Exhibit 10.25
EMULEX CORPORATION
Description of Compensation Arrangements for Certain Executive Officers
     The following is a description of the compensation arrangements for each of
the Company’s named executive officers. The compensation for these executive
officers consists of base salary and perquisites, long-term incentive
compensation and annual cash bonus compensation. As of August 31, 2005, the
following are the base salaries (on an annual basis) of the Company’s named
executive officers:

          Name and Principal Position   Base Salary
 
       
Paul F. Folino
  $ 556,500  
Chairman and Chief Executive Officer
       
 
       
James M. McCluney
  $ 371,830  
President and Chief Operating Officer
       
 
       
Kirk D. Roller(1)
  $ 373,065  
President, Worldwide Sales
       
 
       
Karen Mulvany
  $ 310,852  
Exec. V.P., Business Planning and Development
       
 
       
Michael J. Rockenbach
  $ 290,589  
Exec. V.P. and Chief Financial Officer
       
 
       
William F. Gill
  $ 235,469  
Exec. V.P., Worldwide Sales
       

 

(1)   Mr. Roller retired effective as of July 1, 2005. Amounts indicated reflect
base salary as of the date of retirement.

 
The Company does not have employment agreements with any of its executive
officers but has executed key employee retention agreements with each of its
named executive officers and certain other officers and key employees of the
Company. The Company’s agreement with Mr. Folino entitles him to receive the
following payments and benefits in the event of termination of his employment by
the Company without cause or by Mr. Folino because of a demotion within two
years after a change in control of the Company: (i) a severance payment equal to
the present value of two times the sum of Mr. Folino’s annual salary plus the
highest annual average of any two of his last three annual bonuses;
(ii) continuation for two years following termination of employment of his
health and life insurance, disability income, tax assistance and executive
automobile benefits (reduced to the extent similar benefits are received by him
from another

 

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employer); and (iii) acceleration of vesting of his right to exercise his stock
options based on the length of his continued employment following the grant of
the option by one year upon the change in control of the Company and full
acceleration of vesting of such exercise right in the event of termination of
his employment without cause or because of a demotion as aforesaid within two
years after the change in control. A copy of Mr. Folino’s key employee retention
agreement is filed as Exhibit 10.7 to the Company’s Quarterly Report on Form
10-Q for the quarterly period ended December 26, 2004.
The Company also has entered into similar agreements with each of the other
named executive officers which provide for benefits similar to those described
above, except that the severance payment is equal to the present value of one
times the sum of the employee’s annual salary plus the highest annual average of
any two of the employee’s last three annual bonuses; and continuation following
termination of employment of the employee’s health and life insurance,
disability income, tax assistance and executive automobile benefits (reduced to
the extent similar benefits are received by the employee from another employer)
is limited to one year. The form of key employee retention agreement for each of
the other named executive officers is filed as Exhibit 10.8 to the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2004.
Additionally, the Company’s executive officers are entitled to participate in
health and welfare and retirement plans, perquisite, fringe benefit and other
arrangements generally available to other salaried employees. In addition, each
officer is entitled to participate in the Emulex Corporation Retirement Savings
Plan, and receives group term life insurance premiums and health care
reimbursement paid with respect to the named executive.
The Company’s named executive officers are eligible for annual performance-based
cash bonuses under the Company’s Executive Bonus Plan, which is described in the
Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2005. A
copy of such Executive Bonus Plan is also filed as Exhibit 10.26 to the
Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2005.
Long term incentives are provided to the named executives in accordance with the
Company’s 2004 Employee Stock Incentive Plan which is attached as Appendix B to
the Company’s Definitive Proxy Statement for the Annual Meeting of Stockholders
held on November 18, 2004, and the Company’s Employee Stock Option Plan, as
amended, which is attached as Appendix B to the Company’s Definitive Proxy
Statement for the Annual Meeting of Stockholders held on November 21, 2002, or
any successor stockholder approved equity plans.

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