SiliconBeat

Brocade Communications dropped word into its quarterly 10-Q financial filing with the SEC today of an examination by the Internal Revenue Service of the  last two tax returns filed by Foundry Networks, whose sale to Brocade was finalized Dec. 18.

The examinations, covering both the 2007 and 2006 tax years, began earlier this month. “As the audit has just begun,” the company reported, Read the rest of this entry »

Greg Reyes, the former chief executive of Brocade Communications who was convicted of stock-option manipulation in 2007, may settle company claims that he breached his fiduciary duties to the company and unjustly enriched himself, reported Bloomber News late Monday, citing a filing today in federal court in San Francisco.

Attorneys for Reyes and Brocade said the two sides have been “working towards an agreement to resolve through binding arbitration, according to Bloomberg.

Foundry Networks said Tuesday it managed to sell its portfolio of auction rate securities, netting an estimated $38.8 million in the process. The news opened the way for a special meeting of its shareholders to be held today to allow them to, finally, vote on the proposed sale of the company to Brocade Communications Systems.

The special dividend is scheduled to be paid on the date on which the merger is completed. If it should not be completed, Foundry says it will not pay the special dividend.

We’ve posted previously about the cold feet both parties seem to have developed about the transaction that was first proposed back in July.

A Federal court has ordered that those who purchased shares of Brocade Communication between May 18, 2000 and May 15, 2005 be notified of the certification of a class settlement in a shareholder lawsuit brought against the San Jose networking firm, whose former chief executive , Greg Reyes, was found guilty in the nation’s first criminal trial related to stock-option backdating.

In May, the United States District Court for the Northern District of California in San Francisco found that Brocade was Read the rest of this entry »

As corporate romances go, we’d say the bloom is off the rose of the courtship between Brocade Communications and Foundry Networks. It appears that both parties have developed at least a few cold toes about the matter.

Recall that Brocade recently lowered its offer for Foundry amid rumors that it was having a hard time lining up a secure source of funding for the deal since it was announced in July, when Brocade offered to pay $18.50 per share in cash plus a fractional share of its own stock that boosted the value of the total deal when it was announced to $19.25 per share.

The offer has since been lowered Read the rest of this entry »

Foundry Networks, which first postponed a shareholder vote to approve its proposed sale to Brocade Communications from last Friday to Wednesday, and then postponed it a second time to Nov. 7, has postponed it once again. Probably.

In a release today, Foundry said that should the two companies reach a new “definitive”
agreement, the shareholder vote would be Read the rest of this entry »

Foundry Networks, the maker of Ethernet networking gear that agreed in July to be bought by Brocade Communications Systems in a $2 billion deal, adjourned the shareholder meeting called today to vote on the merger until Wednesday, Oct. 29, citing “recent development related to the transaction.”

The news sent both stocks zooming, but in opposite directions. Foundry shares Read the rest of this entry »

Brocade Communications said in a filing Tuesday that it has bought three parcels near where North First Street and Highway 237 meet in San Jose for $50.9 million. The deal, reportedly in the works since April, also involves a development deal with a subsidiary of the seller to construct three buildings on the properties worth $173 million. Brocade also took a four-year option to buy an additional 4 acre-parcel for $26 million. Brocade’s lease on its current headquarters at 1745 Technology Drive in San Jose (pictured) expires at the end of August 2010. Read the rest of this entry »

Brocade Communication’s chief executive, Michael Klayko, got a 25 percent raise in his salary for fiscal 2008, which rose from $580,000 to $725,000, according to the company’s proxy filed Monday with the SEC.

Klayko, who has been with Brocade since January 2003 and served as chief executive since January 2005 when he replaced Greg Reyes, got a $1.3 million bonus for fiscal 2007 along with a $1 million restricted stock grant and an option award valued at $1.1 million. He also made $4.1 million last year exercising 1.2 million shares of Brocade last year.

We’d like to hear from the Brocade rank-and-file about the size of their salary bumps last year. Let us know whether they were more like Klayko’s, or closer to the zero percent raises that two of its named executives — VP for product development, Don Jaworski, and sales VP Ian Whiting — got. They will have to make do with $375,000 again this year.

Greg Reyes may be gone from Brocade, but he’s not forgotten. Check out our story today about the former Brocade CEO’s legal bills. The company said it is still paying his legal fees, though it won’t say specifically how much they are. However, Brocade did say that the overall cost of defending itself from the stock options backdating issue is significant. And because Reyes is appealing his guilty verdict, those costs are still rising.