Commitments and Contingencies

12 Months Ended

Jun. 26, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

The Company has operating leases for the use of certain real estate and equipment.  Substantially all operating leases are non-cancelable or cancelable only by the payment of penalties.  All lease payments are based on the lapse of time but include, in some cases, payments for insurance, maintenance and property taxes.  There are no purchase options on operating leases at favorable terms, but most real estate leases have one or more renewal options.  Certain leases on real estate are subject to annual escalations for increases in utilities and property taxes.  Total rental expense on all operating leases totaled $9.8 million, $10.2 million and $11.5 million for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, respectively. The Company had outstanding purchase commitments for capital expenditures of approximately $23.5 million at June 26, 2011.  The Company had no capital lease obligations as of June 26, 2011.

As of June 26, 2011, minimum fixed rentals required for the next five years and thereafter under operating leases are as follows (in millions):

Fiscal Year	Minimum Fixed Rentals
2012	$	9.4
2013		4.2
2014		2.9
2015		2.1
2016		1.1
Thereafter		2.1
Total	$	21.8

During fiscal year 2011, the Company entered into agreements with two external foundries to secure wafer fabrication capacity.  Under these agreements the Company advanced to the foundries approximately $5.8 million on account of future purchases.  These advances were recorded in prepaid expenses and other receivables and other assets and will be credited against future purchases from the foundries to the extent the Company purchases certain minimum quantities of wafers each quarter during the next two years.  Of the $5.8 million in advances, $4.8 million is subject to provisions that require the forfeiture of the portion of the prepayment applicable to a given fiscal quarter if the Company does not purchase the minimum required amounts for that quarter. The Company will assess the recoverability of the advanced payments on a quarterly basis.

In connection with the Divestiture, in fiscal year 2007 the Company recorded a provision of $18.6 million for certain tax obligations with respect to divested entities. In fiscal year 2008, the divested entities’ tax obligations increased to $20.7 million due to the impact of foreign currency translation on the underlying obligation partially offset by a decrease in the obligation resulting from the lapsing of a statute of limitation in a foreign tax jurisdiction.  In fiscal year 2009, the divested entities tax obligations decreased to $7.3 million due to settlement of tax audits, lapsing of statute of limitations, and the decrease from foreign currency redetermination on the underlying obligation partially offset by an increase in adjustments arising from the filing of amended tax returns.  In fiscal year 2010, the divested entities tax obligations decreased to $5.5 million due to lapsing of statute of limitations and the decrease from foreign currency redetermination of the underlying obligation. In fiscal 2011, a net release of $1.5 million was recorded and was primarily due to the lapse of applicable statutes of limitations.  The balance of the divested entities tax obligations is $4.0 million.

On February 3, 2011, the Company completed the Technology Acquisition.  The transaction agreement related to the Technology Acquisition includes contingent consideration payable upon the achievement of certain financial operating results.  The Company has accrued a liability of $0.4 million for the contingent consideration based upon a discounted cash flow analysis (See Note 2, “Business Acquisitions”).