exv10w1



 





Exhibit 10.1




BROCADE SENIOR LEADERSHIP PLAN




Revised: November 16, 2007 (effective as of fiscal year 2008)




PURPOSE



The Brocade Senior Leadership Plan is designed to link incentive compensation with Company
performance.




PERFORMANCE PERIOD AND PAYOUT PERIOD



Performance against Company and individual objectives is measured annually (according to the
Company’s fiscal year) (Plan Period), but will be reviewed semi-annually. Payout of earned cash
bonuses, if any, occurs on an annual basis.




ELIGIBILITY



Regular full-time and part-time Vice President (VP) level employees are eligible to participate in
the Senior Leadership Plan Program. To the extent a VP is eligible to and participates in the
Company’s Sales Incentive Plan, then that VP shall not be eligible to participate in this Senior
Leadership Plan.



Participants must be regular (full-time or part-time) employees at the end of the fiscal year to be
eligible to receive a Senior Leadership Plan Payout.




PARTICIPANT PERFORMANCE



As each Plan Period begins, participants must complete a CEO or VP Performance Contract.
Performance contracts should be tied to company and departmental goals as outlined by the board of
directors (i.e., company priorities and initiatives). All goals must be tied to overall company
objectives and have defined measurements.



Before Performance Contracts for Executive VPs are final, they are to be reviewed and approved by
Finance, Human Resources, and the Chief Executive Officer (CEO). Performance Contracts for
Functional VPs are reviewed and approved by the applicable Executive VP. The CEO’s Performance
Contract shall be reviewed by the Chair of the Board of Directors and the Chair of the Compensation
Committee.



At the end of each Plan Period, actual performance against the plan’s financial metric goals is
determined by Finance and provided to the plan participants. Performance against goals is then
assessed by the Participant and then reviewed and assessed by the VP’s manager, in order to
determine each participant’s bonus payout for the period. The Compensation Committee reviews and
approves all Section 16 Officers’ performance and bonus payouts annually. The CEO reviews and
approves all other VP cash bonus payouts. The Compensation Committee shall review and approve the
CEO’s bonus payouts.




 









 








COMPANY PERFORMANCE & SENIOR LEADERSHIP PLAN FUNDING



Each Plan Period, Brocade’s Board of Directors will set a Non-GAAP Operating Profit target for the
Company to achieve during the Plan Period (Target OP).



At the end of each Plan Period, Brocade will determine amounts to be paid under the Senior
Leadership Plan based on the actual performance achieved by Brocade during the Plan Period (Actual
OP) relative to the Target OP (Actual Funding).



The Actual OP will be communicated following the end of each Plan Period.




PARTICIPANT INCENTIVE TARGET



A Participant’s Incentive Target is determined by the Participant’s pay grade at the end of the
12-month Plan Period, unless otherwise indicated in writing by Brocade.




	 	 	 
	Participant Pay Grade	 	Annual Incentive Target
	CEO
	 	100%
	Section 16 Officers
	 	60%
	Other CEO Direct Reports 

and any VPs selected by the CEO
	 	50%
	Other VPs
	 	40%






SENIOR LEADERSHIP PLAN PAYOUTS



On an annual basis, the Compensation Committee reviews and approves Section 16 Officers’
performance and cash bonus payouts. The CEO reviews and approves all other VP cash bonuses. Program
payouts are made within eight (8) weeks following the conclusion of the 12-month Plan Period.
Payouts will be pro-rated for Participants who are hired or transferred into the Senior Leadership
Plan during any Plan Period.



Except as otherwise agreed upon by: (i) the Compensation Committee for the CEO and other Section
16 officers, and the CEO for all other VPs, and (ii) the Participant, for each Participant, the
cash bonus payout is calculated based on the following formula (less applicable taxes and
deductions):





Bonus Payout = (Actual Funding) x (Goal Points Earned for the year) x (Annual
Incentive Target) x (Annual Salary)



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Goal Points
	 	 		 		 	Business Unit	 		 	
	 	 		 	Company	 	Revenue	 		 	 	 	 
	 	 	Company	 	Non-GAAP	 	and	 	 	 	 	 	 	 	 
	 	 	Revenue	 	Operating Margin	 	Non-GAAP Operating	 	Individual	 	 	 	 
	Participant	 	Targets	 	Targets	 	Margin Targets	 	Goals	 	Total
	CEO
	 	 	50	%	 	 	50	%	 	 	—	 	 	 	—	 	 	 	100	%
	VPs
	 	 	50	%	 	 	40	%	 	 	—	 	 	 	10	%	 	 	100	%
	(non-Business Unit)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Business Unit
	 	 	25	%	 	 	25	%	 	 	50	%	 	 	—	 	 	 	100	%
	VPs
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







 









 




Bonuses will be calculated using the annual base salary and Annual Incentive Target as of the last
day of the Plan Period, except as set forth above or otherwise indicated in writing by Brocade.



Departmental budgets are communicated at the beginning of each fiscal year and may be updated
quarterly throughout the year by the CEO and CFO. Adherence to the individual’s departmental budget
is a gate for the individual to qualify for the Senior Leadership Plan bonus. Failure to adhere to
the agreed upon budget disqualifies the individual from a bonus payout.




ADMINISTRATIVE PROCEDURES




Compensation Committee Approval



The Compensation Committee reserves the right to decrease or eliminate bonus otherwise indicated.




New Hires and Promotions



Participants new to the company or who are promoted into the Senior Leadership Plan must complete a
VP Performance Contract within 60 days of beginning in the new position.




Position/Salary Factor



Payout will be based on the Participant’s annual base salary and job position on the last day of
the Plan Period. Bonuses may be pro-rated if Participant received a cash bonus under another bonus
program.



Terminations: Anyone who is not on the payroll as of the end of the fiscal year is not eligible to
receive a cash bonus payout.



Leaves of Absences, Disability or Death: In the event of the Participant’s death, disability time
off, or leave of absence, Payouts will be made on a pro-rated basis, based on the number of days
the Participant was actively working at Brocade. If the Participant is on a legally protected leave
of absence (e.g. Family Medical Leave or Military Leave), the Participant’s eligibility for
participation in Plan may be extended beyond the time above, in accordance with the laws governing
the legally protected leave. In the event of death, any cash bonus payments will be paid to the
Participant’s primary beneficiary as designated in the Participant’s Brocade life insurance plan
documentation, if any, or will otherwise be paid to his or her estate.



Performance Improvement Plan/Disciplinary Situations (Development Needed): If a Participant, at
anytime prior to the cash bonus payout 12-month Plan Period, is subject to a performance
improvement plan, discipline or demotion, Brocade may, in its sole discretion, reduce or eliminate
the cash bonus payment that the Participant would otherwise have been eligible to receive. If, at
the time prior to the Payout for a 12-month Plan Period, it is determined that a Participant may be
subject to corrective action, discipline or demotion, then Brocade may




 









 







withhold the entire cash bonus payout, or a portion thereof, until after a final decision on such
corrective action has been made. If a Participant is given a performance rating of Development
Needed, the Participant will not be eligible to receive a Payout. Only the VP of Human Resources or
CEO may approve exceptions to this policy, except that the Compensation Committee must approve
exceptions for Section 16 officers.



Other Provisions: Participation in the Senior Leadership Plan does not constitute an agreement
(express or implied) between the Participant and Brocade that the Participant will be employed by
Brocade for any specific period of time, nor is there any agreement for continuing or long-term
employment. Terms and conditions regarding the Senior Leadership Plan and any participation
therein, including but not limited to Senior Leadership Plan eligibility, Senior Leadership Plan
funding, and performance and payout criteria and determinations, are subject to change by Brocade
at any time in its sole discretion. Brocade and its Board of Directors retain the absolute right to
interpret, revise, modify or terminate the Senior Leadership Plan at any time in its sole
discretion.




 









 








ADDENDUM TO BROCADE SENIOR LEADERSHIP PLAN

(DATED OCTOBER 21, 2005)



Notwithstanding any terms to the contrary in the Brocade Senior Leadership Plan, the following
terms shall apply to the Bonus Payout under the Senior Leadership Plan for fiscal 2006 and 2007:




	 	 	 	 	 
	 	 	          2006	 	          2007
	Executive Officers and
Certain Other Officers
	 	 	 	 
	Cash Bonus Premium1

	 	Up to 1.0x of 2006
Bonus Target
	 	Up to 0.5x of 2007
Bonus
Target3
	Restricted Stock2

	 	1.5x of 2005 Base Salary
	 	N/A
	 
	 	 	 	 
	Other Officers
	 	 	 	 
	Cash Bonus Premium1

	 	Up to 0.35x of 2006
Bonus Target
	 	Up to 0.35x of 2007
Bonus
Target3








 




			
	1	 	In addition to normal bonus and subject to achievement of revenue and operating
margin/profit targets determined by the Board of Directors and other Company and departmental
financial, strategic and operational metrics.
	 
	2	 	The number of shares of restricted stock to be issued is multiplied by such employee’s
2005 base salary, divided by then fair market value on the date of grant. The grants will be
subject to 2-year cliff vesting. These grants will be in lieu of any 2006 focal option grants
for such employees.
	 
	3	 	The Cash Bonus Premium for 2007 pursuant to this Addendum shall be calculated based on
(i) the officer’s base salary as of the last day of the Plan Period and (ii) the Annual
Incentive Target deemed to be in effect as of the beginning of the 2007 Plan Period (without
any subsequent adjustments during the period, unless otherwise indicated in writing by
Brocade).