Stock-Based Compensation (Tables)

6 Months Ended

Dec. 29, 2013

Computation of Fair Value of Compensatory Elements Related to Equity Incentive Plan

The assumptions used to compute the fair value of stock option grants under the 2005 Equity Incentive Plan (Equity Incentive Plan) for the three and six months ended December 29, 2013 and December 30, 2012 were:

	Three Months Ended			Six months ended
	December 29, 2013	December 30, 2012	(1)	December 29, 2013	December 30, 2012
Expected volatility	38% - 42%	N/A		37% - 42%	46% - 48%
Weighted average expected volatility	40%	N/A		39%	47%
Expected dividends	—%	N/A		—%	—%
Expected term (in years)	3.83 - 5.83	N/A		3.83 - 5.83	3.77 - 5.77
Weighted average expected term (in years)	4.67	N/A		4.68	4.61
Risk-free rate	1.07% - 1.78%	N/A		1.07% - 2.04%	0.53% - 0.94%

Computation of Fair Value of Compensatory Element Related to Employee Stock Purchase Plan

The assumptions used to compute the fair value of the compensatory element related to the shares to be purchased under the Emulex Corporation Employee Stock Purchase Plan (Purchase Plan) for the three and six months ended December 29, 2013 and December 30, 2012 were:

	Three Months Ended		Six months ended
	December 29, 2013	December 30, 2012	December 29, 2013	December 30, 2012
Expected volatility	30%	45%	30%	45%
Expected dividends	—%	—%	—%	—%
Expected term (in years)	0.49	0.49	0.49	0.49
Risk-free rate	0.08%	0.16%	0.08%	0.16%

Stock-Based Compensation Expense, by Functional Line Item in Condensed Consolidated Statements of Operations

A summary of stock-based compensation expense, by functional line item in the condensed consolidated statements of operations is as follows:

	Three Months Ended				Six months ended
	December 29, 2013		December 30, 2012		December 29, 2013		December 30, 2012
	(in thousands)
Cost of goods sold	$	147	$	181	$	236	$	496
Engineering and development	1,132		2,214		3,036		4,912
Sales and marketing	874		941		2,076		1,686
General and administrative	1,591		2,039		2,968		3,835
	$	3,744	$	5,375	$	8,316	$	10,929

Summary of Option Activity Under Plans

A summary of stock option activity for the six months ended December 29, 2013 is as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in years)	(in millions)
Options outstanding at June 30, 2013	4,220,262		$	12.28	2.47	$	0.6
Options granted	148,324		$	7.71
Options exercised	(65,586	)	$	4.83
Options expired	(833,142	)	$	19.13
Options forfeited	(45,875	)	$	7.66
Options outstanding at December 29, 2013	3,423,983		$	10.62	2.45	$	0.5
Options vested and expected to vest at December 29, 2013	3,392,376		$	10.65	2.41	$	0.5
Options exercisable at December 29, 2013	2,886,304		$	11.22	1.96	$	0.4

Summary of Outstanding and Unvested Stock Award Activity

A summary of outstanding and unvested stock awards activity for six months ended December 29, 2013 is as follows:

	Number of Awards		Weighted Average Grant Date Fair Value
Awards outstanding at June 30, 2013	3,413,522		$	7.74
Awards granted	1,019,294		$	7.86
Awards vested	(1,215,420	)	$	8.14
Awards canceled / forfeited	(398,952	)	$	7.73
Awards outstanding at December 29, 2013	2,818,444		$	7.54
Awards vested and expected to vest at December 29, 2013	2,589,881

Cash Settled Unit Awards [Member]

Summary of Cash-Settled Unit Award Activity

A summary of Cash-Settled Unit Award activity for the six months ended December 29, 2013 is as follows:

	Number of Awards		Weighted Average Grant Date Fair Value
Awards outstanding at June 30, 2013	552,723		$	7.41
Awards granted	4,242		$	7.74
Awards vested	(106,862	)	$	7.74
Awards canceled / forfeited	(20,711	)	$	7.47
Awards outstanding at December 29, 2013	429,392		$	7.33
Awards vested and expected to vest at December 29, 2013	394,295