year of the Company.

The Committee has discretion to reduce or eliminate (but not to increase) the actual award otherwise payable to any participant (subject to applicable law). The Committee also has discretion to determine whether to pay out any of an actual award otherwise payable to a participant if he or she terminates employment before the award otherwise would be paid.

Actual awards generally are paid in cash no later than two calendar months after the performance period ends. The Committee (in its discretion) also may choose to pay bonuses to Plan participants outside of the Plan on terms established by the Committee from time to time.

Administration

The Committee administers the Plan. Members of the Committee must qualify as outside directors under Section 162(m) of the Internal Revenue Code (“Section 162(m)”). Subject to the terms of the Plan, the Committee has sole discretion to:

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Performance-Based Compensation

The Plan is designed to allow us to pay bonuses that are intended to qualify as “performance-based” compensation under Section 162(m) of the Internal Revenue Code. Under Section 162(m), the Company may not receive a federal income tax deduction for compensation paid to the Company’s Chief Executive Officer or any of the three other most highly compensated executive officers (other than our Chief Financial Officer) to the extent that any of these persons receives more than $1 million in any one year. However, if the Company pays compensation that is “performance-based” under Section 162(m), the Company still can receive a federal income tax deduction for the compensation even if it is more than $1 million during a single year. The Plan allows the Company the opportunity to choose to pay incentive compensation that is intended to be performance-based and therefore potentially fully tax deductible on the Company’s federal income tax return (subject to future changes in tax laws and other compensation arrangements at the Company). The Company also may choose to pay other or additional compensation outside of the Plan that is not intended to qualify as performance-based compensation (and that therefore may not be tax deductible for the Company).

Amendment and Termination of the Plan

The Board or the Committee may amend or terminate the Plan at any time and for any reason. An amendment will be subject to stockholder approval to the extent necessary under Section 162(m).

Bonuses Paid to Certain Individuals and Groups

Awards (if any) under the Plan are determined based on actual future performance. As a result, future actual awards cannot now be determined. As of the date of this proxy statement, the Committee had not established a performance period under the Plan for the Company’s 2013 fiscal year or any later fiscal year. The Committee currently expects to use full fiscal year performance periods (or longer) under the Plan but if the Committee chooses to establish a performance period during fiscal year 2013, the performance period likely would be shorter than a full fiscal year due to the timing of the Plan’s adoption, which was after the end of the first quarter in fiscal year 2013.

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It is not possible to predict with certainty the amount that any participant may earn under the Plan because the Committee has not yet established any performance periods under the Plan nor any other details of bonuses that might be earned under the Plan in the future based on actual performance versus the goals that the Committee may establish. However, in order to provide an example of bonuses that might be earned under the Plan in future years, the following table sets forth the target bonus for fiscal year 2013 under the Company’s preexisting Senior Leadership Plan (not under the Performance Bonus Plan) for the persons and groups shown below, based on each participant’s current base salary and assuming exactly one hundred percent (100%) achievement of the applicable performance goals. (Please see the Compensation Discussion & Analysis section of this proxy statement for more information on the Senior Leadership Plan.) There is no guarantee that the amounts shown below will actually be paid under the Senior Leadership Plan nor that any amounts will be paid for fiscal 2013 under the Performance Bonus Plan. Actual awards (if any) under the Performance Bonus Plan for fiscal year 2013 (or for any future year) will depend on the details of any performance period and bonus formula approved by the Committee after the date of this proxy statement. In addition, the Committee has discretion to decrease (but not increase) the award otherwise indicated under the pre-established formula. For the fiscal year 2013 performance period under the Senior Leadership Plan, the Committee selected three performance goals for use under the Plan: operating income, Ethernet revenue and total Company revenue. Our executive officers are eligible to receive awards under the Plan and, therefore, our executive officers have an interest in this proposal.

Vote Required

Approval of the resolution on Brocade’s Performance Bonus Plan requires the approval of a majority of the votes cast on the proposal at the Annual Meeting. For purposes of this proposal, abstentions are not treated as a “vote cast” on the proposal and, therefore, will have no effect on the outcome of the vote. Broker non-votes will have no effect on the outcome of the vote.

The Board of Directors unanimously recommends that stockholders vote “FOR” the resolution to approve the Performance Bonus Plan.

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PROPOSAL FIVE:

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

The Audit Committee has selected KPMG LLP as our independent registered public accountants for the fiscal year ending October 26, 2013 and recommends that stockholders vote for ratification of such selection. Although ratification by stockholders is not required by law, the Company has determined that it is desirable to request ratification of this selection by the stockholders. If the stockholders do not ratify the selection of KPMG LLP, the Audit Committee may reconsider its selection. Notwithstanding its selection or voting results, the Audit Committee, in its discretion, may appoint new independent registered public accountants at any time during the year if the Audit Committee believes that such a change would be in the best interests of Brocade and its stockholders.

KPMG LLP has audited our consolidated financial statements annually since it was first appointed in fiscal year 2002. We expect that representatives of KPMG LLP will be present at the Annual Meeting to respond to appropriate questions and to make a statement if they so desire.

Fees Billed by KPMG LLP during Fiscal Years 2012 and 2011

“Audit Fees” consisted of fees for the audit of our annual financial statements, including audited financial statements presented in our annual report on Form 10-K, review of the financial statements presented in our quarterly reports on Form 10-Q, and services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements, statutory audits required by non-U.S. jurisdictions, the preparation of an annual “management letter” on internal control matters and assurance services provided in connection with the assessment and testing of internal controls with respect to Section 404 of the Sarbanes-Oxley Act of 2002.

“Audit-Related Fees” consisted of assurance and related services by KPMG LLP that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.”

“Tax Fees” consisted of professional services rendered by KPMG LLP for tax compliance and tax planning. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

Pre-approval Policy.    The Audit Committee has established a policy governing our use of the services of our independent registered public accountants. Under the policy, the Audit Committee is required to pre-approve all audit and non-audit services performed by the Company’s independent registered public accountants in order to ensure that the provision of such services does not impair the public accountants’ independence. In fiscal years 2012 and 2011, all fees identified above under the captions “Audit Fees,” “Audit-Related Fees” and “Tax Fees” that were billed or to be billed by KPMG LLP were approved by the Audit Committee in accordance with SEC requirements and the Audit Committee’s pre-approval policy.

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Vote Required

The affirmative vote of the holders of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote on the matter is necessary to ratify the selection of KPMG LLP as our independent registered public accountants for fiscal year 2013. Abstentions are treated as shares of Common Stock present in person or represented by proxy and entitled to vote and therefore, will have the effect of a vote “against” the ratification of KPMG LLP as our independent registered public accountants. Broker non-votes will have no effect on the outcome of the vote.

The Board of Directors, on behalf of the Audit Committee, recommends that stockholders vote “FOR” the ratification of the selection of KPMG LLP as Brocade’s independent registered public accountants for the fiscal year ending October 26, 2013.

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EXECUTIVE OFFICERS

Set forth below is information regarding our executive and certain key officers as of January 22, 2013.

Lloyd A. Carney was named Chief Executive Officer of Brocade in January 2013 and has served as a director since February 2013. Before joining Brocade, Mr. Carney served as chief executive officer and member of the board of directors of Xsigo Systems, a venture funded IO Virtualization Platform company, from January 2008 until it was acquired by Oracle Corporation in July 2012. He is also a member of the board of directors of Cypress Semiconductor Corporation where he serves as a member of the Audit Committee and the Compensation Committee, and the board of directors of Technicolor SA, where he serves as the chairman of that board’s Technology Committee. Mr. Carney holds a Bachelor of Science degree in Electrical Engineering Technology from Wentworth Institute and a Master of Science degree in Applied Business Management from Lesley College.

Daniel Fairfax was named Chief Financial Officer and VP of Finance in June 2011. Mr. Fairfax joined Brocade in December 2008, as the result of the Company’s acquisition of Foundry Networks, where he served as Chief Financial Officer. From January 2009 to August 2009 Mr. Fairfax served as Vice President Business Operations. From August 2009 to June 2011 Mr. Fairfax served as Vice President Global Services. Mr. Fairfax joined Foundry Networks in May 2006 as Vice President, Corporate Controller. Mr. Fairfax served as Foundry’s Chief Financial Officer between January 2007 and December 2008. Mr. Fairfax has more than 25 years of senior financial and operations management experience. Prior to joining Foundry Networks, Mr. Fairfax served as Senior Vice President and Chief Financial Officer of GoRemote Internet Communications. He also served as Chief Financial Officer of Ironside Technologies, Inc.; ACTA Technology; and NeoVista Software. Before that, Mr. Fairfax held senior financial management and operations positions at Siemens and Spectra-Physics. Mr. Fairfax holds a BA in Economics from Whitman College and an MBA from the University of Chicago, and is a Certified Public Accountant in California with an inactive license.

Tyler Wall has served as Vice President and General Counsel since June 2005 and as Corporate Secretary and Chief Compliance Officer since July 2005. Prior to joining Brocade, from February 2000 until June 2005, Mr. Wall served as Vice President and General Counsel of Chordiant Software, Inc., an enterprise software applications corporation, where he was also Corporate Secretary from January 2004 until June 2005. From 1998 to February 2000, Mr. Wall served as Chordiant’s Director of Legal Affairs. Prior to joining Chordiant, Mr. Wall worked at Oracle Corporation, a provider of database and application software, where he served as Corporate Counsel for the commercial licensing and distribution group. Mr. Wall received a B.S. degree in economics from the University of Utah, a J.D. from Santa Clara University School of Law, and an M.B.A. from Santa Clara University School of Business.

Michael Klayko served as Chief Executive Officer and as a director from January 2005 until he resigned from those positions effective January 14, 2013. See Mr. Klayko’s biographical information in “Board of Directors Meetings and Committees — Former Directors Not Standing For Election” in this proxy statement.

Ian Whiting served in various roles since joining the Company in 2001 and was Senior Vice President, Worldwide Sales between March 2010 and June 2012, at which time he left the Company to pursue other interests.

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EXECUTIVE COMPENSATION AND OTHER MATTERS

Executive Summary

Pay-for-Performance Philosophy and Objectives

Our executive compensation program is based on an overarching pay-for-performance philosophy, and it is intended to attract, retain, motivate and reward a highly talented executive team, while also linking their compensation to shareholder value.

Consistent with our pay-for-performance philosophy, we designed our executive compensation program to achieve the following primary objectives:

A substantial portion of the total compensation opportunity for each of our executives is directly related to performance factors that measure our progress against the goals of our strategic and operating plans and to Brocade’s stock price performance relative to the appropriate benchmark indices.

2012 Business Performance

For fiscal year 2012, Brocade reported revenues of $2.238 billion, compared to $2.147 billion in fiscal year 2011, which represented year-over-year growth of 4.2%. Brocade also reported diluted earnings per share (“EPS”) of $0.41 on a GAAP basis and $0.66 on a non-GAAP basis for fiscal year 2012, increases of 310% and 33%, respectively, over 2011 EPS.

In fiscal year 2012, Brocade further strengthened its product portfolio across all areas of its business and made progress in emerging areas of growth, such as virtualized data centers, cloud computing, and software-defined networking. With significant operating cash flow of $591 million, Brocade eliminated the remaining balance of its term debt over a year in advance of plan, repurchased more than $130 million of common stock, and increased its cash balance by more than 70% in 2012 as compared to 2011. Brocade’s strong operating performance in 2012 was above internal targets and was heavily influenced by the leadership of our executives and the efforts and commitment of our employees.

Summary of 2012 Executive Compensation

Consistent with our pay-for-performance philosophy and objectives, in fiscal year 2012:

Our Compensation Committee has endeavored to align the executive compensation and CEO compensation with shareholder value creation, in addition to tying the executives’ long term incentives to Company share price.

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As demonstrated in the table below, over the past five years, annual changes in CEO compensation have aligned directionally with total shareholder return and are consistent with our pay-for-performance philosophy.

Notes:

Other Important Matters

In addition to the compensation details provided above and discussed further below, other important details are as follows:

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Burn rate is defined as the number of equity awards granted in the year, divided by total shares outstanding. Adjusted burn rate includes a premium applied to full value shares (e.g., RSUs and PSUs) consistent with Institutional Shareholder Services (ISS) policy. Overhang is defined as the number of outstanding options and equity awards, divided by total shares outstanding. For burn rate, adjusted burn rate and overhang, the amounts for fiscal 2012 include the grants made in the final week of fiscal 2011 to the named executive officers and other vice presidents of the Company as those grants were made as part of the compensation package for fiscal 2012.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes the 2012 compensation program for our principal executive officer and our principal financial officer, as well as the other persons included in the Summary Compensation Table on page 53, who were the other executive officers of the Company during fiscal 2012 (the “Named Executive Officers” or “NEOs”). During fiscal 2012, these individuals were:

This Compensation Discussion and Analysis describes the material elements of our executive compensation program during fiscal 2012. It also provides an overview of our executive compensation philosophy and objectives and it analyzes how and why the Committee arrived at the specific compensation decisions for our executive officers, including our NEOs, for fiscal 2012.

This Compensation Discussion and Analysis is divided into the following sections:

Executive Compensation Philosophy, Objectives and Mix

Compensation Philosophy and Objectives

As noted above, our executive compensation program is based on an overarching pay-for-performance philosophy. Generally, the types of compensation and benefits provided to the NEOs are also provided to other officers reporting to the Chief Executive Officer.

Compensation Mix

Consistent with our pay-for-performance philosophy and compensation objectives, for fiscal 2012 a significant portion of executive compensation was variable and performance-based. The key elements of executive compensation were:

Short-Term Compensation

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Long-Term Compensation

The target pay mix for our NEOs during fiscal 2012 reflects our pay-for-performance philosophy and can be illustrated as follows:

NOTE: The Annual Cash Incentive amounts are based on a specified percentage of 2012 base salary, subject to Company performance metrics. The Annual Cash Incentive for the CFO and VP General Counsel include the Brocade “Rev” It Up Plan described under Annual Cash Incentives below. The PSUs and RSUs (both long-term incentives) reflect grant date fair values. No other direct reports to the CEO received PSU’s.

We also provide our NEOs with (i) health and welfare benefits on substantially the same terms and conditions as they are provided to most of our other full-time employees, and (ii) severance and change-in-control compensation (as described below).

Competitive Positioning

The Committee’s objective of maintaining compensation programs that are competitive includes a balance between aggressively hiring and retaining the best possible talent and maintaining a reasonable and responsible cost structure. The Committee does not establish a specific target percentile for the target compensation of our

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NEOs (i.e., we do not engage in “benchmarking” as that term is commonly used). When setting the amount of each compensation component for the NEOs, the Committee considers the following factors:

These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for an executive officer. No single factor above was determinative in setting pay levels, nor was the impact of any factor on the determination of pay levels quantifiable.

For purposes of comparing our executive compensation against the competitive market, the Committee utilizes a peer group of 19 high-technology companies. The companies in the peer group were selected on the basis of their similarity to the Company in size (as determined by revenue, market capitalization, net income, and number of employees), business strategy and industry. The Committee reviews the Company’s peer group at least annually and makes adjustments to its composition, taking into account changes in both the Company’s business and the businesses of the companies in the peer group. In fiscal 2012, the Committee reviewed the Company’s peer group. Following that review the Committee modified the Company’s peer group by excluding Broadcom, Citrix, NetApp, Novellus and Tellabs and replaced them with Autodesk, Avago, Marvell and Maxim. The Committee excluded Novellus because it had been acquired. The Committee excluded Broadcom, Citrix, NetApp, and Tellabs because either their revenue or market capitalization was outside the Company’s preferred revenue or market capitalization range. The four companies added were determined to be comparable with respect to their revenue, market capitalization and general business model.

The fiscal 2012 peer group was as follows:

Against the peer group at the time the compensation analysis was conducted, Brocade ranked at the 55^th percentile in terms of revenue and at the 25^th percentile in terms of market capitalization.

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To analyze the compensation practices of the peer group companies, the Committee’s independent compensation consultant, Compensia, Inc. (“Compensia”), gathered data from public filings and from Radford’s High-Technology Executive Survey database. This peer group data was then used as a reference point to assess the Company’s current compensation levels for the Committee in the course of its deliberations on compensation design and amounts.

Governance of Our Executive Compensation Program

Role of the Compensation Committee

The purpose of the Committee is to, among other things, discharge the Board of Directors’ responsibilities relating to the compensation of our executive officers and directors. The Committee has overall responsibility for (i) overseeing the Company’s compensation and benefits policies, (ii) overseeing, evaluating, and approving executive officer compensation plans, policies, and programs, (iii) overseeing, evaluating and recommending to the full Board for approval director compensation plans and programs, and (iv) evaluating our CEO’s performance and establishing his compensation. With respect to the Company’s CEO, the Committee sets, and with respect to the NEOs (other than the CEO), the Committee reviews and approves their:

Management Interaction with Committee

The management team assists the Committee by providing information on Company and individual performance, market data, and management’s perspective and recommendations on compensation matters. The Committee solicits and reviews the CEO’s recommendations and proposals with respect to annual cash compensation adjustments, long-term equity incentive awards, program structures, and other compensation-related matters for his direct reports. The Committee uses the CEO’s recommendations and proposals as one of the factors in making compensation decisions. The CEO recuses himself from all discussions, and does not contribute to decisions regarding his own compensation.

Compensation Review Cycle

The Committee reviews the base salary levels of our executive officers as well as their annual cash incentive opportunities and equity awards each year in the fall, or more frequently as warranted. Adjustments are generally effective at the beginning of the fiscal year. Each quarter the Committee reviews Company performance and the corresponding projected payouts under the executive annual cash incentive plan(s) and equity awards.

Use of Compensation Consultants

Since fiscal year 2006, Compensia has served as an independent compensation consultant to the Compensation Committee. Compensia provides the Committee with information, recommendations, and other advice relating to executive compensation. Compensia serves at the discretion of the Committee and regularly meets with the Committee, both with and without management present. In April 2012, the Committee conducted a review of several compensation consultants, including Compensia. Following this review, the Committee determined to continue to retain Compensia because of Compensia’s expertise, institutional knowledge and value. Compensia’s fees and expenses for the services provided to the Committee for fiscal year 2012 totaled approximately $226,000.

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In fiscal 2012, Compensia regularly participated in Committee meetings and provided assistance to the Committee, including:

In fiscal 2012, Compensia was not engaged by management to provide any services to the Company and the Committee determined that there were no conflicts of interest. In January 2013, taking into account the recently adopted six factor test set forth by the SEC, the Committee analyzed the independence of Compensia and determined that Compensia is independent and that there were no conflicts of interest. In making this determination, the Committee noted that Mr. Klayko serves on the Compensation Committee of PMC Sierra, which also engages the services of Compensia, but did not view that as an impairment to Compensia’s independence since (i) PMC Sierra uses a different adviser at Compensia than the Company, (ii) Mr. Klayko is not the chair of the PMC Sierra Compensation Committee, (iii) Mr. Klayko does not negotiate the terms of Compensia’s engagement and (iv) Mr. Klayko is transitioning out of the role of the CEO.

Fiscal Year 2012 Compensation Components and Decisions for NEOs

The primary elements of our executive compensation program for fiscal year 2012 were:

Base Salary

Base salary represents the most basic, fixed portion of our executive officers’ compensation and is an important element of compensation intended to retain and motivate highly talented executive officers. The Committee reviews annually the base salaries of our executive officers, including our NEOs, taking into consideration Compensia’s market analyses for our executive officers (including our CEO), and the factors described earlier under “Competitive Positioning”.

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On October 25, 2011, the Committee reviewed the base salaries of our executive officers and, based on the considerations described above, adjustments to base salaries for our NEOs were made for fiscal 2012:

Annual Cash Incentives

For fiscal 2012, the Company had two types of annual cash incentive programs: (i) the Senior Leadership Plan (“SLP”) and (ii) the Brocade “Rev” It Up Plan (“RIUP”).

Senior Leadership Plan

For fiscal 2012, the Committee reviewed the structure of the annual cash incentive plan and determined that a renewed focus on growth was appropriate while also ensuring a continued focus on profitability. In fiscal 2012, all vice presidents including our NEOs participated in the SLP.

The objectives of the SLP were to:

Each participant in the SLP, including each of our NEOs, had an annual cash incentive (“Annual SLP Cash Incentive”) which was a percentage of his or her base salary. The amount that each participant actually earns under the SLP (“Actual SLP Annual Cash Incentive”) is based on achievement of the Company’s revenue and non-GAAP operating income as well as individual, function-specific performance goals (“Actual Performance”). However, the CEO, Michael Klayko, did not have an individual performance component under the SLP as the Committee believes that his individual performance is reflected by the Company’s performance. All payouts under the SLP, including for the revenue and individual performance elements, were subject to a minimum bonus payout threshold for non-GAAP operating income (“Minimum SLP OI Threshold”). Participants were not eligible for any payout under the SLP in the event that non-GAAP operating income was less than the Minimum SLP OI Threshold.

Non-GAAP operating income reflects adjustments that are outside the ordinary course of the Company’s continuing operations, such as non-cash charges relating to stock-based compensation, amortization of intangible assets, litigation related expenses and recoveries.

As shown below, the Actual Annual Cash Incentive was determined by multiplying the participant’s Annual Cash Incentive by Actual Performance.

Actual Performance

Actual Performance for all Participants other than the CEO, Michael Klayko, was equal to the sum of: