##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 
  þ
    
    Quarterly Report Pursuant to Section 13 or
15(d) of the
Securities Exchange Act of 1934
 For the quarterly period ended April 2, 2006
  o
    
    Transition Report Pursuant to Section 13
or 15(d) of the
Securities Exchange Act of 1934
 Commission File No. 001-31353
 EMULEX CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware
    
    51-0300558(State or other jurisdiction
    
    (I.R.S Employerof incorporation or organization)
    
    Identification No.)
 3333 Susan StreetCosta Mesa, California
    
    92626(Address of principal executive offices)
    
    (Zip Code)
 (714) 662-5600  Registrants telephone number, including area code
 
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-Accelerated filer o
 o þ




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##### 



PAGEPart I. FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets
April 2, 2006 and July 3, 2005
    
    
    2Condensed Consolidated Statements of Income
Three and nine months ended April 2, 2006 and March 27, 2005
    
    
    3Condensed Consolidated Statements of Cash Flows
Nine months ended April 2, 2006 and March 27, 2005
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    39Item 4.
    
    Controls and Procedures
    
    
    40Part II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    41Item 1A.
    
    Risk Factors
    
    
    41Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    41Item 6.
    
    Exhibits
    
    
    42Signatures
    
    
    43EXHIBIT 10.1EXHIBIT 10.2EXHIBIT 31.AEXHIBIT 31.BEXHIBIT 32
  1




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 
 April 2,
    
    
    July 3,2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    138,997
    
    
    $
    120,317Investments
    
    
    460,885
    
    
    
    346,675Accounts and other receivables, net
    
    
    56,954
    
    
    
    47,730Inventories, net
    
    
    30,471
    
    
    
    36,266Prepaid expenses
    
    
    5,432
    
    
    
    4,508Deferred income taxes
    
    
    26,163
    
    
    
    28,961Total current assets
    
    
    718,902
    
    
    
    584,457Property and equipment, net
    
    
    64,592
    
    
    
    65,976Investments
    
    
    11,686
    
    
    
    54,936Intangibles, net
    
    
    76,170
    
    
    
    95,806Other assets
    
    
    429
    
    
    
    606$
    871,779
    
    
    $
    801,781Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    20,772
    
    
    $
    29,778Accrued liabilities
    
    
    20,746
    
    
    
    21,505Convertible subordinated notes
    
    
    234,729
    
    
    
    Income taxes payable
    
    
    31,476
    
    
    
    25,361Total current liabilities
    
    
    307,723
    
    
    
    76,644Convertible subordinated notes
    
    
    
    
    
    
    233,382Deferred income taxes and other
    
    
    12,069
    
    
    
    14,164Total liabilities
    
    
    319,792
    
    
    
    324,190Commitments, contingencies and subsequent event (notes 7, 8 and 11)Stockholders equity:Preferred stock, $0.01 par value; 1,000,000 shares authorized
(150,000 shares designated as Series A Junior Participating
Preferred Stock); none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.10 par value; 240,000,000 shares authorized;
84,229,719 and 83,201,002 issued and outstanding at
April 2, 2006 and July 3, 2005, respectively
    
    
    8,423
    
    
    
    8,320Additional paid-in capital
    
    
    970,193
    
    
    
    944,545Deferred compensation
    
    
    
    
    
    
    (3,407
    )Accumulated deficit
    
    
    (426,629
    )
    
    
    (471,867
    )Total stockholders equity
    
    
    551,987
    
    
    
    477,591$
    871,779
    
    
    $
    801,781
  2




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedApril 2,
    
    
    March 27,
    
    
    April 2,
    
    
    March 27,2006
    
    
    2005
    
    
    2006
    
    
    2005Net revenues
    
    $
    89,295
    
    
    $
    102,580
    
    
    $
    303,942
    
    
    $
    267,476Cost of sales
    
    
    35,923
    
    
    
    41,160
    
    
    
    123,084
    
    
    
    111,382Gross profit
    
    
    53,372
    
    
    
    61,420
    
    
    
    180,858
    
    
    
    156,094Operating expenses:Engineering and development
    
    
    21,726
    
    
    
    21,042
    
    
    
    65,916
    
    
    
    60,985Selling and marketing
    
    
    9,151
    
    
    
    8,004
    
    
    
    26,362
    
    
    
    23,015General and administrative
    
    
    5,468
    
    
    
    4,223
    
    
    
    17,316
    
    
    
    7,381Amortization of other
intangible
assets
    
    
    2,686
    
    
    
    2,833
    
    
    
    8,143
    
    
    
    8,498Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,793Total operating expenses
    
    
    39,031
    
    
    
    36,102
    
    
    
    117,737
    
    
    
    101,672Operating income
    
    
    14,341
    
    
    
    25,318
    
    
    
    63,121
    
    
    
    54,422Nonoperating income:Interest income
    
    
    5,881
    
    
    
    3,341
    
    
    
    14,419
    
    
    
    9,242Interest expense
    
    
    (620
    )
    
    
    (1,016
    )
    
    
    (1,866
    )
    
    
    (3,419
    )Gain (loss) on repurchase of
convertible subordinated notes
    
    
    
    
    
    
    (279
    )
    
    
    
    
    
    
    12,811Other income (expense), net
    
    
    52
    
    
    
    (24
    )
    
    
    32
    
    
    
    48Total nonoperating income
    
    
    5,313
    
    
    
    2,022
    
    
    
    12,585
    
    
    
    18,682Income before income taxes
    
    
    19,654
    
    
    
    27,340
    
    
    
    75,706
    
    
    
    73,104Income tax provision
    
    
    8,061
    
    
    
    9,552
    
    
    
    30,468
    
    
    
    26,816Net income
    
    $
    11,593
    
    
    $
    17,788
    
    
    $
    45,238
    
    
    $
    46,288Net income per share:Basic
    
    $
    0.14
    
    
    $
    0.21
    
    
    $
    0.54
    
    
    $
    0.56Diluted
    
    $
    0.13
    
    
    $
    0.20
    
    
    $
    0.51
    
    
    $
    0.52Number of shares used in per share
computations:Basic
    
    
    84,075
    
    
    
    82,963
    
    
    
    83,764
    
    
    
    82,710Diluted
    
    
    91,304
    
    
    
    93,415
    
    
    
    91,171
    
    
    
    93,467
  3




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Nine Months EndedApril 2,
    
    
    March 27,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    45,238
    
    
    $
    46,288Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization of property and equipment
    
    
    12,162
    
    
    
    10,723Amortization of discount on 0.25% convertible
subordinated notes
    
    
    1,347
    
    
    
    2,262Gain on repurchase of convertible subordinated notes
    
    
    
    
    
    
    (12,811
    )Insurance recovery on shareholder litigation settlements.
    
    
    
    
    
    
    (4,649
    )Stock-based compensation
    
    
    15,433
    
    
    
    3,305Amortization of intangibles
    
    
    19,083
    
    
    
    19,642Impairment of goodwill
    
    
    
    
    
    
    1,793Deferred income taxes
    
    
    745
    
    
    
    9,753Tax benefit from exercise of stock options
    
    
    
    
    
    
    1,619Excess tax benefits from stock-based payment arrangements
    
    
    (3,206
    )
    
    
    Other
    
    
    61
    
    
    
    22Changes in assets and liabilities:Accounts and other receivables
    
    
    (9,224
    )
    
    
    7,553Inventories
    
    
    6,026
    
    
    
    4,993Prepaid expenses and other assets
    
    
    (747
    )
    
    
    (974
    )Accounts payable and accrued liabilities
    
    
    (9,807
    )
    
    
    7,806Net reimbursement of litigation settlements
    
    
    
    
    
    
    9,052Income taxes payable
    
    
    9,321
    
    
    
    11,843Net cash provided by operating activities
    
    
    86,432
    
    
    
    118,220Cash flows from investing activities:Net proceeds from sale of property and equipment
    
    
    3
    
    
    
    42Additions to property and equipment
    
    
    (10,843
    )
    
    
    (9,815
    )Net decrease in restricted cash related to the construction
escrow account
    
    
    
    
    
    
    23Purchases of investments
    
    
    (1,722,416
    )
    
    
    (560,490
    )Maturities of investments
    
    
    1,651,456
    
    
    
    564,767Net cash used in investing activities
    
    
    (81,800
    )
    
    
    (5,473
    )Cash flows from financing activities:Proceeds from issuance of common stock under stock option plans
    
    
    10,842
    
    
    
    4,268Repurchase of convertible subordinated notes
    
    
    
    
    
    
    (154,266
    )Excess tax benefits from stock-based payment arrangements
    
    
    3,206
    
    
    
    Net cash provided by (used in) financing activities
    
    
    14,048
    
    
    
    (149,998
    )Net increase (decrease) in cash and cash equivalents
    
    
    18,680
    
    
    
    (37,251
    )Cash and cash equivalents at beginning of period
    
    
    120,317
    
    
    
    192,137Cash and cash equivalents at end of period
    
    $
    138,997
    
    
    $
    154,886Supplemental disclosures:Cash paid during the period for:Interest
    
    $
    297
    
    
    $
    761Income taxes
    
    
    20,698
    
    
    
    3,836
  4




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##### Table of Contents



1.
    
    Summary of Significant Accounting Policies and Basis of Presentation
  Recently Released Accounting Standards
   Recently Adopted Accounting Standards
  2.
    
    Business Combination
  5




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##### Table of Contents



3.
    
    Inventories
  April 2,
    
    
    July 3,2006
    
    
    2005(in thousands)Raw materials.
    
    $
    5,969
    
    
    $
    20,269Finished goods
    
    
    24,502
    
    
    
    15,997$
    30,471
    
    
    $
    36,266
 Intangibles, net
  April 2,
    
    
    July 3,2006
    
    
    2005(in thousands)Intangible assets subject to amortization:Core technology
    
    $
    85,510
    
    
    $
    85,723Accumulated amortization, core technology
    
    
    (45,320
    )
    
    
    (36,059
    )Developed technology
    
    
    9,295
    
    
    
    9,341Accumulated amortization, developed technology
    
    
    (5,497
    )
    
    
    (3,818
    )Patents
    
    
    12,954
    
    
    
    13,019Accumulated amortization, patents
    
    
    (4,539
    )
    
    
    (3,157
    )Customer relationships
    
    
    37,774
    
    
    
    37,962Accumulated amortization, customer relationships
    
    
    (17,937
    )
    
    
    (12,415
    )Tradename
    
    
    4,944
    
    
    
    4,969Accumulated amortization, tradename
    
    
    (1,683
    )
    
    
    (1,161
    )Covenants not-to-compete
    
    
    3,065
    
    
    
    3,081Accumulated amortization, covenants not-to-compete
    
    
    (2,396
    )
    
    
    (1,679
    )Intangible assets subject to amortization
    
    $
    76,170
    
    
    $
    95,806
  6




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2006
    
    $
    25,4072007
    
    $
    24,7832008
    
    $
    20,8632009
    
    $
    11,8362010
    
    $
    8,479
  2006
    
    $
    14,5762007
    
    $
    14,5452008
    
    $
    11,0592009
    
    $
    5,9992010
    
    $
    5,999
 Other Assets
  April 2,
    
    
    July 3,2006
    
    
    2005(in thousands)Deferred
debt issuance costs-
convertible subordinated notes, net
    
    $
    74
    
    
    $
    151Long-term prepaid assets
    
    
    282
    
    
    
    354Refundable deposits
    
    
    73
    
    
    
    101$
    429
    
    
    $
    606
 Accrued Liabilities
  April 2,
    
    
    July 3,2006
    
    
    2005(in thousands)Payroll and related costs
    
    $
    8,405
    
    
    $
    8,204Warranty reserves
    
    
    3,065
    
    
    
    4,085Unearned revenue and customer performance liabilities
    
    
    3,188
    
    
    
    3,442Accrued advertising and promotions
    
    
    1,743
    
    
    
    1,674Accrued property, sales, franchise and related taxes.
    
    
    1,599
    
    
    
    1,280Other
    
    
    2,746
    
    
    
    2,820$
    20,746
    
    
    $
    21,505
   Three Months Ended
    
    
    Nine Months EndedApril 2,
    
    
    March 27,
    
    
    April 2,
    
    
    March 27,2006
    
    
    2005
    
    
    2006
    
    
    2005(in thousands)Balance at beginning of period.
    
    $
    3,246
    
    
    $
    4,152
    
    
    $
    4,085
    
    
    $
    4,046Additions to costs and expenses
    
    
    784
    
    
    
    1,213
    
    
    
    2,036
    
    
    
    2,450Amounts charged against reserve
    
    
    (965
    )
    
    
    (598
    )
    
    
    (3,056
    )
    
    
    (1,729
    )Balance at end of period
    
    $
    3,065
    
    
    $
    4,767
    
    
    $
    3,065
    
    
    $
    4,767
 7




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Convertible Subordinated Notes
   
    
    prior to December 15, 2021, on any date during any fiscal quarter (and only
during such fiscal quarter) after the fiscal quarter ending December 31, 2003, if
the closing sale price of the Companys common stock was more than 120 percent of
the then current conversion price for at least 20 trading days in the period of
the 30 consecutive trading days ending on the last day of the previous fiscal
quarter;
    
    on or after December 15, 2021, at all times on or after any date on which the
closing sale price of the Companys common stock is more than 120 percent of the
then current conversion price of the notes;
    
    if the Company elects to redeem the notes on or after December 20, 2008;
    
    upon the occurrence of specified corporate transactions or significant
distributions to holders of the Companys common stock; or
    
    subject to specified exceptions, for the ten business day period after any five
consecutive trading day period in which the average trading prices for the notes
for such five trading day period was less than 98 percent of the average
conversion value of the notes during that period.
    8




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Commitments and Contingencies
 Litigation
     Other Commitments and Contingencies
  Stock-Based Compensation
  9




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Three
    
    
    NineMonths Ended
    
    
    Months EndedMarch 27,
    
    
    March 27,2005
    
    
    2005Net income as reported
    
    $
    17,788
    
    
    $
    46,288Add: total employee stock-based compensation expense
included
in net income as reported, net of related tax effects
    
    
    622
    
    
    
    2,301Deduct: Total employee stock-based compensation expense
determined under fair value method for all awards, net of
related tax effects
    
    
    (5,419
    )
    
    
    (18,898
    )Pro forma net income
    
    $
    12,991
    
    
    $
    29,691Net income per share:Basic  as reported
    
    $
    0.21
    
    
    $
    0.56Basic  pro forma
    
    $
    0.16
    
    
    $
    0.36Diluted  as reported
    
    $
    0.20
    
    
    $
    0.52Diluted  pro forma
    
    $
    0.15
    
    
    $
    0.34
  Three
    
    
    NineMonths Ended
    
    
    Months EndedMarch 27,
    
    
    March 27,2005
    
    
    2005Risk-free interest rate
    
    
    4.0
    %
    
    
    2.0% - 4.0
    %Stock volatility
    
    
    50.0
    %
    
    
    50.0% - 84.0
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Average expected lives (years)
    
    
    2.9
    
    
    
    0.5 - 2.9Weighted-average fair value per option granted
    
    $
    6.08
    
    
    $
    3.49 - $6.08
   10




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Three Months Ended
    
    
    Nine Months EndedApril 2,
    
    
    April 2,2006
    
    
    2006(in thousands)
    
    
    (in thousands)Total cost of stock-based payment plans during the
period
    
    $
    4,897
    
    
    $
    15,664Amounts capitalized in inventory during the period
    
    
    (231
    )
    
    
    (513
    )Amounts recognized in income for amounts previously
capitalized in inventory
    
    
    128
    
    
    
    282Amounts charged against income, before income tax
benefit
    
    $
    4,794
    
    
    $
    15,433Amount of related income tax benefit recognized in
income
    
    $
    925
    
    
    $
    3,129
 Employee Stock Option and Equity Incentive Plans
     11




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12




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All Other Plans
    
    Purchase PlanThree Months
    
    Nine Months
    
    Three Months
    
    Nine MonthsExpected volatility
    
    
    41% - 69
    %
    
    
    41% - 74
    %
    
    
    37
    %
    
    
    37
    %Weighted average
expected volatility
    
    
    38% - 50
    %
    
    
    38% - 56
    %
    
    
    37
    %
    
    
    37
    %Expected dividends
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected term (in years)
    
    
    2.4 - 4.4
    
    
    
    2.0 - 5.0
    
    
    
    0.5
    
    
    
    0.5Weighted average
expected term (in
years)
    
    
    3.25
    
    
    
    3.25
    
    
    
    0.5
    
    
    
    0.5Risk-free rate
    
    
    4.78% - 4.80
    %
    
    
    4.11% - 4.80
    %
    
    
    4.80
    %
    
    
    3.90% - 4.80
    %
  WeightedAverage
    
    AggregateWeighted
    
    Remaining
    
    IntrinsicAverage
    
    Contractual
    
    ValueOptions
    
    Exercise Price
    
    Term (years)
    
    (in millions)Balance, July 3, 2005
    
    
    14,110,464
    
    
    $
    22.15Granted
    
    
    2,237,089
    
    
    
    19.81Exercised
    
    
    (820,714
    )
    
    
    9.34Canceled
    
    
    (449,907
    )
    
    
    38.80Forfeited
    
    
    (107,928
    )
    
    
    18.64Balance, April 2, 2006
    
    
    14,969,004
    
    
    $
    22.02
    
    
    
    6.0
    
    
    $
    31.2Exercisable, April 2, 2006
    
    
    9,947,171
    
    
    $
    23.92
    
    
    
    5.4
    
    
    $
    22.9
    13




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Earnings per Share
  Three Months Ended
    
    Nine Months EndedApril 2,
    
    March 27,
    
    April 2,
    
    March 27,2006
    
    2005
    
    2006
    
    2005Numerator:Net income
    
    $
    11,593
    
    
    $
    17,788
    
    
    $
    45,238
    
    
    $
    46,288Adjustment for interest expense on convertible
subordinated notes, net of tax
    
    
    366
    
    
    
    661
    
    
    
    1,115
    
    
    
    2,160Numerator for diluted net income per share
    
    $
    11,959
    
    
    $
    18,449
    
    
    $
    46,353
    
    
    $
    48,448Denominator:Denominator for basic net income per share 
weighted average shares outstanding
    
    
    84,075
    
    
    
    82,963
    
    
    
    83,764
    
    
    
    82,710Effect of dilutive securities:Dilutive options outstanding and ESPP
shares
    
    
    1,766
    
    
    
    1,817
    
    
    
    1,944
    
    
    
    1,213Dilutive common shares from assumed
conversion of subordinated notes
    
    
    5,463
    
    
    
    8,635
    
    
    
    5,463
    
    
    
    9,544Denominator
for diluted net income per share adjusted weighted average shares outstanding
    
    
    91,304
    
    
    
    93,415
    
    
    
    91,171
    
    
    
    93,467Basic net income per share
    
    $
    0.14
    
    
    $
    0.21
    
    
    $
    0.54
    
    
    $
    0.56Diluted net income per share
    
    $
    0.13
    
    
    $
    0.20
    
    
    $
    0.51
    
    
    $
    0.52Antidilutive options excluded from computation
    
    
    9,640
    
    
    
    8,259
    
    
    
    9,028
    
    
    
    9,516Average market price of common stock
    
    $
    18.62
    
    
    $
    17.03
    
    
    $
    19.35
    
    
    $
    13.64
  Subsequent Event
  14




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15




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Forward-Looking Statements
   Executive Overview
 16
    Table of Contents  Results of Operations
  17
    Table of Contents  Percentage of Net RevenuesThree months ended
    
    Nine months endedApril 2,
    
    March 27,
    
    April 2,
    
    March 27,2006
    
    2005
    
    2006
    
    2005Net revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    40.2
    
    
    
    40.1
    
    
    
    40.5
    
    
    
    41.6Gross profit
    
    
    59.8
    
    
    
    59.9
    
    
    
    59.5
    
    
    
    58.4Operating expenses:Engineering and development
    
    
    24.3
    
    
    
    20.5
    
    
    
    21.7
    
    
    
    22.8Selling and marketing
    
    
    10.3
    
    
    
    7.8
    
    
    
    8.6
    
    
    
    8.6General and administrative
    
    
    6.1
    
    
    
    4.1
    
    
    
    5.7
    
    
    
    2.8Amortization of other intangibles
    
    
    3.0
    
    
    
    2.8
    
    
    
    2.7
    
    
    
    3.2Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.7Total operating expenses
    
    
    43.7
    
    
    
    35.2
    
    
    
    38.7
    
    
    
    38.1Operating income
    
    
    16.1
    
    
    
    24.7
    
    
    
    20.8
    
    
    
    20.3Nonoperating income:Interest income
    
    
    6.6
    
    
    
    3.3
    
    
    
    4.7
    
    
    
    3.5Interest expense
    
    
    (0.7
    )
    
    
    (1.0
    )
    
    
    (0.6
    )
    
    
    (1.3
    )Gain (loss) on repurchase of convertible
subordinated notes
    
    
    
    
    
    
    (0.3
    )
    
    
    
    
    
    
    4.8Other income (expense), net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total nonoperating income
    
    
    5.9
    
    
    
    2.0
    
    
    
    4.1
    
    
    
    7.0Income before income taxes
    
    
    22.0
    
    
    
    26.7
    
    
    
    24.9
    
    
    
    27.3Income tax provision
    
    
    9.0
    
    
    
    9.4
    
    
    
    10.0
    
    
    
    10.0Net income
    
    
    13.0
    %
    
    
    17.3
    %
    
    
    14.9
    %
    
    
    17.3
    %
 Three months ended April 2, 2006 compared to three months ended March 27, 2005
 Net Revenues.
  Net Revenues by Product LineThree Months
    
    
    
    
    
    Three MonthsEnded
    
    Percentage
    
    Ended
    
    Percentage
    
    
    
    
    
    Percentage(dollars in
    
    April 2,
    
    of Net
    
    March 27,
    
    of Net
    
    Increase/
    
    Change,thousands)
    
    2006
    
    Revenues
    
    2005
    
    Revenues
    
    (Decrease)
    
    if meaningfulFibre Channel
    
    $
    89,159
    
    
    
    100
    %
    
    $
    102,545
    
    
    
    100
    %
    
    $
    (13,386
    )
    
    
    (13
    %)IP networking
    
    
    133
    
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    104
    
    
    
    Other
    
    
    3
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    (3
    )
    
    
    Total net revenues
    
    $
    89,295
    
    
    
    100
    %
    
    $
    102,580
    
    
    
    100
    %
    
    $
    (13,285
    )
    
    
    (13
    %)
  18
    Table of Contents  Net Revenues by Major CustomersDirect Revenues
    
    
    Total Direct and Indirect Revenues (1)Three Months
    
    
    Three Months
    
    
    Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedApril 2,
    
    
    March 27,
    
    
    April 2,
    
    
    March 27,2006
    
    
    2005
    
    
    2006
    
    
    2005Net revenue percentage (2) :EMC
    
    
    
    
    
    
    
    
    
    
    20
    %
    
    
    22
    %Hewlett-Packard
    
    
    12
    %
    
    
    10
    %
    
    
    12
    %
    
    
    11
    %IBM
    
    
    31
    %
    
    
    31
    %
    
    
    31
    %
    
    
    32
    %Info-X
    
    
    19
    %
    
    
    20
    %
    
    
    
    
    
    
    
 
 (1)
    
    Customer-specific models sold indirectly are included with the OEMs revenues in
these columns rather than as revenue for the distributors, resellers or other third parties.(2)
    
    Amounts less than 10 percent are not presented.   Net Revenues by Sales ChannelThree Months
    
    
    
    
    
    
    Three MonthsEnded
    
    
    Percentage
    
    
    Ended
    
    
    Percentage
    
    
    
    
    
    
    PercentageApril 2,
    
    
    of Net
    
    
    March 27,
    
    
    Of Net
    
    
    Increase/
    
    
    Change,(dollars in thousands)
    
    2006
    
    
    Revenues
    
    
    2005
    
    
    Revenues
    
    
    (Decrease)
    
    
    if meaningfulOEM
    
    $
    58,816
    
    
    
    66
    %
    
    $
    65,222
    
    
    
    64
    %
    
    $
    (6,406
    )
    
    
    (10
    %)Distribution
    
    
    30,428
    
    
    
    34
    %
    
    
    37,355
    
    
    
    36
    %
    
    
    (6,927
    )
    
    
    (19
    %)Other
    
    
    51
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    48
    
    
    
    Total net revenues
    
    $
    89,295
    
    
    
    100
    %
    
    $
    102,580
    
    
    
    100
    %
    
    $
    (13,285
    )
    
    
    (13
    %)
  19
    Table of Contents  Net Domestic and International RevenuesThree Months
    
    
    
    
    
    
    Three MonthsEnded
    
    
    Percentage
    
    
    Ended
    
    
    PercentageApril 2,
    
    
    of Net
    
    
    March 27,
    
    
    Of Net
    
    
    Increase/
    
    
    Percentage(dollars in thousands)
    
    2006
    
    
    Revenues
    
    
    2005
    
    
    Revenues
    
    
    Decrease
    
    
    ChangeDomestic
    
    $
    48,065
    
    
    
    54
    %
    
    $
    57,848
    
    
    
    57
    %
    
    $
    (9,783
    )
    
    
    (17
    %)Pacific Rim
    
    
    12,723
    
    
    
    14
    %
    
    
    15,780
    
    
    
    15
    %
    
    
    (3,057
    )
    
    
    (19
    %)Europe and rest of world
    
    
    28,507
    
    
    
    32
    %
    
    
    28,952
    
    
    
    28
    %
    
    
    (445
    )
    
    
    (2
    %)Total net revenues
    
    $
    89,295
    
    
    
    100
    %
    
    $
    102,580
    
    
    
    100
    %
    
    $
    (13,285
    )
    
    
    (13
    %)
  Gross Profit.
 Engineering and Development.
 Selling and Marketing.
 20
    Table of Contents  General and Administrative.
 Amortization of Other Intangible Assets.
 Nonoperating Income.
 Income Taxes
 Nine months ended April 2, 2006 compared to nine months ended March 27, 2005:
 Net Revenues.
  21
    Table of Contents  Net Revenues by Product LineNine Months
    
    
    
    
    
    
    Nine MonthsEnded
    
    
    Percentage
    
    
    Ended
    
    
    Percentage
    
    
    
    
    
    
    PercentageApril 2,
    
    
    of Net
    
    
    March 27,
    
    
    of Net
    
    
    Increase/
    
    
    Change,(dollars in thousands)
    
    2006
    
    
    Revenues
    
    
    2005
    
    
    Revenues
    
    
    (Decrease)
    
    
    if meaningfulFibre Channel
    
    $
    303,721
    
    
    
    100
    %
    
    $
    267,429
    
    
    
    100
    %
    
    $
    36,292
    
    
    
    14
    %IP networking
    
    
    213
    
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    179
    
    
    
    Other
    
    
    8
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    (5
    )
    
    
    Total net revenues
    
    $
    303,942
    
    
    
    100
    %
    
    $
    267,476
    
    
    
    100
    %
    
    $
    36,466
    
    
    
    14
    %
  Net Revenues by Major CustomersDirect Revenues
    
    
    Total Direct and Indirect Revenues(1)Nine Months
    
    
    Nine Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedApril 2,
    
    
    March 27,
    
    
    April 2,
    
    
    March 27,2006
    
    
    2005
    
    
    2006
    
    
    2005Net revenue percentage(2):EMC
    
    
    
    
    
    
    
    
    
    
    24
    %
    
    
    19
    %Hewlett-Packard
    
    
    10
    %
    
    
    13
    %
    
    
    10
    %
    
    
    15
    %IBM
    
    
    30
    %
    
    
    30
    %
    
    
    30
    %
    
    
    30
    %Info-X
    
    
    22
    %
    
    
    15
    %
    
    
    
    
    
    
    
 
 (1)
    
    Customer-specific models sold indirectly are included with the OEMs revenues in
these columns rather than as revenues for the distributors, resellers or other third parties.(2)
    
    Amounts less than 10 percent are not presented.   Net Revenues by Sales ChannelNine Months
    
    
    
    
    
    
    Nine MonthsEnded
    
    
    Percentage
    
    
    Ended
    
    
    Percentage
    
    
    
    
    
    
    PercentageApril 2,
    
    
    of Net
    
    
    March 27,
    
    
    of Net
    
    
    
    
    
    
    Change,(dollars in thousands)
    
    2006
    
    
    Revenues
    
    
    2005
    
    
    Revenues
    
    
    Increase
    
    
    if meaningfulOEM
    
    $
    192,179
    
    
    
    63
    %
    
    $
    176,219
    
    
    
    66
    %
    
    $
    15,960
    
    
    
    9
    %Distribution
    
    
    111,609
    
    
    
    37
    %
    
    
    90,816
    
    
    
    34
    %
    
    
    20,793
    
    
    
    23
    %Other
    
    
    154
    
    
    
    
    
    
    
    441
    
    
    
    
    
    
    
    (287
    )
    
    
    Total net
revenues
    
    $
    303,942
    
    
    
    100
    %
    
    $
    267,476
    
    
    
    100
    %
    
    $
    36,466
    
    
    
    14
    %
  22
    Table of Contents  Net Domestic and International RevenuesNine Months
    
    
    
    
    
    Nine MonthsEnded
    
    
    Percentage
    
    
    Ended
    
    
    PercentageApril 2,
    
    
    of Net
    
    
    March 27,
    
    
    of Net
    
    
    
    
    
    
    Percentage(dollars in thousands)
    
    2006
    
    
    Revenues
    
    
    2005
    
    
    Revenues
    
    
    Increase
    
    
    ChangeDomestic
    
    $
    164,208
    
    
    
    54
    %
    
    $
    146,218
    
    
    
    55
    %
    
    $
    17,990
    
    
    
    12
    %Pacific Rim
    
    
    41,680
    
    
    
    14
    %
    
    
    39,461
    
    
    
    15
    %
    
    
    2,219
    
    
    
    6
    %Europe and rest of
world
    
    
    98,054
    
    
    
    32
    %
    
    
    81,797
    
    
    
    30
    %
    
    
    16,257
    
    
    
    20
    %Total net revenues
    
    $
    303,942
    
    
    
    100
    %
    
    $
    267,476
    
    
    
    100
    %
    
    $
    36,466
    
    
    
    14
    %
  Gross Profit.
 Engineering and Development.
 Selling and Marketing.
 General and Administrative.
 23
    Table of Contents  Amortization of Other Intangible Assets.
 Impairment of Goodwill.
 Nonoperating Income.
 Income Taxes
 Critical Accounting Policies
  24
    Table of Contents  Revenue Recognition
 Warranty.
 Allowance for Doubtful Accounts
 Intangibles and Other Long-Lived Assets
 Inventories
 Income Taxes
 25
    Table of Contents  Stock-Based Compensation
 Liquidity and Capital Resources
     .
  26
    Table of Contents  www.iposecuritieslitigation.com
     27
    Table of Contents  Payments Due by Period(in thousands)Less than 1
    
    
    1-3
    
    
    4-5Total
    
    
    Year(1)
    
    
    Years(2)
    
    
    Years(3)
    
    
    After 5 YearsConvertible subordinated
notes and interest
(4)
    
    $
    236,590
    
    
    $
    295
    
    
    $
    236,295
    
    
    $
    
    
    
    $
    Leases
    
    
    11,225
    
    
    
    441
    
    
    
    4,001
    
    
    
    3,963
    
    
    
    2,820Inventory purchase commitments
    
    
    23,542
    
    
    
    23,542
    
    
    
    
    
    
    
    
    
    
    
    Other commitments
    
    
    1,522
    
    
    
    1,522
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    272,879
    
    
    $
    25,800
    
    
    $
    240,296
    
    
    $
    3,963
    
    
    $
    2,820
 
 (1)
    
    Fiscal year ending July 2, 2006.(2)
    
    Fiscal years ending July 1, 2007, and June
29, 2008(3)
    
    Fiscal years ending June 28, 2009, and June
27, 2010.(4)
    
    The principal payment related to the
remaining outstanding 0.25 percent contingent convertible subordinated notes of
$236.0 million is shown as a payment in the period for the fiscal years ending
July 2007 and June 2008 above as holders of these 20-year notes may require us
to purchase the notes for cash by giving us written notice as early as 20
business days prior to each of December 15, 2006, December 15, 2008, December
15, 2013, and December 15, 2018. 28
    Table of Contents  Risk Factors
 A downturn in information technology spending in general or spending on computer and storage
systems in particular could adversely affect our revenues and results of operations.
  Our business depends upon the continued growth of the Fibre Channel storage networking market, and
our business will be adversely affected if such growth does not occur or occurs more slowly than we
anticipate.
  Because a significant portion of our revenues are generated from sales to a limited number of
customers, none of which are the subject of exclusive or long-term contracts, the loss of one or
more of these customers, or our customers failure to make timely payments to us, could adversely
affect our business.
    29
    Table of Contents  Our markets are highly competitive and our business and results of operations may be adversely
affected by entry of new competitors into the markets, aggressive pricing and the introduction or
expansion of competitive products and technologies.
   Our operating results are difficult to forecast and could be adversely affected by many factors,
and our stock price may decline if our results fail to meet expectations.
  
    
    changes in the size, mix, timing and terms of OEM and other customer orders;
    
    changes in the sales and deployment cycles for our products and/or desired inventory
levels for our products;
    
    acquisitions or strategic investments by our customers, competitors or us;
    
    the timing and market acceptance of new or enhanced product introductions by us, our OEM
customers and/or competitors;
    
    market share losses or difficulty in gaining incremental market share growth;
    
    fluctuations in product development, procurement, resource utilization and other operating expenses;
    
    component shortages;
    
    reduced demand from our customers if there is a shortage of, or difficulties in
acquiring, components or other products, such as Fibre Channel disk drives and optical
modules, used in conjunction with our products in the deployment of systems;
    
    the inability of our electronics manufacturing service providers to produce and
distribute our products in a timely fashion;
    
    difficulties with updates, changes or additions to our information technology systems;
    
    breaches of our network security, including viruses;
 30
    Table of Contents  
    
    changes in general social and economic conditions, including but not limited to natural
disasters, terrorism, public health and slower than expected market growth, with resulting
changes in customer technology budgeting and spending;
    
    changes in technology, industry standards or consumer preferences;
    
    seasonality; and
    
    changes in our accounting or other policies resulting from the adoption of new laws,
regulations or pronouncements.
  Our relatively small backlog of unfilled orders, possible customer delays or deferrals and our
tendency to generate a large percentage of our quarterly sales near the end of the quarter
contribute to possible fluctuations in our operating results that could have an adverse impact on
our results of operations and stock price.
  Our industry is subject to rapid technological change and we must keep pace with the changes to
successfully compete.
  We have experienced losses in our history and may experience losses in our future that may
adversely affect our stock price and financial condition.
  31
    Table of Contents  The migration of our customers toward newer product platforms may have a significant adverse
effect.
  Any failure of our OEM customers to keep up with rapid technological change and successfully market
and sell systems that incorporate new technologies could adversely affect our business.
  Rapid changes in the evolution of technology, including the unexpected extent or timing of the
transition from HBA solutions or embedded switch box solutions to lower-priced ASIC solutions,
could adversely affect our business.
  If customers elect to utilize lower-end HBAs in higher-end environments or applications, our
business could be negatively affected.
  A decrease in the average unit selling prices and/or an increase in the manufactured cost of our
products could adversely affect our revenue, gross margins and financial performance.
  Delays in product development could adversely affect our business.
  
    
    difficulties in hiring and retaining necessary employees and independent contractors;
    
    difficulties in reallocating engineering resources and other resource limitations;
 32
    Table of Contents  
    
    unanticipated engineering or manufacturing complexity, including from third-party
suppliers of intellectual property such as foundries of our ASICs;
    
    undetected errors or failures in software, firmware and hardware;
    
    changing OEM product specifications;
    
    delays in the acceptance or shipment of products by OEM customers; and
    
    changing market or competitive product requirements.
  Our joint development activities may result in products that are not commercially successful or
that are not available in a timely fashion.
   A change in our business relationships with our third-party suppliers or our Electronics
Manufacturing Service providers or EMS providers, could adversely affect our business.
  
    
    discontinued production by a supplier;
    
    required long-term purchase commitments;
    
    undetected errors, failures or production quality issues, including projected failures
that may exceed epidemic failure rates specified in agreements with our customers or that
may require us to make concessions or accommodations for continuing customer relationships;
    
    timeliness of product delivery;
    
    sole sourcing and components made by a small number of suppliers, including the
inability to obtain components and finished goods at reasonable cost from such sources and
suppliers;
    
    financial stability and viability of our suppliers and EMS providers;
    
    changes in business strategies of our suppliers and EMS providers;
    
    increases in manufacturing costs due to lower volumes or more complex manufacturing
process than anticipated;
    
    disruption in shipping channels;
 33
    Table of Contents  
    
    natural disasters;
    
    inability or unwillingness of our suppliers or EMS providers to continue their business with us;
    
    environmental, tax or legislative changes in the location where our products are
produced or delivered, including implementation of European Union Directives 2002/95/EC
(RoHS) and 2002/96/EC (WEEE) ;
    
    difficulties associated with foreign operations; and
    
    market shortages.
    If our intellectual property protections are inadequate, it could adversely affect our business.
     Third-party claims of intellectual property infringement could adversely affect our business.
  34
    Table of Contents  The inability or increased cost of attracting, motivating or retaining key managerial and technical
personnel could adversely affect our business.
  Our international business activities subject us to risks that could adversely affect our business.
  
    
    the imposition of or changes in governmental controls, taxes, tariffs, trade
restrictions and regulatory requirements;
    
    the costs and risks of localizing products for foreign countries;
    
    longer accounts receivable payment cycles;
    
    changes in the value of local currencies relative to our functional currency;
    
    import and export restrictions;
    
    loss of tax benefits, or increases in tax expenses, due to international production;
    
    general economic and social conditions within foreign countries;
    
    taxation in multiple jurisdictions; and
    
    political instability, war or terrorism.
  35
    Table of Contents  Potential acquisitions or strategic investments may be more costly or less profitable than
anticipated and may adversely affect the price of our company stock.
  
    
    difficulties in the assimilation of the operations, technologies, products and personnel
of the acquired company;
    
    purchased technology that is not adopted by customers in the way or the time frame we anticipated;
    
    the diversion of managements attention from other business concerns;
    
    risks of entering markets in which we have limited or no prior experience;
    
    risks associated with assuming the legal obligations of the acquired company;
    
    minority interest in a company, resulting from a strategic investment, that could have
an impact on our results;
    
    risks related to the effect that the acquired companys internal control processes might
have on our financial reporting and managements report on our internal controls over
financial reporting;
    
    the potential loss of key employees of the company we invested in or acquired;
    
    there may exist unknown defects of an acquired companys products or assets that may not
be identified due to the inherent limitations involved in the due diligence process of an
acquisition; and
    
    changes in generally accepted accounting principles regarding the accounting treatment
for acquisitions to a more or less favorable treatment than is currently proscribed.
  Our acquisition of Aarohi Communications, Inc. on May 1, 2006 involves numerous risks beyond those
listed above, including, but not limited to:
 
    
    difficulties and expenses in assimilating and retaining employees, including integrating
teams that have not previously worked together;
    
    difficulties in creating and maintaining uniform standards, controls, procedures and
policies;
    
    different geographic locations of the principal operations of Emulex and Aarohi and
difficulties relating to management of Aarohis operations and personnel in India;
    
    the location of a principal product development facility in San Jose, California near a
major earthquake fault;
    
    currency conversion exposure for payroll and other expenses of a principal product
development facility in Bangalore, India;
    
    the attainment of cost efficiencies in a principal product development facility in Bangalore, India and
    
    potential adverse reactions of existing customers and strategic relationship partners.
 36
    Table of Contents  Our stock price is volatile, which has and may result in lawsuits against us and our officers and
directors.
  
    
    quarterly variations in customer demand and operating results;
    
    announcements of new products by us or our competitors;
    
    the gain or loss of significant customers or design wins;
    
    changes in analysts earnings estimates;
    
    changes in analyst recommendations, price targets or other parameters that may not be
related to earnings estimates;
    
    rumors or dissemination of false information;
    
    pricing pressures;
    
    short selling of our common stock;
    
    general conditions in the computer, storage or communications markets; and
    
    events affecting other companies that investors deem to be comparable to us.
  Terrorist activities and resulting military and other actions could adversely affect our business.
  Our corporate offices and principal product development facilities are located in a region that is
subject to earthquakes and other natural disasters.
  37
    Table of Contents  Our shareholder rights plan, certificate of incorporation and Delaware law could adversely affect
the performance of our stock.
  Our system of internal controls may be inadequate.
  Changes in laws, regulations and financial accounting standards may affect our reported results of
operations.
  The final determination of our income tax liability may be materially different from our income tax
provisions and accruals.
  We may need additional capital in the future and such additional financing may not be available on
favorable terms.
  38
    Table of Contents  
    
    take advantage of unanticipated opportunities, including more rapid international
expansion or acquisitions of complementary businesses or technologies;
    
    develop new products or services;
    
    repay outstanding indebtedness; and
    
    respond to unanticipated competitive pressures.
   Conversion of our outstanding notes would dilute the ownership interest of existing stockholders.
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Interest Rate Sensitivity
   Foreign Currency
  39
    Table of Contents  Item 4. Controls and Procedures
   40
    Table of Contents  PART II: OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Litigation
 www.iposecuritieslitigation.com
    
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  41
    Table of Contents  Item 6. Exhibits
 Exhibit 3.1
    
    Certificate of Incorporation, as amended (incorporated by reference to Exhibit
3.1 to the Companys 1997 Annual Report on Form 10-K).Exhibit 3.2
    
    Certificate of Amendment of Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.4 to the Companys Quarterly Report on Form
10-Q for the quarterly period ended December 31, 2000).Exhibit 3.3
    
    Amended and restated Bylaws of the Company (incorporated by reference to Exhibit
3.1 to the Companys Current Report on Form 8-K filed on August 30, 2005).Exhibit 3.4
    
    Certificate of Designations of Series A Junior Participating Preferred Stock
(incorporated by reference to Exhibit 4 to the Companys Current Report on Form 8-K
filed February 2, 1989).Exhibit 4.1
    
    Rights Agreement dated January 19, 1989, as amended (incorporated by reference
to Exhibit 4 to the Companys Current Report on Form 8-K filed February 2, 1989).Exhibit 4.2
    
    Certificate regarding extension of Final Expiration Date of Rights Agreement
dated January 18, 1999 (incorporated by reference to Exhibit 4.2 of Amendment No. 2 to
the Registration Statement on Form S-3, filed on May 17, 1999).Exhibit 4.3
    
    Form of 0.25% Convertible Subordinated Note due December 15, 2023 (incorporated
by reference to Exhibit 4.6 to the Companys Quarterly Report on Form 10-Q for the
quarterly period ended December 28, 2003).Exhibit 4.4
    
    Indenture between the Company, as Issuer, and State Street Bank and Trust
Company of California, N.A., as Trustee, dated December 12, 2003, related to the
Companys 0.25% Convertible Subordinated Notes due 2023 (incorporated by reference to
Exhibit 4.7 to the Companys Quarterly Report on Form 10-Q for the quarterly period
ended December 28, 2003).Exhibit 4.5
    
    Registration Rights Agreement between the Company and Credit Suisse First Boston
Corporation dated December 12, 2003, related to the Companys 0.25% Convertible
Subordinated Notes due 2023 (incorporated by reference to Exhibit 4.8 to the Companys
Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2003).Exhibit 10.1
    
    Form of 2005 Equity Incentive Plan Restricted Stock Award Agreement.Exhibit 10.2
    
    Form of Notice of Grant of Restricted Stock Award under 2005 Equity Incentive Plan.Exhibit 31A
    
    Certification of the Principal Executive Officer Pursuant to 17 CFR
240.13a-14(a), as Adopted Pursuant to § 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31B
    
    Certification of the Principal Financial Officer Pursuant to 17 CFR
240.13a-14(a), as Adopted Pursuant to § 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to § 906 of
the Sarbanes-Oxley Act of 2002.
 42
    Table of Contents  SIGNATURES
   EMULEX CORPORATIONBy:
    
    /s/ Paul F. Folino
Paul F. Folino
Chairman of the Board and Chief Executive
OfficerBy:
    
    /s/ Michael J. Rockenbach
Michael J. Rockenbach
Executive Vice President and Chief Financial Officer
(Principal Financial and Chief Accounting Officer)
 43
    Table of Contents  Exhibit Index
 Exhibit 3.1
    
    Certificate of Incorporation, as amended (incorporated by reference to
Exhibit 3.1 to the Companys 1997 Annual Report on Form 10-K).Exhibit 3.2
    
    Certificate of Amendment of Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.4 to the Companys Quarterly Report on Form
10-Q for the quarterly period ended December 31, 2000).Exhibit 3.3
    
    Amended and restated Bylaws of the Company (incorporated by reference to Exhibit
3.1 to the Companys Current Report on Form 8-K filed on August 30, 2005).Exhibit 3.4
    
    Certificate of Designations of Series A Junior Participating Preferred Stock
(incorporated by reference to Exhibit 4 to the Companys Current Report on Form 8-K
filed February 2, 1989).Exhibit 4.1
    
    Rights Agreement dated January 19, 1989, as amended (incorporated by reference
to Exhibit 4 to the Companys Current Report on Form 8-K filed February 2, 1989).Exhibit 4.2
    
    Certificate regarding extension of Final Expiration Date of Rights Agreement
dated January 18, 1999 (incorporated by reference to Exhibit 4.2 of Amendment No. 2 to
the Registration Statement on Form S-3, filed on May 17, 1999).Exhibit 4.3
    
    Form of 0.25% Convertible Subordinated Note due December 15, 2023 (incorporated
by reference to Exhibit 4.6 to the Companys Quarterly Report on Form 10-Q for the
quarterly period ended December 28, 2003).Exhibit 4.4
    
    Indenture between the Company, as Issuer, and State Street Bank and Trust
Company of California, N.A., as Trustee, dated December 12, 2003, related to the
Companys 0.25% Convertible Subordinated Notes due 2023 (incorporated by reference to
Exhibit 4.7 to the Companys Quarterly Report on Form 10-Q for the quarterly period
ended December 28, 2003).Exhibit 4.5
    
    Registration Rights Agreement between the Company and Credit Suisse First Boston
Corporation dated December 12, 2003, related to the Companys 0.25% Convertible
Subordinated Notes due 2023 (incorporated by reference to Exhibit 4.8 to the Companys
Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2003).Exhibit 10.1
    
    Form of 2005 Equity Incentive Plan Restricted Stock Award Agreement.Exhibit 10.2
    
    Form of Notice of Grant of Restricted Stock Award under 2005 Equity Incentive Plan.Exhibit 31A
    
    Certification of the Principal Executive Officer Pursuant to 17 CFR
240.13a-14(a), as Adopted Pursuant to § 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31B
    
    Certification of the Principal Financial Officer Pursuant to 17 CFR
240.13a-14(a), as Adopted Pursuant to § 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to § 906 of
the Sarbanes-Oxley Act of 2002.