Exhibit 10.24
EMULEX CORPORATION
Description of Compensation Arrangements with Non-Employee Directors
     The following is a description of the compensation arrangements for the
non-employee directors of Emulex Corporation (the Company).
     Directors’ Fees. Directors who are not employees of the Company receive a
quarterly retainer of $13,750 and reimbursement for travel expenses. In
addition, the Chairmen of the Nominating/Corporate Governance Committee, the
Compensation Committee and the Audit Committee receive additional quarterly
retainers of $1,500, $2,000, and $3,000, respectively. Members of the
Nominating/Corporate Governance Committee and the Compensation Committee (other
than the Chairmen) receive an additional quarterly retainer of $1,000 and
members of the Audit Committee (other than the Chairman) receive additional
quarterly retainers of $2,000. Directors who are employees of the Company
receive no additional compensation for serving on the Board of Directors.
Directors are entitled to reimbursement for out-of-pocket expenses in connection
with attendance at Board and committee meetings.
     Stock Options. Upon becoming a director of the Company, a non-employee
director receives an automatic grant of an option under the Emulex Corporation
1997 Stock Award Plan for Non-Employee Directors (the Director Plan) to purchase
60,000 shares of common stock of the Company at a purchase price equal to the
fair market value per share of that stock on the date of grant of the option.
Under the terms of the Director Plan, the option would vest as to one-third of
the shares on each anniversary of the grant date if the director is still a
director on those dates and will expire one year after she or he ceases to be a
director. In addition, the Director Plan provides for automatic annual option
grants to non-employee directors of 20,000 shares of common stock, which grants
will occur on each yearly anniversary of the director’s commencement date as a
director and vest as to one half of the shares on the six month anniversary of
the grant with the remainder vesting in two equal quarterly installments
thereafter.
     The Board or a designated committee of the Board may grant additional
compensation under the Director Plan to non-employee directors in the form of
restricted stock awards and/or stock appreciation rights , which compensation
may be in addition to or in lieu of the formula option grants. For fiscal 2007,
non-employee directors received 7,000 shares of restricted stock in lieu of the
annual option grants under the Director Plan. Such restricted stock vests on the
same schedule as the automatic annual option grants described above. The
Director Plan is incorporated by reference to Appendix B to the Company’s
Definitive Proxy Statement for its Annual Meeting of Stockholders held on
November 30, 2006.
     Indemnification. In addition to the indemnification afforded to directors
under Delaware law and the Company’s Bylaws, the Company typically enters into
an indemnification agreement with a new director upon his or her appointment as
a director. The form of the indemnification agreement is attached as
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 17, 2005.
The Company also maintains directors and officers liability insurance.