10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 28, 2014

Commission file number 0-23298

QLogic Corporation

(Exact name of registrant as specified in its charter)

Delaware	33-0537669
(State of incorporation)	(I.R.S. Employer Identification No.)

26650 Aliso Viejo Parkway

Aliso Viejo, California 92656

(Address of principal executive office and zip code)

(949) 389-6000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	¨	Non-accelerated filer	¨	Smaller reporting company	¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

As of January 30, 2015, 87,346,000 shares of the Registrant’s common stock were outstanding.

QLOGIC CORPORATION

INDEX

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of December 28, 2014 and March 30, 2014		1
	Condensed Consolidated Statements of Income for the three and nine months ended December 28, 2014 and December 29, 2013		2
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 28, 2014 and December 29, 2013		3
	Condensed Consolidated Statements of Cash Flows for the nine months ended December 28, 2014 and December 29, 2013		4
	Notes to Condensed Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		20
Item 4.	Controls and Procedures		20
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		21
Item 1A.	Risk Factors		21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 6.	Exhibits		34
	Signatures		35

i

PART I.

FINANCIAL INFORMATION

Item 1. Financial Statements

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 28, 2014			March 30, 2014
	(Unaudited; In thousands, except share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	95,508		$	91,258
Marketable securities		192,424			186,783
Accounts receivable, less allowance for doubtful accounts of $1,583 and $1,186 as of December 28, 2014 and March 30, 2014, respectively		94,705			65,213
Inventories		30,939			18,036
Deferred tax assets		15,481			15,080
Other current assets		24,400			16,590
Total current assets		453,457			392,960
Property and equipment, net		74,841			86,527
Goodwill		167,232			167,232
Purchased intangible assets, net		82,091			95,163
Deferred tax assets		32,723			32,827
Other assets		21,157			23,554
	$	831,501		$	798,263
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	38,804		$	30,657
Accrued compensation		19,455			26,956
Accrued taxes		3,511			981
Deferred revenue		3,469			3,954
Other current liabilities		5,999			16,123
Total current liabilities		71,238			78,671
Accrued taxes		15,166			17,095
Other liabilities		8,282			9,071
Total liabilities		94,686			104,837
Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.001 par value; 500,000,000 shares authorized; 214,979,000 and 213,786,000 shares issued as of December 28, 2014 and March 30, 2014, respectively		215			214
Additional paid-in capital		974,740			958,008
Retained earnings		1,711,516			1,672,071
Accumulated other comprehensive income (loss)		(520	)		435
Treasury stock, at cost: 127,633,000 and 126,616,000 shares as of December 28, 2014 and March 30, 2014, respectively		(1,949,136	)		(1,937,302	)
Total stockholders’ equity		736,815			693,426
	$	831,501		$	798,263

See accompanying notes to condensed consolidated financial statements.

1

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended					Nine Months Ended
	December 28, 2014			December 29, 2013		December 28, 2014		December 29, 2013
	(Unaudited; In thousands, except per share amounts)
Net revenues	$	140,203		$	119,449	$	387,155	$	345,187
Cost of revenues		57,802			38,446		158,649		111,378
Gross profit		82,401			81,003		228,506		233,809
Operating expenses:
Engineering and development		34,802			35,235		108,103		110,412
Sales and marketing		16,153			16,113		47,640		51,957
General and administrative		7,677			7,406		25,274		22,698
Special charges		69			1,947		4,872		18,329
Total operating expenses		58,701			60,701		185,889		203,396
Operating income		23,700			20,302		42,617		30,413
Interest and other income (expense), net		(269	)		970		169		1,768
Income before income taxes		23,431			21,272		42,786		32,181
Income taxes		996			686		3,341		3,668
Net income	$	22,435		$	20,586	$	39,445	$	28,513
Net income per share:
Basic	$	0.26		$	0.24	$	0.45	$	0.32
Diluted	$	0.25		$	0.24	$	0.45	$	0.32
Number of shares used in per share calculations:
Basic		87,728			86,855		87,679		87,810
Diluted		88,527			87,186		88,294		88,209

See accompanying notes to condensed consolidated financial statements.

2

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended						Nine Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013
	(Unaudited; In thousands)
Net income	$	22,435		$	20,586		$	39,445		$	28,513
Other comprehensive income, net of income taxes:
Changes in fair value of marketable securities:
Changes in unrealized gains		(329	)		(35	)		(477	)		(1,354	)
Net realized losses (gains) reclassified into earnings		(3	)		(84	)		124			(343	)
		(332	)		(119	)		(353	)		(1,697	)
Foreign currency translation adjustments		(391	)		101			(602	)		59
Total other comprehensive loss		(723	)		(18	)		(955	)		(1,638	)
Comprehensive income	$	21,712		$	20,568		$	38,490		$	26,875

See accompanying notes to condensed consolidated financial statements.

3

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	December 28, 2014			December 29, 2013
	(Unaudited; In thousands)
Cash flows from operating activities:
Net income	$	39,445		$	28,513
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		35,511			23,620
Stock-based compensation		15,178			18,047
Deferred income taxes		(316	)		(5,355	)
Asset impairments		1,455			3,129
Other non-cash items		1,257			2,577
Changes in operating assets and liabilities:
Accounts receivable		(29,892	)		(5,088	)
Inventories		(12,903	)		6,116
Other assets		1,236			537
Accounts payable		4,121			(1,919	)
Accrued compensation		(7,501	)		(2,719	)
Accrued taxes, net		1,147			7,734
Other liabilities		(11,398	)		2,841
Net cash provided by operating activities		37,340			78,033
Cash flows from investing activities:
Purchases of available-for-sale securities		(123,431	)		(259,008	)
Proceeds from sales and maturities of available-for-sale securities		116,260			261,253
Purchases of property and equipment		(15,420	)		(21,043	)
Net cash used in investing activities		(22,591	)		(18,798	)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock-based awards		5,144			6,756
Minimum tax withholding paid on behalf of employees for restricted stock units		(3,589	)		(4,584	)
Purchases of treasury stock		(11,834	)		(47,785	)
Other financing activities		(220	)		(156	)
Net cash used in financing activities		(10,499	)		(45,769	)
Net increase in cash and cash equivalents		4,250			13,466
Cash and cash equivalents at beginning of period		91,258			95,532
Cash and cash equivalents at end of period	$	95,508		$	108,998

See accompanying notes to condensed consolidated financial statements.

4

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

In the opinion of management of QLogic Corporation (QLogic or the Company), the accompanying unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2014. The results of operations for the three and nine months ended December 28, 2014 are not necessarily indicative of the results that may be expected for the entire fiscal year. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. The Company evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment. Among the significant estimates affecting the consolidated financial statements are those related to revenue recognition, stock-based compensation, income taxes, marketable securities, inventories, goodwill and other intangible assets, and long-lived assets. The actual results experienced by the Company could differ materially from management’s estimates.

Recently Adopted Accounting Standards

In July 2013, the Financial Accounting Standards Board issued an accounting standard update that requires certain unrecognized tax benefits be presented as a reduction to deferred tax assets rather than as liabilities when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The Company adopted this standard in the first quarter of fiscal 2015 on a prospective basis and the adoption did not have a material effect on the Company’s condensed consolidated balance sheet.

Note 2. Business Acquisition

Broadcom Corporation

In March 2014, the Company acquired certain 10/40/100Gb Ethernet controller-related assets from Broadcom Corporation (Broadcom) primarily relating to the NetXtreme^® II Ethernet controller family and licensed certain related intellectual property under non-exclusive licenses for total cash consideration of $147.8 million and the assumption of certain liabilities.

In the fourth quarter of fiscal 2014, the Company preliminarily estimated the fair value of the assets acquired and liabilities assumed and allocated a portion of the total purchase consideration to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date. Subsequently, the Company completed the identification and valuation of certain acquired property and equipment and also completed the transfer of property and equipment in a foreign jurisdiction that was subject to local compliance requirements, resulting in a total increase in property and equipment of $1.6 million with a corresponding decrease in goodwill. During the three months ended December 28, 2014, the Company completed the final assessment of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, including the fair value measurement of developed technology, in-process research and development (IPR&D) and customer relationship intangible assets, resulting in an increase in identifiable intangible assets acquired of $25.3 million with a corresponding decrease in goodwill. The Company’s condensed consolidated balance sheet as of March 30, 2014 has been revised to retroactively reflect the final allocation of the purchase price. The excess of the total purchase consideration over the aggregate estimated fair value of the net assets acquired was recorded as goodwill. The goodwill associated with this acquisition is expected to be tax deductible. The following table summarizes the final allocation of the purchase price to the fair value of the assets acquired and liabilities assumed:

	(In thousands)
Inventories	$	2,880
Other current assets		307
Property and equipment		4,070
Goodwill		56,256
Identifiable intangible assets		85,360
Accrued compensation		(987	)
Other current liabilities		(129	)
	$	147,757

5

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of the identifiable intangible assets acquired as part of the acquisition and their respective estimated useful lives is as follows:

	Weighted Average   Useful Lives		Amount
	(Years)		(In thousands)
Identifiable Intangible Assets:
Developed technology		5	$	58,760
In-process research and development		N/A		21,200
Customer relationships		8		5,400
			$	85,360

The Company believes the amounts recorded as developed technology, IPR&D and customer relationships represent the fair value of these identifiable intangible assets as of the acquisition date. These assets are measured at fair value on a nonrecurring basis and are categorized as Level 3 due to the use of significant unobservable inputs in the valuation.

The fair values of the identifiable intangible assets related to this acquisition were determined using the income approach. Under the income approach, expected future cash flows are estimated and discounted to their net present value at an appropriate risk-adjusted rate of return. Significant factors considered in the calculation of the rate of return are the weighted average cost of capital and the return on assets. For technology-related intangible assets, such as developed technology and IPR&D, additional factors considered include the risks inherent in the development process, the likelihood of achieving technological success and market acceptance. For IPR&D, the project is further analyzed to determine the unique technological innovations, the reliance on developed technology, if any, the existence of any alternative future use or current technological feasibility, and the complexity, cost and time to complete the remaining development. Future cash flows related to these identifiable intangible assets were estimated based on forecasted revenue and costs, taking into consideration expected product life cycles, market penetration and growth rates. The Company used risk adjusted discount rates of between 14.5% and 17.0% to discount the expected future cash flows under the income approach.

IPR&D is capitalized and accounted for as an indefinite-lived intangible asset. Once completed, IPR&D assets are reclassified to developed technology and amortized over their estimated useful lives. The IPR&D project acquired by the Company in March 2014 is related to next generation 40/100Gb Ethernet products. As of the acquisition date, the Company estimated that the project was 40% complete, had an estimated remaining cost to complete of $6 million and an estimated remaining time to complete of two years.

Note 3. Marketable Securities

The Company’s portfolio of available-for-sale marketable securities consists of the following:

	Amortized   Cost		Gross   Unrealized   Gains		Gross   Unrealized   Losses			Estimated   Fair Value
	(In thousands)
December 28, 2014
U.S. government and agency securities	$	44,077	$	11	$	(53	)	$	44,035
Corporate debt obligations		89,843		51		(287	)		89,607
Mortgage-backed securities		30,573		155		(95	)		30,633
Municipal bonds		20,163		68		(20	)		20,211
Other debt securities		7,951		1		(14	)		7,938
	$	192,607	$	286	$	(469	)	$	192,424
March 30, 2014
U.S. government and agency securities	$	49,237	$	16	$	(55	)	$	49,198
Corporate debt obligations		74,386		200		(72	)		74,514
Mortgage-backed securities		32,778		191		(187	)		32,782
Municipal bonds		24,989		133		(9	)		25,113
Other debt securities		5,178		3		(5	)		5,176
	$	186,568	$	543	$	(328	)	$	186,783

6

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The amortized cost and estimated fair value of debt securities as of December 28, 2014, by contractual maturity, are presented below. Expected maturities will differ from contractual maturities because the issuers of securities may have the right to repay obligations without prepayment penalties. Certain debt instruments, although possessing a contractual maturity greater than one year, are classified as short-term marketable securities based on their ability to be traded on active markets and availability for current operations.

	Amortized   Cost		Estimated   Fair Value
	(In thousands)
Due in one year or less	$	18,047	$	18,054
Due after one year through three years		144,154		143,896
Due after three years through five years		11,586		11,569
Due after five years		18,820		18,905
	$	192,607	$	192,424

The following table presents the Company’s marketable securities with unrealized losses by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 28, 2014 and March 30, 2014.

	Less Than 12 Months					12 Months or Greater					Total
Description of Securities	Fair     Value		Unrealized Losses			Fair     Value		Unrealized Losses			Fair     Value		Unrealized Losses
	(In thousands)
December 28, 2014
U.S. government and agency securities	$	31,711	$	(53	)	$	—	$	—		$	31,711	$	(53	)
Corporate debt obligations		65,215		(287	)		—		—			65,215		(287	)
Mortgage-backed securities		7,554		(29	)		6,088		(66	)		13,642		(95	)
Municipal bonds		6,111		(20	)		—		—			6,111		(20	)
Other debt securities		6,062		(14	)		—		—			6,062		(14	)
	$	116,653	$	(403	)	$	6,088	$	(66	)	$	122,741	$	(469	)
March 30, 2014
U.S. government and agency securities	$	26,879	$	(55	)	$	—	$	—		$	26,879	$	(55	)
Corporate debt obligations		19,906		(72	)		—		—			19,906		(72	)
Mortgage-backed securities		11,261		(145	)		2,838		(42	)		14,099		(187	)
Municipal bonds		3,322		(9	)		—		—			3,322		(9	)
Other debt securities		2,955		(5	)		—		—			2,955		(5	)
	$	64,323	$	(286	)	$	2,838	$	(42	)	$	67,161	$	(328	)

As of December 28, 2014 and March 30, 2014, the fair value of certain of the Company’s available-for-sale securities was less than their cost basis. Management reviewed various factors in determining whether to recognize an impairment charge related to these unrealized losses, including the current financial and credit market environment, the financial condition and near-term prospects of the issuer of the security, the magnitude of the unrealized loss compared to the cost of the investment, the length of time the investment had been in a loss position and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery of market value. As of December 28, 2014 and March 30, 2014, the Company determined that the unrealized losses were temporary in nature and recorded them as a component of accumulated other comprehensive income.

7

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 4. Fair Value of Financial Instruments

The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts receivable and accounts payable. The carrying value of accounts receivable and accounts payable approximates fair value.

A summary of the assets measured at fair value on a recurring basis as of December 28, 2014 and March 30, 2014 are as follows:

	Fair Value Measurements Using
	Level 1		Level 2		Total
	(In thousands)
December 28, 2014
Cash and cash equivalents	$	95,508	$	—	$	95,508
Marketable securities:
U.S. government and agency securities		44,035		—		44,035
Corporate debt obligations		—		89,607		89,607
Mortgage-backed securities		—		30,633		30,633
Municipal bonds		—		20,211		20,211
Other debt securities		—		7,938		7,938
		44,035		148,389		192,424
	$	139,543	$	148,389	$	287,932
March 30, 2014
Cash and cash equivalents	$	91,258	$	—	$	91,258
Marketable securities:
U.S. government and agency securities		49,198		—		49,198
Corporate debt obligations		—		74,514		74,514
Mortgage-backed securities		—		32,782		32,782
Municipal bonds		—		25,113		25,113
Other debt securities		—		5,176		5,176
		49,198		137,585		186,783
	$	140,456	$	137,585	$	278,041

The Company’s investments classified within Level 2 were primarily valued based on valuations obtained from a third-party pricing service. To estimate fair value, the pricing service utilizes industry-standard valuation models, including both income and market-based approaches for which all significant inputs are observable either directly or indirectly. The Company obtained documentation from the pricing service as to the methodology and summary of inputs used for the various types of securities. The pricing service maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. These observable inputs include reported trades and broker/dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. The Company compares valuation information from the pricing service with other pricing sources to validate the reasonableness of the valuations.

Note 5. Inventories

Components of inventories are as follows:

	December 28, 2014		March 30,     2014
	(In thousands)
Raw materials	$	1,974	$	2,041
Finished goods		28,965		15,995
	$	30,939	$	18,036

8

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 6. Purchased Intangible Assets

Purchased intangible assets consist of the following:

	December 28, 2014						March 30, 2014
	Gross   Carrying   Value		Accumulated Amortization		Net   Carrying   Value		Gross   Carrying   Value		Accumulated Amortization		Net   Carrying   Value
	(In thousands)
Developed technology	$	72,121	$	17,323	$	54,798	$	72,121	$	4,957	$	67,164
In-process research and development		21,200		—		21,200		21,200		—		21,200
Customer relationships		5,400		534		4,866		5,400		—		5,400
Other		3,829		2,602		1,227		3,829		2,430		1,399
	$	102,550	$	20,459	$	82,091	$	102,550	$	7,387	$	95,163

Note 7. Treasury Stock

Since fiscal 2003, the Company has had various stock repurchase programs that authorized the purchase of the Company’s outstanding common stock. In October 2014, the Company’s Board of Directors approved a program authorizing the repurchase of up to $100 million of the Company’s outstanding common stock over a period of up to 18 months. During the nine months ended December 28, 2014, the Company purchased 1.0 million shares of its common stock for an aggregate purchase price of $11.8 million. As of December 28, 2014, the Company had purchased a total of 127.6 million shares of common stock under these repurchase programs for an aggregate purchase price of $1.95 billion.

Repurchased shares have been recorded as treasury shares and will be held until the Company’s Board of Directors designates that these shares be retired or used for other purposes.

Note 8. Stock-Based Compensation

During the nine months ended December 28, 2014, the Company granted 2.2 million restricted stock units with a weighted average grant date fair value of $10.26 per share.

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

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands)
Cost of revenues	$	258	$	259	$	871	$	1,082
Engineering and development		2,243		2,462		7,523		9,070
Sales and marketing		1,182		1,251		3,265		4,274
General and administrative		1,220		1,086		3,519		3,621
	$	4,903	$	5,058	$	15,178	$	18,047

9

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 9. Special Charges

A summary of the special charges recorded during the three and nine months ended December 28, 2014 and December 29, 2013, respectively, is as follows:

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands)
Exit costs	$	69	$	1,947	$	3,361	$	15,900
Asset impairments		—		—		1,011		2,429
Other charges		—		—		500		—
	$	69	$	1,947	$	4,872	$	18,329

March 2014 Initiative

In March 2014, the Company commenced a restructuring plan (March 2014 Initiative) primarily designed to consolidate its Ethernet product roadmap following the acquisition of the Ethernet controller-related assets from Broadcom. This restructuring plan primarily included a workforce reduction and the consolidation and elimination of certain engineering activities. The Company completed these restructuring activities and all amounts were paid as of December 28, 2014.

During the nine months ended December 28, 2014, the Company recorded special charges of $3.6 million in connection with the March 2014 Initiative. Special charges for the nine months ended December 28, 2014 consisted of $2.6 million of exit costs and $1.0 million of asset impairment charges related to abandoned property and equipment. The exit costs consisted of severance and related costs associated with involuntarily terminated employees.

The aggregate amount of the exit costs recorded in connection with the March 2014 Initiative was $11.7 million and consisted of $7.5 million of workforce reduction costs and $4.2 million of contract cancellation and other costs.

Activity and liability balances for exit costs related to the March 2014 Initiative are as follows:

	Workforce Reduction			Contract Cancellation and Other			Total
	(In thousands)
Balance as of March 30, 2014	$	3,177		$	4,311		$	7,488
Charged to costs and expenses		2,693			(73	)		2,620
Payments		(5,870	)		(4,238	)		(10,108	)
Balance as of December 28, 2014	$	—		$	—		$	—

June 2013 Initiative

In June 2013, the Company commenced a restructuring plan (June 2013 Initiative) designed to enhance product focus and streamline business operations. The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, the Company ceased development of future application-specific integrated circuits (ASICs) for switch products.

During the three and nine months ended December 28, 2014, the Company recorded special charges of $0.1 million and $0.7 million in connection with the June 2013 Initiative, consisting of exit costs associated with severance and related costs for involuntarily terminated employees. Certain employees that were notified of their termination are required to provide future services for varying periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. The Company expects to incur approximately $1 million of additional severance costs in connection with these employees over the requisite service period.

The aggregate amount of the exit costs recorded in connection with the June 2013 Initiative is $18.1 million and consisted of $14.6 million of workforce reduction costs and $3.5 million of facilities and other costs.

10

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Activity and liability balances for exit costs related to the June 2013 Initiative are as follows:

	Workforce Reduction			Facilities and Other			Total
	(In thousands)
Balance as of March 30, 2014	$	3,528		$	4,621		$	8,149
Charged to costs and expenses		741			—			741
Payments		(1,798	)		(837	)		(2,635	)
Balance as of December 28, 2014	$	2,471		$	3,784		$	6,255

The total unpaid exit costs are expected to be paid over the terms of the related agreements through fiscal 2018. As of December 28, 2014, unpaid exit costs totaling $1.5 million and $4.8 million are included in other current liabilities and other liabilities, respectively.

Note 10. Income Taxes

The Company’s provision for income taxes was $1.0 million and $3.3 million for the three and nine months ended December 28, 2014, respectively, and $0.7 million and $3.7 million for the three and nine months ended December 29, 2013, respectively. Income tax expense for the three and nine months ended December 28, 2014 included a $3.7 million benefit related to the retroactive reinstatement of the federal research tax credit. Income tax expense for the three and nine months ended December 28, 2014 and December 29, 2013 was also impacted by the effect of a discrete tax related item associated with the difference between stock-based compensation expense and the deduction related to stock-based awards on income tax returns. The Company’s provision for income taxes is based on the estimated income for the year, the composition of the estimated income in different tax jurisdictions, and the tax effect, if any, in the applicable quarterly periods of newly enacted tax legislation, resolution of tax audits, changes in uncertain tax positions, and other discrete tax-related items. The allocation of taxable income to domestic and foreign tax jurisdictions impacts the effective tax rate, as the Company’s income tax rate in foreign jurisdictions is generally lower than its income tax rate in the United States.

The Company’s federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the Internal Revenue Service. Management does not believe that the results of this examination will have a material impact on the Company’s financial condition or results of operations.

Note 11. Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands, except per share amounts)
Net income	$	22,435	$	20,586	$	39,445	$	28,513
Shares:
Weighted-average shares outstanding — basic		87,728		86,855		87,679		87,810
Dilutive potential common shares, using treasury stock method		799		331		615		399
Weighted-average shares outstanding — diluted		88,527		87,186		88,294		88,209
Net income per share:
Basic	$	0.26	$	0.24	$	0.45	$	0.32
Diluted	$	0.25	$	0.24	$	0.45	$	0.32

Stock-based awards, including stock options and restricted stock units, representing 8.9 million and 10.7 million shares of common stock have been excluded from the diluted per share calculations for the three and nine months ended December 28, 2014, respectively, and 12.1 million and 14.8 million shares of common stock have been excluded from the diluted per share calculations for the three and nine months ended December 29, 2013, respectively. These stock-based awards have been excluded from the diluted per share calculations because their effect would have been antidilutive.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes. In this discussion and elsewhere in this report, we make forward-looking statements. These forward-looking statements are made in reliance upon safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, descriptions of our expectations regarding future trends affecting our business and other statements regarding future events or our objectives, goals, strategies, beliefs and underlying assumptions that are other than statements of historical fact. When used in this report, the words “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” “will” and similar expressions, or the negative of such expressions, are intended to identify these forward-looking statements. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of several factors, including, but not limited to those factors set forth and discussed in Part II, Item 1A “Risk Factors” and elsewhere in this report. In light of the significant uncertainties inherent in the forward-looking information included in this report, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. You are cautioned, therefore, not to place undue reliance on these forward-looking statements, which are made only as of the date of this report. We undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We design and supply high performance server and storage networking connectivity products that provide, enhance and manage computer data communication. These products facilitate the rapid transfer of data and enable efficient resource sharing between servers, networks and storage. Our products are used in enterprise data centers, cloud computing, Web 2.0 and other environments dependent on high performance, reliable data networking.

Our products are based primarily on Fibre Channel and Ethernet technologies and are used in connection with storage networks, local area networks, and converged networks. Storage networks are used to provide data across enterprise environments. Fibre Channel is currently the dominant technology for enterprise storage networking. Local area networks (LANs) are used to provide workstation-to-server, server-to-server, and server-to-storage connectivity using Ethernet. Converged networks are designed to address the evolving data center by consolidating and unifying various classes of connectivity and networks, such as storage area networks and LANs, using Ethernet speeds of 10Gb per second and greater. Fibre Channel over Ethernet (FCoE) is a converged networking technology that uses an Ethernet LAN for both storage and local area data transmission, thus combining the benefits of Fibre Channel technology with the pervasiveness of Ethernet-based networks. Similarly, Internet Small Computer System Interface (iSCSI) is an alternative to FCoE and provides storage over Ethernet capabilities. Our converged network products can operate individually as 10Gb Ethernet products, FCoE products, iSCSI products, or in combination as multi-protocol products.

We classify our products into two categories – Advanced Connectivity Platforms and Legacy Connectivity Products. Advanced Connectivity Platforms are comprised primarily of adapters and application-specific integrated circuits (ASICs) for server and storage connectivity applications. Legacy Connectivity Products are comprised primarily of Fibre Channel switch products.

Our products are sold worldwide, primarily to original equipment manufacturers (OEMs) and distributors. Our customers rely on our various server and storage connectivity products to deliver solutions to information technology professionals in virtually every business sector. Our products are found primarily in server and storage subsystem solutions that are used by enterprises with critical business data requirements. These products are incorporated in solutions from a number of server and storage system OEM customers, including Cisco Systems, Inc., Dell Inc., EMC Corporation, Fujitsu Ltd., Hewlett-Packard Company, Huawei Technologies Co. Ltd., Inspur Group Co., Ltd., International Business Machines Corporation, Lenovo Group Ltd., NetApp, Inc. and Oracle Corporation.

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Business Acquisition

In March 2014, we acquired certain 10/40/100Gb Ethernet controller-related assets from Broadcom Corporation (Broadcom) primarily relating to the NetXtreme^® II Ethernet controller family and licensed certain related intellectual property under non-exclusive licenses for total cash consideration of $147.8 million and the assumption of certain liabilities. This business acquisition expanded our product portfolio and is expected to accelerate our time to market for next generation products in the server Ethernet connectivity market.

Restructuring Plans

In March 2014, we commenced a restructuring plan primarily designed to consolidate our Ethernet product roadmap following the acquisition of the Ethernet controller-related assets from Broadcom. This restructuring plan primarily included a workforce reduction and the consolidation and elimination of certain engineering activities. During the nine months ended December 28, 2014, we recorded special charges of $3.6 million in connection with this plan, consisting of $2.6 million of exit costs and $1.0 million of asset impairment charges related to abandoned property and equipment. We completed these restructuring activities and all amounts were paid as of December 28, 2014.

In June 2013, we commenced a restructuring plan designed to enhance product focus and streamline business operations. This restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, we ceased development of future ASICs for switch products. During the nine months ended December 28, 2014, we recorded special charges of $0.7 million related to this restructuring plan, consisting of exit costs. We expect to incur approximately $1 million of additional severance costs in connection with this plan primarily related to employees required to provide future services. The additional severance costs will be recognized over the requisite service period.

Third Quarter Financial Highlights

A summary of our financial performance during the third quarter of fiscal 2015 is as follows:

• Net revenues of $140.2 million for the third quarter of fiscal 2015 increased 10% from $127.5 million in the second quarter of fiscal 2015. Revenue from Advanced Connectivity Platforms was $124.7 million for the third quarter of fiscal 2015 and increased 9% from $114.9 million in the second quarter of fiscal 2015. Revenue from Legacy Connectivity Products was $15.5 million in the third quarter of fiscal 2015 compared to $12.6 million in second quarter of fiscal 2015.

• Gross profit as a percentage of net revenues was 58.8% in the third quarter of fiscal 2015 compared to 59.1% in the second quarter of fiscal 2015.

• Operating income increased to $23.7 million, or 16.9% of net revenues, in the third quarter of fiscal 2015 from $13.5 million, or 10.6% of net revenues, in the second quarter of fiscal 2015. We recorded special charges of $0.1 million during the third quarter of fiscal 2015 and $2.3 million during the second quarter of fiscal 2015.

• Net income of $22.4 million, or $0.25 per diluted share, in the third quarter of fiscal 2015 increased from $11.0 million, or $0.12 per diluted share, in the second quarter of fiscal 2015.

• Cash, cash equivalents and marketable securities increased to $287.9 million as of December 28, 2014 from $276.8 million as of September 28, 2014.

13

Results of Operations

Net Revenues

A summary of our net revenues by product category is as follows:

	Three Months Ended						Nine Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013
	(Dollars in millions)
Net revenues:
Advanced Connectivity Platforms	$	124.7		$	98.4		$	344.3		$	285.7
Legacy Connectivity Products		15.5			21.0			42.9			59.5
	$	140.2		$	119.4		$	387.2		$	345.2
Percentage of net revenues:
Advanced Connectivity Platforms		89	%		82	%		89	%		83	%
Legacy Connectivity Products		11			18			11			17
		100	%		100	%		100	%		100	%

Historically, the global marketplace for server and storage connectivity solutions has expanded in response to the information requirements of enterprise data centers, cloud computing, Web 2.0 and other environments dependent on high performance, reliable data networking. The markets we serve have been characterized by rapid advances in technology and related product performance, which has generally resulted in declining average selling prices for existing products over time.

The market for our Fibre Channel products is mature and has declined during recent periods. This market decline may be the result of a shift in the information technology (IT) data center deployment model, as more enterprise data centers are using private or public clouds to provide a portion of their requirements. This shift has adversely impacted the enterprise server market. To the extent the Fibre Channel market continues to decline, our quarterly operating results would be negatively impacted. In addition, the United States and other countries around the world have experienced, and are continuing to experience, economic weakness and uncertainty. Political instability in certain regions of the world is significantly contributing to this economic uncertainty. Economic uncertainty is adversely affecting, and in the future may continue to adversely affect, IT spending rates, which may have a negative impact on our revenue and operating results. As a result of these factors, it is extremely difficult for us to forecast future sales levels and historical information may not be indicative of future trends.

Net revenues of $140.2 million for the three months ended December 28, 2014 increased 17% from $119.4 million for the three months ended December 29, 2013. The increase in net revenues was the result of a $26.3 million, or 27%, increase in revenue from Advanced Connectivity Platforms, partially offset by a $5.5 million decrease in revenue from Legacy Connectivity Products. The increase in revenue from Advanced Connectivity Platforms was primarily driven by an increase in revenue from Ethernet products associated with an acquisition in the fourth quarter of fiscal 2014. The decrease in revenue from Legacy Connectivity Products was primarily due to a decrease in the average selling prices of switches. We expect net revenue from our Legacy Connectivity Products to continue to decline over time. As part of the restructuring plan we implemented in June 2013, we ceased development of future ASICs for switch products; however, we will continue to sell and support products based on the current generation switch ASICs.

Net revenues of $387.2 million for the nine months ended December 28, 2014 increased 12% from $345.2 million for the nine months ended December 29, 2013. The increase in net revenues was the result of a $58.6 million, or 21%, increase in revenue from Advanced Connectivity Platforms, partially offset by a $16.6 million decrease in revenue from Legacy Connectivity Products. The increase in revenue from Advanced Connectivity Platforms was primarily due to an increase in revenue from Ethernet products associated with an acquisition in the fourth quarter of fiscal 2014. The decrease in revenue from Legacy Connectivity Products was primarily due to a decrease in the quantity of switches sold.

A small number of our customers account for a substantial portion of our net revenues, and we expect that a small number of customers will continue to represent a substantial portion of our net revenues for the foreseeable future. Our top ten customers accounted for 84% and 83% of net revenues during the nine months ended December 28, 2014 and December 29, 2013, respectively.

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We believe our major customers continually evaluate whether or not to purchase products from alternative or additional sources. Accordingly, there can be no assurance that a major customer will not reduce, delay or eliminate its purchases from us. Any such reduction, delay or loss of purchases could have a material adverse effect on our business, financial condition or results of operations.

Net revenues by geographic area are as follows:

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In millions)
United States	$	52.9	$	48.3	$	147.4	$	144.5
Asia-Pacific and Japan		59.3		44.1		165.1		123.9
Europe, Middle East and Africa		23.3		22.8		61.5		63.6
Rest of world		4.7		4.2		13.2		13.2
	$	140.2	$	119.4	$	387.2	$	345.2

Revenues by geographic area are presented based upon the ship-to location of the customer, which is not necessarily indicative of the location of the ultimate end-user of our products. The United States and China are the only countries that represented 10% or more of net revenues for the periods presented. Net revenues from customers in China were $23.6 million and $64.9 million for the three and nine months ended December 28, 2014, respectively, and $14.9 million and $42.3 million for the three and nine months ended December 29, 2013, respectively.

Gross Profit

Gross profit represents net revenues less cost of revenues. Cost of revenues consists primarily of the cost of purchased products, assembly and test services; costs associated with product procurement, inventory management, logistics and product quality; and the amortization of purchased intangible assets and other assets. A summary of our gross profit and related percentage of net revenues is as follows:

	Three Months Ended						Nine Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013
	(Dollars in millions)
Gross profit	$	82.4		$	81.0		$	228.5		$	233.8
Percentage of net revenues		58.8	%		67.8	%		59.0	%		67.7	%

Gross profit for the three months ended December 28, 2014 increased $1.4 million, or 2%, from gross profit for the three months ended December 29, 2013. Gross profit was positively impacted by the 17% increase in net revenues. The gross profit percentage for the three months ended December 28, 2014 decreased to 58.8% from 67.8% for the corresponding quarter in the prior year. The decrease in the gross profit percentage was primarily due to both an unfavorable product mix, as lower margin Ethernet products increased as a percentage of total revenue, and incremental amortization of acquisition-related purchased intangible assets of $3.6 million.

Gross profit for the nine months ended December 28, 2014 decreased $5.3 million, or 2%, from gross profit for the nine months ended December 29, 2013. The gross profit percentage for the nine months ended December 28, 2014 decreased to 59.0% from 67.7% for the corresponding period in the prior year. The decrease in gross profit and gross profit percentage was primarily due to both an unfavorable product mix, as lower margin Ethernet products increased as a percentage of total revenue, and incremental amortization of acquisition-related purchased intangible assets of $11.7 million.

Our ability to maintain our current gross profit percentage may be significantly affected by factors such as the mix of products shipped, manufacturing volumes over which fixed costs are absorbed, sales discounts and customer incentives, component costs, the transition to new products, competitive price pressures, the timeliness of volume shipments of new products, our ability to achieve manufacturing cost reductions, and amortization and impairments of purchased intangible assets and other assets. We anticipate that it will continue to be difficult to reduce manufacturing costs. In addition, our anticipated future growth in revenue is expected to be driven primarily by increased shipments of Ethernet products that have a lower gross profit percentage than our historical corporate average. As a result of these and other factors, our gross profit percentage may vary over time and could decline in future periods.

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Operating Expenses

Our operating expenses are summarized in the following table:

	Three Months Ended						Nine Months Ended
	December 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013
	(Dollars in millions)
Operating expenses:
Engineering and development	$	34.8		$	35.2		$	108.1		$	110.4
Sales and marketing		16.1			16.1			47.6			52.0
General and administrative		7.7			7.4			25.3			22.7
Special charges		0.1			2.0			4.9			18.3
	$	58.7		$	60.7		$	185.9		$	203.4
Percentage of net revenues:
Engineering and development		24.8	%		29.5	%		27.9	%		32.0	%
Sales and marketing		11.5			13.5			12.3			15.0
General and administrative		5.5			6.2			6.5			6.6
Special charges		0.1			1.6			1.3			5.3
		41.9	%		50.8	%		48.0	%		58.9	%

Engineering and Development. Engineering and development expenses consist primarily of compensation and related employee benefit costs, outside service and material costs, occupancy and equipment costs and related computer support costs. During the three months ended December 28, 2014, engineering and development expenses decreased to $34.8 million from $35.2 million for the three months ended December 29, 2013, primarily due to a decrease in cash compensation and related employee benefit costs that resulted principally from cost savings achieved through our restructuring plans.

During the nine months ended December 28, 2014, engineering and development expenses decreased to $108.1 million from $110.4 million for the nine months ended December 29, 2013. The decrease was primarily due to a $3.6 million decrease in cash compensation and related employee benefit costs and a $1.5 million decrease in stock-based compensation, both principally as a result of cost savings achieved through our restructuring plans, partially offset by a $1.3 million increase in equipment depreciation and maintenance costs and a $1.2 million increase in outside service and material costs related to new product development costs.

We believe continued investments in engineering and development activities are critical to achieving future design wins, expansion of our customer base and revenue growth opportunities.

Sales and Marketing. Sales and marketing expenses consist primarily of compensation and related employee benefit costs, sales commissions, promotional activities and travel for sales and marketing personnel. Sales and marketing expenses were consistent at $16.1 million for the three months ended December 28, 2014 and December 29, 2013.

During the nine months ended December 28, 2014, sales and marketing expenses decreased to $47.6 million from $52.0 million for the nine months ended December 29, 2013. The decrease was primarily due to a $2.3 million decrease in cash compensation and related employee benefit costs and a $1.0 million decrease in stock-based compensation, both principally due to a reduction in headcount resulting from our restructuring plans. The decrease in sales and marketing expenses also included a $1.5 million decrease in promotional expenses.

General and Administrative. General and administrative expenses consist primarily of compensation and related employee benefit costs for executive, finance, accounting, human resources, legal and information technology personnel. Non-compensation components of general and administrative expenses include accounting, legal and other professional fees, facilities expenses and other corporate expenses. General and administrative expenses increased to $7.7 million for the three months ended December 28, 2014 from $7.4 million for the three months ended December 29, 2013.

General and administrative expenses increased to $25.3 million for the nine months ended December 28, 2014 from $22.7 million for the nine months ended December 29, 2013. The increase was primarily due to an increase in consulting and outside services.

Special Charges. During the three and nine months ended December 28, 2014, we recorded special charges of $0.1 million and $4.9 million, respectively. The special charges for the three months ended December 28, 2014 consisted entirely of exit costs. The special charges for the nine months ended December 28, 2014 consisted of $3.4 million of exit costs, $1.0 million of asset impairment charges related to abandoned property and equipment and $0.5 million of other charges.

16

During the three and nine months ended December 29, 2013, we recorded special charges of $2.0 million and $18.3 million, respectively. The special charges for the three months ended December 29, 2013 consisted entirely of exit costs. The special charges for the nine months ended December 29, 2013 consisted of $15.9 million of exit costs and $2.4 million of asset impairment charges primarily related to abandoned property and equipment.

The exit costs for all periods include severance and related costs associated with involuntarily terminated employees. Certain employees that were notified of their termination are required to provide services for varying periods in excess of statutory notice periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. Exit costs for the nine months ended December 29, 2013 also included the estimated costs associated with the portion of a facility under a non-cancelable lease that we ceased using. We expect to incur approximately $1 million of additional exit costs associated with the restructuring plan initiated in June 2013, principally related to severance costs for terminated employees that are required to provide services beyond the statutory notice period.

The unpaid exit costs of $6.3 million as of December 28, 2014 are expected to be paid over the terms of the related agreements through fiscal 2018, including $1.5 million during the next twelve months.

Income Taxes

Our income tax expense was $3.3 million and $3.7 million for the nine months ended December 28, 2014 and December 29, 2013, respectively.

Our effective tax rate was 8% and 11% for the nine months ended December 28, 2014 and December 29, 2013, respectively. The decrease in our effective tax rate was primarily due to the benefits associated with the retroactive reinstatement of the federal research tax credit and adjustments to previously recognized uncertain tax position liabilities recorded during the nine months ended December 28, 2014. These benefits were partially offset by an increase in earnings in tax jurisdictions with higher tax rates.

Our federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the Internal Revenue Service. We do not believe that the results of this examination will have a material impact on our financial condition or results of operations.

Considering the global scope of our operations and the complexity of global tax and transfer pricing rules and regulations, it is difficult to estimate earnings within each tax jurisdiction. If actual earnings within each tax jurisdiction differ materially from our estimates, we may not achieve our expected effective tax rate. Additionally, our effective tax rate may be impacted by other items, including the tax effects of acquisitions and dispositions, changes to tax laws or regulations, examinations by tax authorities, stock-based compensation, uncertain tax positions and changes in our ability to realize deferred tax assets.

Liquidity and Capital Resources

Our combined balances of cash, cash equivalents and marketable securities increased to $287.9 million as of December 28, 2014 from $278.0 million as of March 30, 2014. As of December 28, 2014 and March 30, 2014, our international subsidiaries held $226.2 million and $232.8 million, respectively, of our total cash, cash equivalents and marketable securities. These holdings by our international subsidiaries consisted primarily of debt securities due from U.S. issuers, including the U.S. government and related agencies, and U.S. dollar denominated cash and money market funds. Certain foreign regulations could impact our ability to transfer funds to the United States. We currently intend to invest the funds held outside of the United States in our international operations and, as a result, do not intend to repatriate these funds. Should we decide to repatriate funds held outside of the United States, we may incur a significant tax obligation.

We believe that existing cash, cash equivalents, marketable securities and expected cash flow from operations will provide sufficient funds to finance our operations for at least the next twelve months. However, it is possible that we may need to supplement our existing sources of liquidity to finance our activities beyond the next twelve months or for the future acquisition of businesses, products or technologies and there can be no assurance that sources of liquidity will be available to us at that time.

17

Revolving Credit Facility

We have a credit agreement that provides us with a $125 million unsecured revolving credit facility that matures in March 2018. Borrowings under the credit agreement may be used for general corporate purposes, including permitted share repurchases and acquisitions. Under the credit agreement, we may increase the revolving commitments or obtain incremental term loans in an aggregate amount up to an additional $100 million, subject to certain conditions. There were no borrowings outstanding under the credit agreement as of December 28, 2014.

Operating, Investing and Financing Activities

Cash provided by operating activities was $37.3 million for the nine months ended December 28, 2014 compared to cash provided by operating activities of $78.0 million for the nine months ended December 29, 2013. Operating cash flow for the nine months ended December 28, 2014 consisted of our net income of $39.4 million and net non-cash expenses of $53.1 million, offset by net cash used as a result of changes in operating assets and liabilities of $55.2 million. The changes in operating assets and liabilities included a $29.9 million increase in accounts receivable, a $12.9 million increase in inventories and an $11.4 million decrease in other liabilities. The increase in accounts receivable was primarily due to an increase in net revenues and the timing of cash collections. The increase in inventories was primarily due to product purchases in support of future customer demand and advanced purchases of ASICs with long lead times. The decrease in other liabilities was primarily due to the payment of severance and related costs associated with our restructuring plans.

We expect our business will continue to require additional investments in certain components of working capital. Our current product fulfillment model and increased customer demand for our products is expected to require additional investments in inventory.

Operating cash flow for the nine months ended December 29, 2013 consisted of our net income of $28.5 million, net non-cash expenses of $42.0 million and net cash provided as a result of changes in operating assets and liabilities of $7.5 million. The changes in operating assets and liabilities included a $7.7 million increase in accrued taxes, net, and a $6.1 million decrease in inventories, partially offset by a $5.1 million increase in accounts receivable. The increase in accrued taxes, net, is primarily due to liabilities recorded for unrecognized tax benefits related to certain positions taken on various state income tax returns and the timing of payment obligations. The decrease in inventories was primarily due to sales of products that included ASICs that were purchased in the prior year. The increase in accounts receivable was primarily due to the timing of cash collections and an increase in net revenues.

Cash used in investing activities was $22.6 million for the nine months ended December 28, 2014 and consisted of $15.4 million of purchases of property and equipment and $7.2 million of net purchases of available-for-sale securities. During the nine months ended December 29, 2013, cash used in investing activities was $18.8 million and consisted of $21.0 million of purchases of property and equipment, partially offset by net sales and maturities of available-for-sale securities of $2.2 million.

We expect capital expenditures to remain significant in the future as we continue to invest in more costly engineering and production tools for new technologies, machinery and equipment, and enhancements to our corporate information technology infrastructure.

Cash used in financing activities was $10.5 million for the nine months ended December 28, 2014 and consisted primarily of our purchase of $11.8 million of common stock under our stock repurchase program and $3.6 million for minimum tax withholdings paid on behalf of employees for restricted stock units that vested during the period, partially offset by $5.1 million of proceeds from the issuance of common stock under stock-based awards. During the nine months ended December 29, 2013, cash used in financing activities was $45.8 million and consisted primarily of our purchase of $47.8 million of common stock under our prior stock repurchase program and $4.6 million for minimum tax withholdings paid on behalf of employees for restricted stock units that vested during the period, partially offset by $6.8 million of proceeds from the issuance of common stock under stock-based awards.

Since fiscal 2003, we have had various stock repurchase programs that authorized the purchase of our outstanding common stock. In October 2014, our Board of Directors approved a program authorizing the repurchase of up to $100 million of our outstanding common stock over a period of up to 18 months. As of December 28, 2014, we had repurchased a total of 127.6 million shares of common stock under our stock repurchase programs for an aggregate purchase price of $1.95 billion. Pursuant to the existing stock repurchase program, we are authorized to repurchase additional shares with an aggregate cost of up to $88.2 million as of December 28, 2014.

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Contractual Obligations and Commitments

We have certain contractual obligations and commitments to make future payments in the form of non-cancelable purchase orders to our suppliers and commitments under operating lease arrangements. A summary of our contractual obligations as of December 28, 2014, and their impact on our cash flows in future fiscal years, is as follows:

	2015 (Remaining three months)		2016		2017		2018		2019		Total
	(In millions)
Operating leases	$	2.0	$	7.4	$	4.2	$	1.9	$	0.2	$	15.7
Non-cancelable purchase obligations		31.4		16.9		—		—		—		48.3
Total	$	33.4	$	24.3	$	4.2	$	1.9	$	0.2	$	64.0

Our liability for unrecognized tax benefits, including related accrued interest and penalties, was $15.2 million as of December 28, 2014. We are not able to provide a reasonable estimate of the timing of future tax payments related to these obligations.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires us to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses during the reporting period. We base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances, including the current economic environment, in making judgments about the carrying values of assets and liabilities.

For a description of the accounting policies that we believe to be our most critical accounting policies and estimates, see Critical Accounting Policies and Estimates included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended March 30, 2014. There have been no material changes in any of our critical accounting policies and estimates during the nine months ended December 28, 2014. These accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements and actual results could differ materially from the amounts reported based on these policies.

Recently Issued Accounting Standards Not Yet Effective

In May 2014, the Financial Accounting Standards Board issued an accounting standard update which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance when it becomes effective. The new standard is effective for us in the first quarter of fiscal 2018. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the effect this new guidance will have on our consolidated financial statements and related disclosures, and have not yet selected a transition method.

Off-Balance Sheet Arrangements

During the periods presented, we did not have any off-balance sheet arrangements other than operating leases.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. As of December 28, 2014, the carrying value of our cash and cash equivalents approximates fair value.

We maintain a portfolio of marketable securities consisting primarily of U.S. government and agency securities, corporate debt obligations and mortgage-backed securities, the majority of which have remaining terms of three years or less. We are exposed to fluctuations in interest rates as movements in interest rates can result in changes in the market value of our investments in debt securities. However, due to the short-term expected duration of our portfolio of marketable securities, we do not believe that we are subject to material interest rate risk.

In accordance with our investment guidelines, we only invest in instruments with high credit quality ratings and we limit our exposure to any one issuer or type of investment. Our portfolio of marketable securities as of December 28, 2014 consists of $192.4 million of securities that are classified as available-for-sale. As of December 28, 2014, we had gross unrealized losses associated with our available-for-sale securities of $0.5 million that were determined by management to be temporary in nature.

We do not use derivative financial instruments.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended, (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 28, 2014. There was no change in our internal control over financial reporting during our quarter ended December 28, 2014 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.

OTHER INFORMATION

Item 1. Legal Proceedings

Various lawsuits, claims and proceedings have been or may be instituted against us. The outcome of litigation cannot be predicted with certainty and some lawsuits, claims and proceedings may be disposed of unfavorably to us. Many intellectual property disputes have a risk of injunctive relief and there can be no assurance that a license will be granted. Injunctive relief could have a material adverse effect on our financial condition or results of operations. Based on an evaluation of matters that are pending or asserted, we believe the disposition of such matters will not have a material adverse effect on our financial condition or results of operations.

Item 1A. Risk Factors

We have updated the risk factors discussed in Item 1A of our Annual Report on Form 10-K for the year ended March 30, 2014, as set forth below. We do not believe any of the updates constitute material changes from the risk factors previously discussed in our Annual Report on Form 10-K for the year ended March 30, 2014.

Our operating results may fluctuate in future periods, which could cause our stock price to decline.

We have experienced, are currently experiencing, and expect to experience in future periods, fluctuations in sales and operating results from quarter to quarter. For example, the market for our Fibre Channel products is mature and has declined during recent periods. This market decline may be the result of a shift in the information technology (IT) data center deployment model, as more enterprise data centers are using private or public clouds to provide a portion of their requirements. This shift has adversely impacted the enterprise server market. To the extent the Fibre Channel market continues to decline, our quarterly operating results would be negatively impacted.

A significant portion of our net revenues in each fiscal quarter results from orders booked in that quarter. Orders placed by major customers are typically based on their forecasted sales and inventory levels for our products. Accordingly, it is extremely difficult for us to forecast future sales levels and historical information may not be indicative of future trends. In addition, there can be no assurance that we will maintain our current gross margins or profitability in the future.

Fluctuations in our quarterly operating results may also be the result of:

• the timing, size and mix of orders from customers;

• gain or loss of significant customers;

• industry consolidation among our competitors, our customers or our suppliers;

• customer policies pertaining to desired inventory levels of our products;

• sales discounts and customer incentives;

• the availability and sale of new products;

• changes in our average selling prices;

• the timing of server refresh cycles;

• variations in manufacturing capacities, efficiencies and costs;

• the availability and cost of components, including silicon chips;

• variations in product development costs, especially related to advanced technologies;

• variations in operating expenses;

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• changes in effective income tax rates, including those resulting from changes in tax laws;

• our ability to timely produce products that comply with new environmental restrictions or related requirements of our original equipment manufacturer (OEM) customers;

• actual events, circumstances, outcomes and amounts differing from judgments, assumptions and estimates used in determining the value of certain assets (including the amounts of related valuation allowances), liabilities and other items reflected in our consolidated financial statements;

• the timing of revenue recognition and revenue deferrals;

• gains or losses related to our marketable securities; or

• changes in accounting rules or our accounting policies.

In addition, our quarterly results of operations are influenced by competitive factors, including the pricing and availability of our products and our competitors’ products. Furthermore, communications regarding new products and technologies could cause our customers to defer or cancel purchases of our products. Order deferrals by our customers, delays in our introduction of new products, and longer than anticipated design-in cycles for our products have in the past adversely affected our quarterly results of operations. Due to these factors, as well as other unanticipated factors, it is likely that in some future quarter or quarters our operating results will be below the expectations of public market analysts or investors, and as a result, the price of our common stock could significantly decrease.

We expect gross margin to vary over time primarily due to product mix.

Our gross margin is expected to vary over time primarily due to product mix, including the impact of our acquisition of Ethernet controller-related assets in the fourth quarter of fiscal 2014. We expect that our Ethernet products will represent a higher percentage of our future revenues and these products have a lower gross margin percentage than our historical corporate average. In addition, our gross margins may be adversely affected by numerous other factors, including:

• other changes in product mix;

• transitions to products based on emerging technologies, which may have lower gross margins;

• changes in manufacturing volumes over which fixed costs are absorbed;

• increased price competition;

• introduction of new products by us or our competitors, including products with advantages in price, performance or features;

• our inability to reduce manufacturing-related or component costs;

• entry into new markets;

• amortization and impairments of purchased intangible assets;

• sales discounts and customer incentives;

• increases in material, labor or overhead costs;

• excess inventory and inventory holding charges;

• changes in distribution channels;

• increased warranty costs; and

• acquisitions and dispositions of businesses, technologies or product lines.

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A decrease in our gross margin could adversely affect the market price of our common stock.

Our operating results have been, are being, and may in the future be, adversely affected by unfavorable economic conditions.

Certain countries around the world have experienced, and are continuing to experience, economic weakness and uncertainty. Political instability in certain regions of the world is significantly contributing to this economic uncertainty. Economic uncertainty is adversely affecting, and in the future may continue to adversely affect, IT spending rates. For example, certain of our large OEM customers are reporting significant weakness in particular markets and geographies. Reductions in IT spending rates have resulted in reduced sales volumes, and could result in lower prices for our products, longer sales cycles, increased inventory provisions and increased production costs, all of which could negatively impact our results of operations.

As a result of worldwide economic weakness and uncertainty, it is extremely difficult for us and our customers to forecast future revenue levels based on historical information and trends. To the extent that we do not achieve our anticipated level of revenue, our operating results could be adversely affected.

Our stock price may be volatile.

The market price of our common stock has fluctuated substantially and there can be no assurance that such volatility will not continue. Several factors could impact our stock price, including:

• differences between our actual revenues and operating results and the published expectations of public market analysts;

• quarterly fluctuations in our revenues and operating results;

• introduction of new products or changes in product pricing policies by our competitors or us;

• conditions in the markets in which we operate;

• changes in market projections by industry forecasters;

• changes in estimates of our earnings or rating upgrades or downgrades of our stock by public market analysts;

• operating results or forecasts of our major customers or competitors;

• rumors or dissemination of false information; and

• general economic and geopolitical conditions.

In addition, stock markets have experienced extreme price and volume volatility in recent years and stock prices of technology companies have been especially volatile. This volatility has had a substantial effect on the market prices of securities of many public companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations could adversely affect the market price of our common stock, which could have a material adverse impact on investor confidence and employee retention.

Our business is dependent, in large part, on the continued growth of the networking markets that we serve and if these markets do not continue to develop, our business will suffer.

Our products are used in storage, local area and converged networks, and therefore our business is dependent on these markets. Our success in generating revenue in these markets will depend on, among other things, our ability to:

• educate potential OEM customers, distributors, resellers, system integrators, storage system providers and end-user organizations about the benefits of our products;

• maintain and enhance our relationships with OEM customers, distributors, resellers, system integrators and storage system providers;

• predict and base our products on standards that ultimately become industry standards; and

• achieve and maintain interoperability between our products and other equipment and components from diverse vendors.

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If we are not successful in any or all of these items, our business and results of operations could be materially and adversely affected.

Our financial condition will be materially harmed if we do not maintain and gain market acceptance of our products.

The markets in which we compete involve rapidly changing technologies, evolving industry standards and continuing improvements in products and services. Examples of these changing technologies include system-on-chip products and both software-defined-networking and software-defined-storage products. Our future success depends, in part, on our ability to:

• enhance our current products and develop and introduce, in a timely manner, new products that keep pace with technological developments and industry standards;

• compete effectively on the basis of price and performance; and

• adequately address OEM and end-user customer requirements and achieve market acceptance.

We believe that to remain competitive, we will need to continue to develop new products and enter new markets, which will require significant investment. Some new markets may require engagement with customers with whom we have limited or no prior experience. Our competitors may be developing alternative technologies, or entering into exclusive strategic alliances with our major customers, either of which may adversely affect the market acceptance of our products, our ability to enter new markets, or our ability to secure customer design wins. Although we continue to explore and develop products based on new technologies, a substantial portion of our revenues is generated today from Fibre Channel technology. If alternative technologies are adopted by the industry, we may not be able to develop products for these technologies in a timely manner. Further, even if alternative technologies do augment Fibre Channel revenues, our products may not be fully developed in time to be accepted by our customers. Even if our new products are developed in time, we may not be able to manufacture them at competitive prices or in sufficient volumes.

Some of our products are based on Fibre Channel over Ethernet (FCoE) or 10Gb Ethernet technologies. FCoE is a converged networking technology that provides a unified storage and data network over Enhanced Ethernet, while preserving the investment by end users in their existing Fibre Channel infrastructure and storage. As with many emerging technologies, it is expected that the market for FCoE will take a number of years to fully develop and mature. We expect products based on FCoE to supplement, and perhaps replace, certain products based on Fibre Channel technology. 10Gb Ethernet is a technology for use in enterprise data centers. The market for 10Gb Ethernet products includes well-established participants who have significantly more engineering, sales and marketing resources to dedicate to developing and penetrating the market than we do. An inability to maintain, or build on, our market share in the Fibre Channel, converged or 10Gb Ethernet markets, or the failure of these markets to expand, could have a material adverse effect on our business or results of operations.

We depend on a small number of customers and any decrease in revenues from any one of our major customers could adversely affect our results of operations and cause our stock price to decline.

A small number of customers account for a substantial portion of our net revenues, and we expect that a small number of customers will continue to represent a substantial portion of our net revenues in the foreseeable future. Our top ten customers accounted for 84% and 83% of net revenues for the nine months ended December 28, 2014 and December 29, 2013, respectively. Total revenue from our three largest customers, Hewlett-Packard Company, International Business Machines Corporation (IBM) and Dell, Inc., collectively accounted for more than 50% of net revenues during each of the nine months ended December 28, 2014 and December 29, 2013. On October 1, 2014, IBM and Lenovo Group Ltd. (Lenovo) completed the initial closing for Lenovo’s acquisition of IBM’s x86 server business. While we expect our sales related to IBM’s x86 server business to continue with Lenovo after completion of this transaction, to the extent unexpected delays or transition issues occur in connection with the sale of this business, we could experience an adverse effect on our business or results of operations.

A significant portion of the products we sell are incorporated into servers manufactured by our major customers. Certain of our large OEM customers are reporting weakness in this market. If server sales by our major customers continue to be adversely affected by the IT spending environment or server market factors, demand for our products could decrease further, which could have a material adverse effect on our business, financial condition or results of operations.

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Our customers generally order products through written purchase orders instead of long-term supply contracts and, therefore, are generally not obligated to purchase products from us for any extended period. Customers typically incorporate our products into complex devices and systems, which creates supply chain cross-dependencies. Accordingly, supply chain disruptions affecting components of our customers’ devices and/or systems could negatively impact the demand for our products, even if the supply of our products is not directly affected. Major customers also have significant leverage over us and may attempt to change the sales terms, including pricing, customer incentives and payment terms, or insist that we undertake or fund significant aspects of the design, qualification and testing that our customers have typically been responsible for, either of which could have a material adverse effect on our business, financial condition or results of operations. As our OEM customers are pressured to reduce prices as a result of competitive factors, we may be required to contractually commit to price reductions for our products before we know how, or if, cost reductions can be achieved. If we are unable to achieve these cost reductions, our gross margins could decline and such a decline could have a material adverse effect on our business, financial condition or results of operations.

The ongoing consolidation in the technology industry could adversely impact our business. There is the potential for some of our customers to merge with or acquire one or more of our other customers. There is also a possibility that one of our large customers could acquire one of our current competitors. As a result of such transactions, demand for our products could decrease, which could have a material adverse effect on our business, financial condition or results of operations.

Competition within the markets for products such as ours is intense and includes various established competitors.

The markets for networking connectivity products are highly competitive and are characterized by short product life cycles, price erosion, rapidly changing technology, frequent product performance improvements and evolving industry standards. Due to the diversity of products required in storage, local area and converged networking, we compete with many companies. In the traditional enterprise storage Fibre Channel adapter and application-specific integrated circuit (ASIC) markets, our primary competitor is Emulex Corporation. In the 10Gb Ethernet adapter and ASIC markets, which include converged networking products such as FCoE and Internet Small Computer Systems Interface (iSCSI) we compete primarily with Emulex Corporation, Mellanox Technologies, Ltd., Chelsio Communications, Inc. and Intel Corporation. We may also compete with some of our server and storage systems customers, some of which have the capability to develop products comparable to those we offer.

We need to continue to develop products appropriate to our markets to remain competitive as our competitors continue to introduce products with improved features. While we continue to devote significant resources to engineering and development, these efforts may not be successful or competitive products may not be developed and introduced in a timely manner. In addition, while relatively few competitors offer a full range of storage, local area and converged networking connectivity products, additional domestic and foreign manufacturers may increase their presence in these markets either through the development of new products or through industry consolidation. We may not be able to compete successfully against these or other competitors. If we are unable to design, develop or introduce competitive new products on a timely basis, or if our competitors introduce new products that are more successful than ours in the marketplace, our future operating results may be materially and adversely affected.

We may engage in mergers, acquisitions, divestitures and strategic investments and these activities could adversely affect our results of operations and stock price.

Our future growth may depend in part on our ability to identify and acquire businesses, technologies or product lines. For example, we completed two acquisitions in fiscal 2014, including the acquisition of 10/40/100Gb Ethernet controller-related assets from Broadcom Corporation. Mergers and acquisitions involve numerous risks, including:

• the failure of markets for the products of acquired businesses, technologies or product lines to develop as expected;

• uncertainties in identifying and pursuing acquisition targets;

• the challenges in achieving strategic objectives, cost savings and other benefits expected from acquisitions;

• the risk that the financial returns on acquisitions will not support the expenditures incurred to acquire such businesses or the capital expenditures needed to develop such businesses;

• difficulties in assimilating the acquired businesses, technologies or product lines;

• the failure to successfully manage additional business locations, including the additional infrastructure and resources necessary to support and integrate such locations;

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• the existence of unknown product defects related to acquired businesses, technologies or product lines that may not be identified due to the inherent limitations involved in the due diligence process of an acquisition;

• the diversion of management’s attention from other business concerns;

• risks associated with entering markets or conducting operations with which we have no or limited direct prior experience;

• risks associated with assuming the legal obligations of acquired businesses, technologies or product lines;

• risks related to the effect that internal control processes of acquired businesses might have on our financial reporting and management’s report on our internal control over financial reporting;

• the potential loss of, or impairment of our relationships with, current customers or failure to retain the customers of acquired businesses;

• the inability to qualify the acquired products with OEM partners on a timely basis, or at all;

• the potential loss of key employees related to acquired businesses, technologies or product lines; and

• the incurrence of significant exit charges if products or technologies acquired in business combinations are unsuccessful.

Further, we may never realize the perceived benefits of a business combination or divestiture. Acquisitions by us could negatively impact gross margins or dilute stockholders’ investment and cause us to incur debt, contingent liabilities and amortization/impairment charges related to intangible assets, all of which could materially and adversely affect our financial condition or results of operations. Divestitures involve risks, such as difficulty splitting up businesses, distracting employees, potential loss of revenue and negatively impacting margins, and potentially disrupting customer relationships. In addition, our effective tax rate for future periods could be negatively impacted by acquisitions or divestitures.

We have made, and could make in the future, investments in technology companies, including privately-held companies in a development stage. Many of these private equity investments are inherently risky because the companies’ businesses may never develop, and we may incur losses related to these investments. In addition, we may be required to write down the carrying value of these investments to reflect other-than-temporary declines in their value, which could have a material adverse effect on our financial condition and results of operations.

If we are unable to attract and retain key personnel, we may not be able to sustain or grow our business.

Our future success largely depends on our key engineering, sales, marketing and executive personnel, including highly skilled semiconductor design personnel and software developers. Prasad Rampalli joined the Company as President and Chief Executive Officer in February 2014 and during our leadership transition it is especially important that we retain key personnel. If we lose the services of key personnel, or do not hire or retain other personnel for key positions, our business could be adversely affected.

We believe that the market for key personnel in the industries in which we compete is highly competitive. In particular, we have periodically experienced difficulty in attracting and retaining qualified engineers and other technical personnel and anticipate that competition for such personnel will increase in the future. For example, the market for qualified technical personnel within India has become extremely competitive, resulting in significant wage inflation. As a result, we may not be able to attract and retain key personnel with the skills and expertise necessary to develop new products in the future or to manage our business, both in the United States and abroad.

We have historically used equity awards and our employee stock purchase program as key components of our total employee compensation program in order to align employees’ interests with the interests of our stockholders, encourage retention of key personnel, and provide competitive compensation packages. However, the guidelines of proxy advisory firms relating to stockholder approval of shares available under equity compensation plans and share usage could make it more difficult for us to obtain such approval and therefore grant stock-based awards to employees in the future, which may result in changes in our stock-based compensation strategy. These and other developments relating to the provision of stock-based compensation to employees could make it more difficult to attract, retain and motivate key personnel.

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Our products are complex and may contain undetected software or hardware errors that could lead to an increase in our costs, reduce our net revenues or damage our reputation.

Our products are complex and may contain undetected software or hardware errors when first introduced or as newer versions are released. We are also exposed to risks associated with latent defects in existing products and to risks that components purchased from third-party subcontractors and incorporated into our products may not meet our specifications or may otherwise fail prematurely. From time to time, we have found errors in existing, new or enhanced products. In addition, our products are frequently combined with other products, including software, from other vendors, and these products often need to interface with existing networks, each of which have different specifications and utilize multiple protocol standards. As a result, when problems occur, it may be difficult to identify the source of the problems. The occurrence of hardware or software errors could adversely affect the sales of our products, cause us to incur significant warranty and repair costs, divert the attention of our engineering personnel from our product development efforts and cause significant customer relations problems, any of which could materially and adversely affect our operating results.

We expect the pricing of our products to continue to decline, which could reduce our revenues, gross margins and profitability.

We expect the average unit prices of our products (on a like-for-like product comparison basis) to decline in the future as a result of competitive pricing pressures, increased sales discounts and customer incentives, new product introductions by us or our competitors, or other factors. If we are unable to offset these factors by increasing sales volumes or reducing product manufacturing costs, our total revenues and gross margins may decline. Moreover, most of our expenses are fixed in the short-term or incurred in advance of receipt of corresponding revenues. As a result, we may not be able to decrease our spending to offset any unexpected shortfall in revenues. If this occurs, our revenues, gross margins and profitability could decline.

We are dependent on sole source and limited source suppliers for certain key components.

Certain key components used in the manufacture of our products are purchased from single or limited sources. ASICs are purchased from single sources. For example, in connection with our acquisition of 10/40/100Gb Ethernet controller-related assets, we entered into a development and supply agreement which requires us to purchase the ASICs used in the related products exclusively from Broadcom. Other key components such as microprocessors, logic chips, power supplies and programmable logic devices are purchased from limited sources. If one of these suppliers experiences an interruption in its ability to supply our needs, or chooses to sever or significantly change its relationship with us, we may be unable to produce certain of our products, which could result in the loss of customers and have a material adverse effect on our results of operations.

We are dependent on worldwide third-party subcontractors and contract manufacturers.

Third-party subcontractors located outside the United States assemble and test certain products for us. To the extent that we rely on third-party subcontractors to perform these functions, we will not be able to directly control product delivery schedules and quality assurance. This lack of control may result in product shortages or quality assurance problems that could delay shipments of products or increase manufacturing, assembly, testing or other costs. If a subcontractor experiences capacity constraints or financial difficulties, suffers damage to its facilities, experiences power outages, natural disasters, labor shortages or labor strikes, or any other disruption of assembly or testing capacity, we may not be able to obtain alternative assembly and testing services in a timely manner or on commercially acceptable terms.

In addition, the loss of any of our major third-party contract manufacturers could significantly impact our ability to produce products for an indefinite period of time. Qualifying a new contract manufacturer and commencing volume production is a lengthy and expensive process. Some customers will not purchase any products, other than a limited number of evaluation units, until they qualify the manufacturing line for the product. If we are required to change a contract manufacturer or if a contract manufacturer experiences delays, disruptions, capacity constraints, component part shortages or quality control problems in its manufacturing operations, shipment of our products to our customers could be delayed, resulting in loss or postponement of revenues and potential harm to our competitive position and relationships with customers.

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The migration of our customers toward new products could adversely affect our results of operations.

As new or enhanced products are introduced, we must successfully manage the transition from older products in order to minimize the effects of product inventories that may become excess and obsolete, as well as ensure that sufficient supplies of new products can be delivered to meet customer demand. Our failure to manage the transition to newer products in the future or to develop and successfully introduce new products and product enhancements could adversely affect our business or results of operations. In addition, our customers are demanding a higher level of customization for new products, which prevents us from fully leveraging our product design work and adds to our new product development costs. When we introduce new products and product enhancements, we face additional risks relating to product transitions, including risks relating to forecasting demand and longer lead times associated with smaller product geometries and more complex production operations. Any such adverse event or increased costs could have a material adverse effect on our business, financial condition or results of operations.

Historically, the technology industry has developed higher performance ASICs, which create chip-level solutions that replace selected board-level or box-level solutions at a significantly lower average selling price. We have previously offered ASICs to customers for certain applications that have effectively resulted in a lower-priced solution when compared to an adapter solution. This transition to ASICs may also occur with respect to other current and future products. The result of this transition may have an adverse effect on our business, financial condition or results of operations. In the future, a similar adverse effect to our business could occur if there were rapid shifts in customer purchases from our midrange networking connectivity products to lower-cost products.

Our business is subject to seasonal fluctuations and uneven sales patterns.

A large percentage of our products are sold to customers who experience seasonality and uneven sales patterns in their businesses. As a result, we experience similar seasonality and uneven sales patterns. We believe this uneven sales pattern is a result of many factors, including:

• the tendency of our customers to close a disproportionate percentage of their sales transactions in the last month, weeks and days of each quarter;

• spikes in sales during the fourth quarter of each calendar year that some of our customers experience; and

• differences between our quarterly fiscal periods and the fiscal periods of our customers.

In addition, because our customers require us to maintain products at hub locations near their facilities or near the facilities of their contract manufacturers, it is difficult for us to predict sales trends. Our uneven sales pattern also makes it extremely difficult to predict the demand of our customers and adjust manufacturing capacity accordingly. If we predict demand that is substantially greater than actual customer orders, we will have excess inventory. Alternatively, if customer orders substantially exceed predicted demand, the ability to assemble, test and ship orders received in the last weeks and days of each quarter may be limited, or at an increased cost, which could have a material adverse effect on our quarterly revenues and earnings.

Unanticipated changes in our tax provisions or adverse outcomes resulting from examination of our income tax returns could adversely affect our results of operations.

We are subject to income taxes in the United States and various foreign jurisdictions. Our effective tax rate has been and could in the future be adversely affected by changes in tax laws or interpretations of those tax laws, by changes in the mix of earnings in countries with differing statutory tax rates, or by changes in the valuation of our deferred tax assets and liabilities. Our effective tax rate is also affected by intercompany transactions for licenses, services, funding and other items. Given the global scope of our operations, and the complexity of global tax and transfer pricing rules and regulations, it is difficult to estimate earnings within each tax jurisdiction. If actual earnings within a tax jurisdiction differ materially from our estimates, we may not achieve our expected effective tax rate.

Additionally, our effective tax rate may be impacted by the tax effects of acquisitions, dispositions, changes to tax laws or regulations, examinations by tax authorities, stock-based compensation, uncertain tax positions, and changes in our ability to realize deferred tax assets. Significant judgment and estimates are required in determining the impact on our effective tax rate related to these items, including whether it is more likely than not that some or all of our deferred tax assets will be realized. Such estimates are subject to uncertainty due to various factors, including the economic environment, industry and market conditions, and the length of time of the projections included in the analyses. If our actual results are less favorable than current estimates, or we revise our estimates downward in future analyses, a valuation allowance may be required related to our deferred tax assets with a corresponding

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adjustment to earnings in the period in which such determination is made, which could have a material effect on our results of operations. In addition, the Organisation for Economic Co-operation and Development (OECD), an international association of 34 countries including the United States, is contemplating changes to numerous long-standing tax principles. These contemplated changes, if finalized and adopted by countries, will increase tax uncertainty and may adversely affect our provision for income taxes.

Finally, we are subject to examination of our income tax returns by the United States Internal Revenue Service (IRS) and other tax authorities, which may result in the assessment of additional income taxes. For example, our federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the IRS. We regularly assess the likelihood of adverse outcomes resulting from examinations to determine the adequacy of our provisions for income taxes. However, unanticipated outcomes from examinations could have a material adverse effect on our financial condition or results of operations.

Because we have operations in foreign countries and depend on foreign customers and suppliers, we are subject to international economic, currency, regulatory, political and other risks that could harm our business, financial condition and results of operations.

International revenues accounted for 62% and 58% of our net revenues for the nine months ended December 28, 2014 and December 29, 2013, respectively. We expect that international revenues will continue to account for a significant percentage of our net revenues for the foreseeable future. In addition, we maintain operations in foreign countries and a significant portion of our inventory purchases are from suppliers that are located outside the United States. As a result, we are subject to several risks, which include:

• a greater difficulty of administering and managing our business globally;

• compliance with multiple, and potentially conflicting, regulatory requirements, such as import or export requirements, tariffs and other barriers;

• less effective intellectual property protections outside of the United States;

• currency fluctuations;

• overlapping or differing tax structures;

• political and economic instability, including terrorism and war; and

• general trade restrictions.

As of December 28, 2014, our international subsidiaries held $226.2 million of our total cash, cash equivalents and marketable securities. These holdings by our international subsidiaries consist primarily of debt securities due from U.S. issuers, including the U.S. government and related agencies, and U.S. dollar denominated cash and money market funds. Certain foreign regulations could impact our ability to transfer funds to the United States. Additionally, should we decide to repatriate cash held outside of the United States, we may incur a significant tax obligation.

Our international sales are invoiced in U.S. dollars and, accordingly, if the relative value of the U.S. dollar in comparison to the currency of our foreign customers should increase, the resulting effective price increase of our products to such foreign customers could result in decreased sales. In addition, a significant portion of our inventory is purchased from international suppliers, who invoice us in U.S. dollars. If the relative value of the U.S. dollar in comparison to the currency of our foreign suppliers should decrease, our suppliers may increase prices, which could result in a decline of our gross margin. Any of the foregoing factors could have a material adverse effect on our business, financial condition or results of operations.

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Our facilities and the facilities of our suppliers and customers are located in regions that are subject to natural disasters.

Our California facilities, including our principal executive offices, our principal design facilities and our critical business operations, are located near major earthquake faults. We are not specifically insured for earthquakes or other natural disasters. Any personal injury at, or damages to, the facilities as a result of such occurrences could have a material adverse effect on our business, results of operations or financial condition. Additionally, we have operations, suppliers and customers in regions that have historically experienced natural disasters. Any earthquake or other natural disaster, including a hurricane, flood, volcanic eruption, tsunami or fire, affecting any of these regions could adversely affect our business, results of operations and financial condition.

In addition, as a result of a natural disaster, our major customers may face shortages of components that could negatively impact their ability to build the servers and data center devices into which our products are integrated, thereby negatively impacting the demand for our products even if the supply of our products is not directly affected by the natural disaster. For example, the earthquake, tsunami and related events that occurred in Japan in March 2011, and the extensive flooding that occurred in Thailand beginning in October 2011, caused widespread destruction in regions that include suppliers of components for many technology companies.

Our proprietary rights may be inadequately protected and difficult to enforce.

In some jurisdictions, we have patent protection on certain aspects of our technology. However, we rely primarily on trade secrets, trademarks, copyrights and contractual provisions to protect our proprietary rights. There can be no assurance that these protections will be adequate to protect our proprietary rights, that others will not independently develop or otherwise acquire equivalent or superior technology, or that we can maintain such technology as trade secrets. There also can be no assurance that any patents we possess will not be invalidated, circumvented or challenged. We have taken steps in several jurisdictions to enforce our trademarks against third parties. No assurances can be given that we will ultimately be successful in protecting our trademarks. The laws of certain countries in which our products are or may be developed, manufactured or sold, including various countries in Asia, may not protect our products and intellectual property rights to the same extent as the laws of the United States, or at all. If we fail to protect our intellectual property rights, our business could be negatively impacted.

Disputes relating to claimed infringement of intellectual property rights may adversely affect our business.

We have in the past received notices of claimed infringement of intellectual property rights and been involved in intellectual property litigation. There can be no assurance that third parties will not assert future claims of infringement of intellectual property rights against us, or against customers who we are contractually obligated to indemnify, with respect to existing and future products. In addition, our supply of silicon chips and other components can also be interrupted by intellectual property infringement claims against our suppliers.

Individuals and groups are purchasing intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies such as ours. Although patent and intellectual property disputes may be settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and the necessary licenses or similar arrangements may not be available to us on satisfactory terms, or at all. As a result, we could be prevented from manufacturing and selling some of our products. In addition, if we litigate these kinds of claims, the litigation could be expensive, time consuming and could divert management’s attention from other matters and there is no guarantee we would prevail. Our business could suffer regardless of the outcome of the litigation.

Our distributors may not effectively sell our products and their reseller customers may purchase products from our competitors, which could negatively affect our results of operations.

Our distributors, which currently account for less than 15% of our net revenues, generally offer a diverse array of products from several different manufacturers and suppliers. Accordingly, we are at risk that these distributors may give higher priority to selling products from other suppliers, thus reducing their efforts to sell our products. A reduction in sales efforts by our current distributors could materially and adversely impact our business or results of operations. In addition, if we decrease our distributor-incentive programs (i.e., competitive pricing and rebates), our distributors may decrease the amount of product purchased from us. This could result in a change of business behavior, and distributors may decide to decrease their inventory levels, which could impact availability of our products to their customers.

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As a result of these factors regarding our distributors or other unrelated factors, the reseller customers of our distributors could decide to purchase products developed and manufactured by our competitors. Any loss of demand for our products by value-added resellers and system integrators could have a material adverse effect on our business or results of operations.

Our portfolio of marketable securities could experience a decline in market value, which could materially and adversely affect our financial results.

As of December 28, 2014, we held short-term marketable securities totaling $192.4 million. We invest in debt securities, the majority of which are high investment grade, and we limit the exposure to credit risk through diversification and investment in highly-rated securities. However, investing in highly-rated securities does not entirely mitigate the risk of potential declines in market value. For example, in the past we have recorded impairment charges related to investment securities, including securities issued by companies in the financial services sector, that had previously been rated AA or higher. A deterioration in the economy, including tightening of credit markets or significant volatility in interest rates, could cause declines in value of our marketable securities or could impact the liquidity of the portfolio. If market conditions deteriorate significantly, our results of operations or financial condition could be materially and adversely affected.

Changes in and compliance with regulations could materially and adversely affect us.

Our business, results of operations or financial condition could be materially and adversely affected if new laws, regulations or standards relating to us or our products are implemented or existing ones are changed. In addition, our compliance with existing regulations may have a material adverse impact on us. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was enacted in 2010. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the U.S. Securities and Exchange Commission to adopt additional rules and regulations in these areas. The U.S. Securities and Exchange Commission has also finalized new disclosure requirements relating to the sourcing of so-called conflict minerals from the Democratic Republic of Congo and certain other adjoining countries. Our disclosures have been and will be predicated upon the timely receipt of accurate information from suppliers, who may be unwilling or unable to provide us with the relevant information. As a result, these new requirements could adversely affect our costs, the availability of minerals used in our products and our relationships with customers and suppliers.

We and our customers are subject to various import and export regulations of the United States government and other countries. Certain government export regulations apply to the encryption or other features contained in some of our products. Changes in or violations of any such import or export regulations could materially and adversely affect our business, financial condition or results of operations.

In many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by regulations applicable to us, such as the Foreign Corrupt Practices Act and other anti-bribery laws. Although we have policies and procedures designed to ensure compliance with these laws, our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, may take actions in violation of our policies. Any such violation, even if prohibited by our policies, could have a material adverse effect on our business, financial condition or results of operations.

We face increasing complexity in our product design and procurement operations as we adjust to new and future requirements relating to the chemical and material composition of our products, their safe use, the energy consumption associated with those products and product take-back legislation (i.e., legislation that makes producers of electrical goods financially responsible for specified collection, recycling, treatment and disposal of past and future covered products). We could incur substantial costs, our products could be restricted from entering certain jurisdictions, and we could face other sanctions, if we were to violate or become liable under environmental laws or if our products become non-compliant with environmental laws.

We continually seek ways to increase the energy efficiency of our products. Recent analyses have estimated the amount of global carbon emissions that are due to information technology products. As a result, governmental and non-governmental organizations have turned their attention to development of regulations and standards to drive technological improvements and reduce the amount of carbon emissions. There is a risk that these regulations or standards, once developed, will not fully address the complexity of the technology developed by the IT industry or will favor certain technological approaches that we do not currently utilize. Depending on the regulations or standards that are ultimately adopted, compliance could adversely affect our business, results of operations or financial condition.

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We may experience difficulties in transitioning to smaller geometry process technologies.

We expect to continue to transition our semiconductor products to increasingly smaller line width geometries. This transition requires us to modify the manufacturing processes for our products and to redesign some products, as well as standard cells and other integrated circuit designs that we may use in multiple products. We periodically evaluate the benefits, on a product-by-product basis, of migrating to smaller geometry process technologies. In the past, we have experienced some difficulties in shifting to smaller geometry process technologies or new manufacturing processes, which resulted in reduced manufacturing yields, delays in product deliveries and increased expenses. We may face similar difficulties, delays and expenses as we continue to transition our products to smaller geometry processes.

If we fail to carefully manage the use of “open source” software in our products, we may be required to license key portions of our products on a royalty-free basis or expose key parts of our source code.

Certain of our software may be derived from “open source” software that is generally made available to the public by its authors and/or other third parties. Such open source software is often made available to us under licenses, such as the GNU General Public License, that impose certain obligations on us in the event we were to distribute derivative works of the open source software. These obligations may require us to make source code for the derivative works available to the public and license such derivative works under a particular type of license, rather than the forms of licenses customarily used to protect our intellectual property. In the event the copyright holder of any open source software were to successfully establish in court that we had not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public or stop distributing that work.

System security risks, data protection breaches and cyber-attacks could disrupt our internal operations, and any such disruption could reduce our expected revenues, increase our expenses, damage our reputation and adversely affect our stock price.

Experienced computer programmers and hackers may be able to penetrate our network and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. In addition, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system. The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant and, if our efforts to address these problems are not successful, this could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.

We manage and store various proprietary information and sensitive or confidential data relating to our business. We have also outsourced a number of our business functions to third party contractors. Breaches of our or our third party contractors’ security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us or our customers, including the potential loss or disclosure of such information or data as a result of fraud, trickery or other forms of deception, could expose us or our customers to a risk of loss or misuse of this information, result in litigation and potential liability for us, damage our brand and reputation or otherwise harm our business. In addition, the cost and operational consequences of implementing further data protection measures could be significant.

Our ability to borrow and maintain outstanding borrowings under our credit agreement is subject to certain covenants.

We have a credit agreement that provides us with a $125 million unsecured revolving credit facility that matures in March 2018. Borrowings under the credit agreement may be used for general corporate purposes, including permitted share repurchases and acquisitions. Under the credit agreement, we may increase the revolving commitments or obtain incremental term loans in an aggregate amount up to an additional $100 million, subject to certain conditions. Our ability to borrow under the credit agreement is subject to continued compliance with certain financial and non-financial covenants. In addition, a breach of any of the covenants or other provisions in the credit agreement could result in an event of default, which if not cured or waived, could result in outstanding borrowings becoming immediately due and payable. We may be unable to maintain compliance with these covenants and, if we fail to do so, we may be unable to obtain waivers or amend the covenants. In the event that some or all of our outstanding borrowings are accelerated and become immediately due and payable, we may not have the funds to repay, or the ability to refinance, our borrowings. There were no borrowings outstanding under the credit agreement as of December 28, 2014.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In October 2014, our Board of Directors approved a program to repurchase up to $100 million of our common stock over a period of up to 18 months. Set forth below is information regarding our stock repurchases made during the third quarter of fiscal 2015 under this program.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan		Approximate Dollar Value of Shares that May Yet be Purchased Under the  Plan
September 29, 2014 – October 26, 2014		60,000	$	11.48		60,000	$	99,309,000
October 27, 2014 – November 23, 2014		597,000	$	11.67		597,000	$	92,345,000
November 24, 2014 – December 28, 2014		359,000	$	11.62		359,000	$	88,165,000
		1,016,000	$	11.64		1,016,000	$	88,165,000

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Item 6. Exhibits

Exhibits

Exhibit No.
10.1	QLogic Corporation 2014 New-Hire Performance Incentive Plan.*
10.2	Form of Terms and Conditions of Stock Unit Award under the QLogic Corporation 2014 New-Hire Performance Incentive Plan.*
10.3	Form of Terms and Conditions of Performance Share Award under the QLogic Corporation 2014 New-Hire Performance Incentive Plan.*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Compensation plan, contract or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

QLOGIC CORPORATION
By:	/s/ PRASAD L. RAMPALLI
	Prasad L. Rampalli
	President and
	Chief Executive Officer

By:	/s/ JEAN HU
	Jean Hu
	Senior Vice President and
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: February 5, 2015

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EXHIBIT INDEX

Exhibit No.
10.1	QLogic Corporation 2014 New-Hire Performance Incentive Plan.*
10.2	Form of Terms and Conditions of Stock Unit Award under the QLogic Corporation 2014 New-Hire Performance Incentive Plan.*
10.3	Form of Terms and Conditions of Performance Share Awards under the QLogic Corporation 2014 New-Hire Performance Incentive Plan.*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Compensation plan, contract or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.

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EX-10.1

EXHIBIT 10.1

QLOGIC CORPORATION

2014 NEW-HIRE PERFORMANCE INCENTIVE PLAN

1. PURPOSE OF PLAN

The purpose of this QLogic Corporation 2014 New-Hire Performance Incentive Plan (this “Plan”) of QLogic Corporation, a Delaware corporation (the “Corporation”), is to promote the success of the Corporation and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons. The Plan and awards granted under the Plan are intended to qualify for exemption from the requirement under the listing rules applicable to the Corporation that equity compensation arrangements be approved by the Corporation’s stockholders.

2. ELIGIBILITY

The Administrator (as such term is defined in Section 3.1) may grant awards under this Plan only to those persons that the Administrator determines to be Eligible Persons. An “Eligible Person” is any person who is a newly-hired officer or employee of the Corporation or one of its Subsidiaries and who is selected to participate in this Plan by the Administrator where the award(s) granted to such person under this Plan is(are) an inducement material to the person’s entering into employment with the Corporation or one of its subsidiaries. A former employee of the Corporation or one of its Subsidiaries shall not be considered to be an Eligible Person under this Plan upon any re-hiring of such person by the Corporation or one of its Subsidiaries unless such re-hire occurs after a bona fide period of non-employment of the person by the Corporation and its Subsidiaries. As used herein, “participant” means an Eligible Person who has been granted an award under this Plan. As used herein, “Subsidiary” means any corporation or other entity a majority of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation; and “Board” means the Board of Directors of the Corporation.

3. PLAN ADMINISTRATION

3.1 The Administrator. This Plan shall be administered by and all awards under this Plan shall be authorized by the Administrator. The “Administrator” means the Board or one or more committees appointed by the Board or another committee (within its delegated authority) to administer all or certain aspects of this Plan. Any such committee shall be comprised solely of one or more directors or such number of directors as may be required under applicable law. A committee may delegate some or all of its authority to another committee so constituted. The Board may delegate different levels of authority to different committees with administrative and grant authority under this Plan; provided that any award granted under this Plan shall be approved by the Compensation Committee of the Board or a majority of the Board’s independent directors (with such independence determined under applicable listing rules). Unless otherwise provided in the Bylaws of the Corporation or the applicable charter of any Administrator: (a) a majority of the members of the acting Administrator shall constitute a quorum, and (b) the vote of a majority of the members present assuming the presence of a quorum or the unanimous written consent of the members of the Administrator shall constitute action by the acting Administrator.

Award grants, and transactions in or involving awards, intended to be exempt under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must be duly and timely authorized by the Board or a committee consisting solely of two or more non-employee directors (as this requirement is applied under Rule 16b-3 promulgated under the Exchange Act). To the extent required by any applicable listing agency, this Plan shall be administered by a committee composed entirely of independent directors (within the meaning of the applicable listing agency).

3.2 Powers of the Administrator. Subject to the express provisions of this Plan, the Administrator is authorized and empowered to do all things necessary or desirable in connection with the authorization of awards and the administration of this Plan (in the case of a committee or delegation to one or more officers, within the authority delegated to that committee or person(s)), including, without limitation, the authority to:

(a) determine eligibility and, from among those persons determined to be eligible, the particular Eligible Persons who will receive an award under this Plan;

(b) grant awards to Eligible Persons, determine the price at which securities will be offered or awarded and the number of securities to be offered or awarded to any of such persons, determine the other specific terms and conditions of such awards consistent with the express limits of this Plan, establish the installments (if any) in which such awards shall become exercisable or shall vest (which may include, without limitation, performance and/or time-based schedules), or determine that no delayed exercisability or vesting is required, establish any applicable performance targets, and establish the events of termination or reversion of such awards;

(c) approve the forms of award agreements (which need not be identical either as to type of award or among participants);

(d) construe and interpret this Plan and any agreements defining the rights and obligations of the Corporation, its Subsidiaries, and participants under this Plan, further define the terms used in this Plan, and prescribe, amend and rescind rules and regulations relating to the administration of this Plan or the awards granted under this Plan;

(e) cancel, modify, or waive the Corporation’s rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding awards, subject to any required consent under Section 8.6.5;

(f) accelerate or extend the vesting or exercisability or extend the term of any or all outstanding awards (in the case of options or stock appreciation rights, within the maximum ten-year term of such awards) in such circumstances as the Administrator may deem appropriate (including, without limitation, in connection with a termination of employment or services or other events of a personal nature) subject to any required consent under Section 8.6.5;

(g) adjust the number of shares of Common Stock subject to any award, adjust the price of any or all outstanding awards or otherwise change previously imposed terms and conditions, in such circumstances as the Administrator may deem appropriate, in each case subject to Sections 4 and 8.6 (and subject to the no-repricing provision below);

(h) determine the date of grant of an award, which may be a designated date after but not before the date of the Administrator’s action (unless otherwise designated by the Administrator, the date of grant of an award shall be the date upon which the Administrator took the action granting an award);

(i) determine whether, and the extent to which, adjustments are required pursuant to Section 7 hereof and authorize the termination, conversion, substitution or succession of awards upon the occurrence of an event of the type described in Section 7;

(j) acquire or settle (subject to Sections 7 and 8.6) rights under awards in cash, stock of equivalent value, or other consideration (subject to the no-repricing provision below); and

(k) determine the fair market value of the Common Stock or awards under this Plan from time to time and/or the manner in which such value will be determined.

Notwithstanding the foregoing and except for an adjustment pursuant to Section 7.1 or a repricing approved by stockholders, in no case may the Administrator (1) amend an outstanding stock option or SAR to reduce the exercise price or base price of the award, (2) cancel, exchange, or surrender an outstanding stock option or SAR in exchange for cash or other awards for the purpose of repricing the award, or (3) cancel, exchange, or surrender an outstanding stock option or SAR in exchange for an option or SAR with an exercise or base price that is less than the exercise or base price of the original award.

3.3 Binding Determinations. Any action taken by, or inaction of, the Corporation, any Subsidiary, or the Administrator relating or pursuant to this Plan and within its authority hereunder or under applicable law shall be within the absolute discretion of that entity or body and shall be conclusive and binding upon all

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persons. Neither the Board nor any Board committee, nor any member thereof or person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan (or any award made under this Plan), and all such persons shall be entitled to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including, without limitation, attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors and officers liability insurance coverage that may be in effect from time to time.

3.4 Reliance on Experts. In making any determination or in taking or not taking any action under this Plan, the Board or a committee, as the case may be, may obtain and may rely upon the advice of experts, including employees and professional advisors to the Corporation. No director, officer or agent of the Corporation or any of its Subsidiaries shall be liable for any such action or determination taken or made or omitted in good faith.

3.5 Delegation. The Administrator may delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Corporation or any of its Subsidiaries or to third parties.

4. SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS

4.1 Shares Available. Subject to the provisions of Section 7.1, the capital stock that may be delivered under this Plan shall be shares of the Corporation’s authorized but unissued Common Stock and any shares of its Common Stock held as treasury shares. For purposes of this Plan, “Common Stock” means the common stock of the Corporation and such other securities or property as may become the subject of awards under this Plan, or may become subject to such awards, pursuant to an adjustment made under Section 7.1.

4.2 Share Limits. The maximum number of shares of Common Stock that may be delivered pursuant to awards granted to Eligible Persons under this Plan (the “Share Limit”) is equal to 3,000,000 shares of Common Stock.

Shares issued in respect of any “Full-Value Award” granted under this Plan shall be counted against the foregoing Share Limit as 1.75 shares for every one share issued in connection with such award. (For example, if a stock bonus of 100 shares of Common Stock is granted under this Plan, 175 shares shall be charged against the Share Limit in connection with that award.) For this purpose, a “Full-Value Award” means any award under this Plan that is not a stock option grant or a stock appreciation right grant.

The Share Limit is subject to adjustment as contemplated by Section 4.3, Section 7.1, and Section 8.10.

4.3 Awards Settled in Cash, Reissue of Awards and Shares. Except as provided in the next sentence, shares that are subject to or underlie awards granted under this Plan which expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under this Plan shall again be available for subsequent awards under this Plan. Shares that are exchanged by a participant or withheld by the Corporation as full or partial payment in connection with any stock option or SAR granted under this Plan, as well as any shares exchanged by a participant or withheld by the Corporation or one of its Subsidiaries to satisfy the tax withholding obligations related to any stock option or SAR granted under this Plan, shall not be available for subsequent awards under this Plan. Shares that are exchanged by a participant or withheld by the Corporation as full or partial payment in connection with any Full-Value Award granted under this Plan, as well as any shares exchanged by a participant or withheld by the Corporation or one of its Subsidiaries to satisfy the tax withholding obligations related to any Full-Value Award granted under this Plan, shall be available for subsequent awards under this Plan, provided that any one (1) share so exchanged or withheld in connection with any Full-Value Award shall be credited as one and three-fourths (1.75) shares when determining the number of shares that shall again become available for subsequent awards under this Plan if, upon grant, the shares underlying the related Full-Value Award were counted as one and three-fourths (1.75) shares against the Share Limit. To the extent that an award granted under this Plan is settled in cash or a form other than shares of Common Stock, the shares that would have been delivered had there been no such cash or other settlement shall not be counted against the shares available for issuance under this Plan. In the event that shares of Common Stock are delivered in respect of a dividend equivalent right granted under this Plan, the number of shares delivered with respect to the award shall be counted against the share limits of this Plan. To the extent that shares of Common

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Stock are delivered pursuant to the exercise of a stock appreciation right or stock option granted under this Plan, the number of underlying shares as to which the exercise related shall be counted against the applicable share limits under Section 4.2, as opposed to only counting the shares issued. (For purposes of clarity, if a stock appreciation right relates to 100,000 shares and is exercised at a time when the payment due to the participant is 15,000 shares, 100,000 shares shall be charged against the applicable share limits under Section 4.2 with respect to such exercise.) Refer to Section 8.10 for application of the foregoing share limits with respect to assumed awards.

4.4 Reservation of Shares; No Fractional Shares; Minimum Issue. The Corporation shall at all times reserve a number of shares of Common Stock sufficient to cover the Corporation’s obligations and contingent obligations to deliver shares with respect to awards then outstanding under this Plan (exclusive of any dividend equivalent obligations to the extent the Corporation has the right to settle such rights in cash). No fractional shares shall be delivered under this Plan. The Administrator may pay cash in lieu of any fractional shares in settlements of awards under this Plan. No fewer than 100 shares may be purchased on exercise of any award (or, in the case of stock appreciation or purchase rights, no fewer than 100 rights may be exercised at any one time) unless the total number purchased or exercised is the total number at the time available for purchase or exercise under the award.

5. AWARDS

5.1 Type and Form of Awards. The Administrator shall determine the type or types of award(s) to be made to each selected Eligible Person. Awards may be granted singly, in combination or in tandem. Awards also may be made in combination or in tandem with, in replacement of, as alternatives to, or as the payment form for grants or rights under any other employee or compensation plan of the Corporation or one of its Subsidiaries. The types of awards that may be granted under this Plan are (subject, in each case, to the no-repricing provisions of Section 3.2):

5.1.1 Stock Options. A stock option is the grant of a right to purchase a specified number of shares of Common Stock during a specified period as determined by the Administrator. Each option granted under this Plan shall be a nonqualified stock option and shall not be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The maximum term of each option shall be ten (10) years. The per share exercise price for each option shall be not less than 100% of the fair market value of a share of Common Stock on the date of grant of the option. When an option is exercised, the exercise price for the shares to be purchased shall be paid in full in cash or such other method permitted by the Administrator consistent with Section 5.5.

5.1.2 Stock Appreciation Rights. A stock appreciation right or “SAR” is a right to receive a payment, in cash and/or Common Stock, equal to the excess of the fair market value of a specified number of shares of Common Stock on the date the SAR is exercised over the fair market value of a share of Common Stock on the date the SAR was granted (the “base price”) as set forth in the applicable award agreement. The maximum term of an SAR shall be ten (10) years.

5.1.3 Other Awards; Dividend Equivalent Rights. The other types of awards that may be granted under this Plan include: (a) stock bonuses, restricted stock, performance stock, stock units, phantom stock or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the Common Stock, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof; (b) any similar securities with a value derived from the value of or related to the Common Stock and/or returns thereon; or (c) cash awards. Dividend equivalent rights may be granted as a separate award or in connection with another award under this Plan; provided, however, that dividend equivalent rights may not be granted in connection with a stock option or SAR granted under this Plan. In addition, any dividends and/or dividend equivalents as to the unvested portion of a restricted stock award that is subject to performance-based vesting requirements or the unvested portion of a stock unit award that is subject to performance-based vesting requirements will be subject to termination and forfeiture to the same extent as the corresponding portion of the award to which they relate.

5.2 Reserved.

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5.3 Award Agreements. Each award shall be evidenced by either (1) a written award agreement in a form approved by the Administrator and executed by the Corporation by an officer duly authorized to act on its behalf, or (2) an electronic notice of award grant in a form approved by the Administrator and recorded by the Corporation (or its designee) in an electronic recordkeeping system used for the purpose of tracking award grants under this Plan generally (in each case, an “award agreement”), as the Administrator may provide and, in each case and if required by the Administrator, executed or otherwise electronically accepted by the recipient of the award in such form and manner as the Administrator may require. The Administrator may authorize any officer of the Corporation (other than the particular award recipient) to execute any or all award agreements on behalf of the Corporation. The award agreement shall set forth the material terms and conditions of the award as established by the Administrator consistent with the express limitations of this Plan.

5.4 Deferrals and Settlements. Payment of awards may be in the form of cash, Common Stock, other awards or combinations thereof as the Administrator shall determine, and with such restrictions as it may impose. The Administrator may also permit participants to elect to defer the issuance of shares or the settlement of awards in cash under such rules and procedures as it may establish under this Plan. The Administrator may also provide that deferred settlements include the payment or crediting of interest or other earnings on the deferral amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominated in shares.

5.5 Consideration for Common Stock or Awards. The purchase price for any award granted under this Plan or the Common Stock to be delivered pursuant to an award, as applicable, may be paid by means of any lawful consideration as determined by the Administrator, including, without limitation, one or a combination of the following methods:

• services rendered by the recipient of such award;

• cash, check payable to the order of the Corporation, or electronic funds transfer;

• notice and third party payment in such manner as may be authorized by the Administrator;

• the delivery of previously owned shares of Common Stock;

• by a reduction in the number of shares otherwise deliverable pursuant to the award; or

• subject to such procedures as the Administrator may adopt, pursuant to a “cashless exercise” with a third party who provides financing for the purposes of (or who otherwise facilitates) the purchase or exercise of awards.

In no event shall any shares newly-issued by the Corporation be issued for less than the minimum lawful consideration for such shares or for consideration other than consideration permitted by applicable state law. In the event that the Administrator allows a participant to exercise an award by delivering shares of Common Stock previously owned by such participant and unless otherwise expressly provided by the Administrator, any shares delivered which were initially acquired by the participant from the Corporation (upon exercise of a stock option or otherwise) must have been owned by the participant at least six months as of the date of delivery. Shares of Common Stock used to satisfy the exercise price of an option shall be valued at their fair market value on the date of exercise. The Corporation will not be obligated to deliver any shares unless and until it receives full payment of the exercise or purchase price therefor and any related withholding obligations under Section 8.5 and any other conditions to exercise or purchase have been satisfied. Unless otherwise expressly provided in the applicable award agreement, the Administrator may at any time eliminate or limit a participant’s ability to pay the purchase or exercise price of any award or shares by any method other than cash payment to the Corporation.

5.6 Definition of Fair Market Value. For purposes of this Plan, “fair market value” shall mean, unless otherwise determined or provided by the Administrator in the circumstances, the closing price (in regular trading) for a share of Common Stock on the NASDAQ Stock Market (the “Market”) for the date in

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question or, if no sales of Common Stock were reported on the Market on that date, the closing price (in regular trading) for a share of Common Stock on the Market for the next preceding day on which sales of Common Stock were reported on the Market. The Administrator may, however, provide with respect to one or more awards that the fair market value shall equal the closing price (in regular trading) for a share of Common Stock on the Market on the last trading day preceding the date in question or the average of the high and low trading prices of a share of Common Stock on the Market for the date in question or the most recent trading day. If the Common Stock is no longer listed or is no longer actively traded on the Market as of the applicable date, the fair market value of the Common Stock shall be the value as reasonably determined by the Administrator for purposes of the award in the circumstances. The Administrator also may adopt a different methodology for determining fair market value with respect to one or more awards if a different methodology is necessary or advisable to secure any intended favorable tax, legal or other treatment for the particular award(s) (for example, and without limitation, the Administrator may provide that fair market value for purposes of one or more awards will be based on an average of closing prices (or the average of high and low daily trading prices) for a specified period preceding the relevant date).

5.7 Transfer Restrictions.

5.7.1 Limitations on Exercise and Transfer. Unless otherwise expressly provided in (or pursuant to) this Section 5.7 or required by applicable law, (a) all awards are non-transferable and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge; (b) awards shall be exercised only by the participant; and (c) amounts payable or shares issuable pursuant to any award shall be delivered only to (or for the account of) the participant.

5.7.2 Exceptions. The Administrator may permit awards to be exercised by and paid to, or otherwise transferred to, other persons or entities pursuant to such conditions and procedures, including limitations on subsequent transfers, as the Administrator may, in its sole discretion, establish in writing. Any permitted transfer shall be subject to compliance with applicable federal and state securities laws and shall not be for value (other than nominal consideration, settlement of marital property rights, or for interests in an entity in which more than 50% of the voting interests are held by the Eligible Person or by the Eligible Person’s family members).

5.7.3 Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 5.7.1 shall not apply to:

(a) transfers to the Corporation,

(b) the designation of a beneficiary to receive benefits in the event of the participant’s death or, if the participant has died, transfers to or exercise by the participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution,

(c) subject to such rules as the Administrator may adopt, transfers to a family member (or former family member) pursuant to a domestic relations order,

(d) if the participant has suffered a disability, permitted transfers or exercises on behalf of the participant by his or her legal representative, or

(e) the authorization by the Administrator of “cashless exercise” procedures with third parties who provide financing for the purpose of (or who otherwise facilitate) the exercise of awards consistent with applicable laws and the express authorization of the Administrator.

5.8 International Awards. One or more awards may be granted to Eligible Persons who provide services to the Corporation or one of its Subsidiaries outside of the United States. Any awards granted to such persons may be granted pursuant to the terms and conditions of any applicable sub-plans, if any, appended to this Plan and approved by the Administrator.

6. EFFECT OF TERMINATION OF SERVICE ON AWARDS

6.1 General. The Administrator shall establish the effect of a termination of employment or service on the rights and benefits under each award under this Plan and in so doing may make distinctions based upon,

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inter alia, the cause of termination and type of award. If the participant is not an employee of the Corporation or one of its Subsidiaries and provides other services to the Corporation or one of its Subsidiaries, the Administrator shall be the sole judge for purposes of this Plan (unless a contract or the award otherwise provides) of whether the participant continues to render services to the Corporation or one of its Subsidiaries and the date, if any, upon which such services shall be deemed to have terminated.

6.2 Events Not Deemed Terminations of Service. Unless the express policy of the Corporation or one of its Subsidiaries, or the Administrator, otherwise provides, the employment relationship shall not be considered terminated in the case of (a) sick leave, (b) military leave, or (c) any other leave of absence authorized by the Corporation or one of its Subsidiaries, or the Administrator; provided that, unless reemployment upon the expiration of such leave is guaranteed by contract or law or the Administrator otherwise provides, such leave is for a period of not more than three months. In the case of any employee of the Corporation or one of its Subsidiaries on an approved leave of absence, continued vesting of the award while on leave from the employ of the Corporation or one of its Subsidiaries may be suspended until the employee returns to service, unless the Administrator otherwise provides or applicable law otherwise requires. In no event shall an award be exercised after the expiration of the term set forth in the award agreement.

6.3 Effect of Change of Subsidiary Status. For purposes of this Plan and any award, if an entity ceases to be a Subsidiary of the Corporation a termination of employment or service shall be deemed to have occurred with respect to each Eligible Person in respect of such Subsidiary who does not continue as an Eligible Person in respect of the Corporation or another Subsidiary that continues as such after giving effect to the transaction or other event giving rise to the change in status unless the Subsidiary that is sold, spun-off or otherwise divested (or its successor or a direct or indirect parent of such Subsidiary or successor) assumes the Eligible Person’s award(s) in connection with such transaction.

7. ADJUSTMENTS; ACCELERATION

7.1 Adjustments. Subject to Section 7.2, upon (or, as may be necessary to effect the adjustment, immediately prior to): any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split; any merger, combination, consolidation, conversion or other reorganization; any spin-off, split-up, or similar extraordinary dividend distribution in respect of the Common Stock; or any exchange of Common Stock or other securities of the Corporation, or any similar, unusual or extraordinary corporate transaction in respect of the Common Stock; then the Administrator shall equitably and proportionately adjust (1) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of awards (including the specific share limits, maximums and numbers of shares set forth elsewhere in this Plan), (2) the number, amount and type of shares of Common Stock (or other securities or property) subject to any outstanding awards, (3) the grant, purchase, or exercise price (which term includes the base price of any SAR or similar right) of any outstanding awards, and/or (4) the securities, cash or other property deliverable upon exercise or payment of any outstanding awards, in each case to the extent necessary to preserve (but not increase) the level of incentives intended by this Plan and the then-outstanding awards.

Unless otherwise expressly provided in the applicable award agreement, upon (or, as may be necessary to effect the adjustment, immediately prior to) any event or transaction described in the preceding paragraph or a sale of all or substantially all of the business or assets of the Corporation as an entirety, the Administrator shall equitably and proportionately adjust the performance standards applicable to any then-outstanding performance-based awards to the extent necessary to preserve (but not increase) the level of incentives intended by this Plan and the then-outstanding performance-based awards.

It is intended that, if possible, any adjustments contemplated by the preceding two paragraphs be made in a manner that satisfies applicable U.S. legal, tax (including, without limitation and as applicable in the circumstances, Section 424 of the Code and Section 409A of the Code) and accounting (so as to not trigger any charge to earnings with respect to such adjustment) requirements.

Without limiting the generality of Section 3.3, any good faith determination by the Administrator as to whether an adjustment is required in the circumstances pursuant to this Section 7.1, and the extent and nature of any such adjustment, shall be conclusive and binding on all persons.

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7.2 Corporate Transactions—Assumption and Termination of Awards. Upon the occurrence of any of the following: any merger, combination, consolidation, conversion or other reorganization in connection with which the Corporation does not survive (or does not survive as a public company in respect of its Common Stock); any exchange of Common Stock or other securities of the Corporation in connection with which the Corporation does not survive (or does not survive as a public company in respect of its Common Stock); a sale of all or substantially all the business, stock or assets of the Corporation in connection with which the Corporation does not survive (or does not survive as a public company in respect of its Common Stock); a dissolution of the Corporation; or any other event in which the Corporation does not survive (or does not survive as a public company in respect of its Common Stock); then the Administrator may make provision for a cash payment in settlement of, or for the termination, assumption, substitution or exchange of any or all outstanding share-based awards or the cash, securities or property deliverable to the holder of any or all outstanding share-based awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Common Stock upon or in respect of such event. Upon the occurrence of any event described in the preceding sentence, then, unless the Administrator has made a provision for the substitution, assumption, exchange or other continuation or settlement of the award or the award would otherwise continue in accordance with its terms in the circumstances: (1) unless otherwise provided in the applicable award agreement, each then-outstanding option and SAR shall become fully vested, all shares of restricted stock then outstanding shall fully vest free of restrictions, and each other award granted under this Plan that is then outstanding shall become payable to the holder of such award; and (2) each award shall terminate upon the related event; provided that the holder of an option or SAR shall be given reasonable advance notice of the impending termination and a reasonable opportunity to exercise his or her outstanding vested options and SARs (after giving effect to any accelerated vesting required in the circumstances) in accordance with their terms before the termination of such awards (except that in no case shall more than ten days’ notice of the impending termination be required and any acceleration of vesting and any exercise of any portion of an award that is so accelerated may be made contingent upon the actual occurrence of the event).

Without limiting the preceding paragraph, in connection with any event referred to in the preceding paragraph or any change in control event defined in any applicable award agreement, the Administrator may, in its discretion, provide for the accelerated vesting of any award or awards as and to the extent determined by the Administrator in the circumstances.

The Administrator may adopt such valuation methodologies for outstanding awards as it deems reasonable in the event of a cash or property settlement and, in the case of options, SARs or similar rights, but without limitation on other methodologies, may base such settlement solely upon the excess if any of the per share amount payable upon or in respect of such event over the exercise or base price of the award.

In any of the events referred to in this Section 7.2, the Administrator may take such action contemplated by this Section 7.2 prior to such event (as opposed to on the occurrence of such event) to the extent that the Administrator deems the action necessary to permit the participant to realize the benefits intended to be conveyed with respect to the underlying shares. Without limiting the generality of the foregoing, the Administrator may deem an acceleration and/or termination to occur immediately prior to the applicable event and, in such circumstances, will reinstate the original terms of the award if an event giving rise to an acceleration and/or termination does not occur.

Without limiting the generality of Section 3.3, any good faith determination by the Administrator pursuant to its authority under this Section 7.2 shall be conclusive and binding on all persons.

7.3 Other Acceleration Rules. The Administrator may override the provisions of Section 7.2 by express provision in the award agreement and may accord any Eligible Person a right to refuse any acceleration, whether pursuant to the award agreement or otherwise, in such circumstances as the Administrator may approve.

8. OTHER PROVISIONS

8.1 Compliance with Laws. This Plan, the granting and vesting of awards under this Plan, the offer, issuance and delivery of shares of Common Stock, the acceptance of promissory notes and/or the payment of money under this Plan or under awards are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law, federal margin requirements) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Corporation, be necessary or advisable in connection therewith. The person acquiring any securities

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under this Plan will, if requested by the Corporation or one of its Subsidiaries, provide such assurances and representations to the Corporation or one of its Subsidiaries as the Administrator may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements.

8.2 No Rights to Award. No person shall have any claim or rights to be granted an award (or additional awards, as the case may be) under this Plan, subject to any express contractual rights (set forth in a document other than this Plan) to the contrary.

8.3 No Employment/Service Contract. Nothing contained in this Plan (or in any other documents under this Plan or in any award) shall confer upon any Eligible Person or other participant any right to continue in the employ or other service of the Corporation or one of its Subsidiaries, constitute any contract or agreement of employment or other service or affect an employee’s status as an employee at will, nor shall interfere in any way with the right of the Corporation or one of its Subsidiaries to change a person’s compensation or other benefits, or to terminate his or her employment or other service, with or without cause. Nothing in this Section 8.3, however, is intended to adversely affect any express independent right of such person under a separate employment or service contract other than an award agreement.

8.4 Plan Not Funded. Awards payable under this Plan shall be payable in shares or from the general assets of the Corporation, and no special or separate reserve, fund or deposit shall be made to assure payment of such awards. No participant, beneficiary or other person shall have any right, title or interest in any fund or in any specific asset (including shares of Common Stock, except as expressly otherwise provided) of the Corporation or one of its Subsidiaries by reason of any award hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Corporation or one of its Subsidiaries and any participant, beneficiary or other person. To the extent that a participant, beneficiary or other person acquires a right to receive payment pursuant to any award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Corporation.

8.5 Tax Withholding. Upon any exercise, vesting, or payment of any award, or upon any other tax withholding event with respect to an award, the Corporation or one of its Subsidiaries shall have the right at its option to:

(a) require the participant (or the participant’s personal representative or beneficiary, as the case may be) to pay or provide for payment of at least the minimum amount of any taxes which the Corporation or one of its Subsidiaries may be required to withhold with respect to such award event or payment; or

(b) deduct from any amount otherwise payable in cash (whether related to the award or otherwise) to the participant (or the participant’s personal representative or beneficiary, as the case may be) the minimum amount of any taxes which the Corporation or one of its Subsidiaries may be required to withhold with respect to such award event or payment.

In any case where a tax is required to be withheld in connection with the delivery of shares of Common Stock under this Plan, the Administrator may in its sole discretion (subject to Section 8.1) require or grant (either at the time of the award or thereafter) to the participant the right to elect, pursuant to such rules and subject to such conditions as the Administrator may establish, that the Corporation reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of shares, valued in a consistent manner at their fair market value or at the sales price in accordance with authorized procedures for cashless exercises, necessary to satisfy the minimum applicable withholding obligation on exercise, vesting or payment. In no event shall the shares withheld exceed the minimum whole number of shares required for tax withholding under applicable law. The Corporation may, with the Administrator’s approval, accept one or more promissory notes from any Eligible Person in connection with taxes required to be withheld upon the exercise, vesting or payment of any award under this Plan; provided that any such note shall be subject to terms and conditions established by the Administrator and the requirements of applicable law.

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8.6 Effective Date, Termination and Suspension, Amendments.

8.6.1 Effective Date. This Plan is effective as of November 13, 2014, the date of its approval by the Board (the “Effective Date”). Unless earlier terminated by the Board, this Plan shall terminate at the close of business on the day before the tenth (10^th) anniversary of the Effective Date. After the termination of this Plan either upon such stated expiration date or its earlier termination by the Board, no additional awards may be granted under this Plan, but previously granted awards (and the authority of the Administrator with respect thereto, including the authority to amend such awards) shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan.

8.6.2 Board Authorization. The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part. No awards may be granted during any period that the Board suspends this Plan.

8.6.3 Stockholder Approval. To the extent then required by applicable law or any applicable listing agency or required under the Code to preserve the intended tax consequences of this Plan, or deemed necessary or advisable by the Board, any amendment to this Plan shall be subject to stockholder approval.

8.6.4 Amendments to Awards. Without limiting any other express authority of the Administrator under (but subject to) the express limits of this Plan, the Administrator by agreement or resolution may waive conditions of or limitations on awards to participants that the Administrator in the prior exercise of its discretion has imposed, without the consent of a participant, and (subject to the requirements of Sections 3.2 and 8.6.5) may make other changes to the terms and conditions of awards. Any amendment or other action that would constitute a repricing of an award is subject to the limitations set forth in Section 3.2.

8.6.5 Limitations on Amendments to Plan and Awards. No amendment, suspension or termination of this Plan or amendment of any outstanding award agreement shall, without written consent of the participant, affect in any manner materially adverse to the participant any rights or benefits of the participant or obligations of the Corporation under any award granted under this Plan prior to the effective date of such change. Changes, settlements and other actions contemplated by Section 7 shall not be deemed to constitute changes or amendments for purposes of this Section 8.6.

8.7 Privileges of Stock Ownership. Except as otherwise expressly authorized by the Administrator or this Plan, a participant shall not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by the participant. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery.

8.8 Governing Law; Construction; Severability.

8.8.1 Choice of Law. This Plan, the awards, all documents evidencing awards and all other related documents shall be governed by, and construed in accordance with the laws of the State of Delaware.

8.8.2 Severability. If a court of competent jurisdiction holds any provision invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.

8.8.3 Plan Construction. It is the intent of the Corporation that the awards and transactions permitted by awards be interpreted in a manner that, in the case of participants who are or may be subject to Section 16 of the Exchange Act, qualify, to the maximum extent compatible with the express terms of the award, for exemption from matching liability under Rule 16b-3 promulgated under the Exchange Act. Notwithstanding the foregoing, the Corporation shall have no liability to any participant for Section 16 consequences of awards or events under awards if an award or event does not so qualify.

8.9 Captions. Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.

8.10 Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other Corporation. Awards may be granted to Eligible Persons in substitution for or in connection with an assumption of employee stock options, SARs, restricted stock or other stock-based awards granted by other entities to persons who are or who will become Eligible Persons in respect of the Corporation or one of its Subsidiaries, in

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connection with a distribution, merger or other reorganization by or with the granting entity or an affiliated entity, or the acquisition by the Corporation or one of its Subsidiaries, directly or indirectly, of all or a substantial part of the stock or assets of the employing entity. The awards so granted need not comply with other specific terms of this Plan, provided the awards reflect only adjustments giving effect to the assumption or substitution consistent with the conversion applicable to the Common Stock in the transaction and any change in the issuer of the security. Any shares that are delivered and any awards that are granted by, or become obligations of, the Corporation, as a result of the assumption by the Corporation of, or in substitution for, outstanding awards previously granted by an acquired company (or previously granted by a predecessor employer (or direct or indirect parent thereof) in the case of persons that become employed by the Corporation or one of its Subsidiaries in connection with a business or asset acquisition or similar transaction) shall not be counted against the Share Limit or other limits on the number of shares available for issuance under this Plan.

8.11 Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Administrator to grant awards or authorize any other compensation, with or without reference to the Common Stock, under any other plan or authority.

8.12 No Corporate Action Restriction. The existence of this Plan, the award agreements and the awards granted hereunder shall not limit, affect or restrict in any way the right or power of the Board or the stockholders of the Corporation to make or authorize: (a) any adjustment, recapitalization, reorganization or other change in the capital structure or business of the Corporation or any Subsidiary, (b) any merger, amalgamation, consolidation or change in the ownership of the Corporation or any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior preference stock ahead of or affecting the capital stock (or the rights thereof) of the Corporation or any Subsidiary, (d) any dissolution or liquidation of the Corporation or any Subsidiary, (e) any sale or transfer of all or any part of the assets or business of the Corporation or any Subsidiary, or (f) any other corporate act or proceeding by the Corporation or any Subsidiary. No participant, beneficiary or any other person shall have any claim under any award or award agreement against any member of the Board or the Administrator, or the Corporation or any employees, officers or agents of the Corporation or any Subsidiary, as a result of any such action.

8.13 Other Company Benefit and Compensation Programs. Payments and other benefits received by a participant under an award made pursuant to this Plan shall not be deemed a part of a participant’s compensation for purposes of the determination of benefits under any other employee welfare or benefit plans or arrangements, if any, provided by the Corporation or any Subsidiary, except where the Administrator expressly otherwise provides or authorizes in writing. Awards under this Plan may be made in addition to, in combination with, as alternatives to or in payment of grants, awards or commitments under any other plans or arrangements of the Corporation or its Subsidiaries.

8.14 Clawback Policy. The awards granted under this Plan are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of awards or any shares of Common Stock or other cash or property received with respect to the awards (including any value received from a disposition of the shares acquired upon payment of the awards).

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EX-10.2

EXHIBIT 10.2

QLOGIC CORPORATION

2014 NEW-HIRE PERFORMANCE INCENTIVE PLAN

TERMS AND CONDITIONS OF STOCK UNIT AWARD

1. General.

Subject to these Terms and Conditions of Stock Unit Award (these “Terms”) and the QLogic Corporation 2014 New-Hire Performance Incentive Plan (including any applicable sub-plan, the “Plan”), QLogic Corporation (including its Subsidiaries, the “Corporation”) has granted to the Grantee (as defined below) a credit of stock units under the Plan (the “Stock Unit Award” or “Award”) with respect to the number of stock units provided in the Notice of Grant Agreement (“Grant Notice”) corresponding to that particular Award grant (subject to adjustment as provided in Section 7.1 of the Plan) (the “Stock Units”). As used herein, the term “stock unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of QLogic Corporation’s Common Stock (subject to adjustment as provided in Section 7.1 of the Plan) solely for purposes of the Plan and these Terms. The recipient of the Award identified in the Grant Notice is referred to as the “Grantee.” The effective date of grant of the Award as set forth on the Grants tab on the UBS OneSource website (https://onesource.ubs.com/qlgc) is referred to as the “Award Date.” Capitalized terms are defined in the Plan if not defined herein. The Award has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee. The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to the Grantee if such Stock Units vest pursuant to Section 2. The Stock Units shall not be treated as property or as a trust fund of any kind.

The Grant Notice and these Terms are collectively referred to as the “Stock Unit Award Agreement” applicable to the Stock Units, or this “Stock Unit Award Agreement.”

2. Vesting.

Subject to adjustment under Section 7.1 of the Plan and further subject to early termination under Section 6 of these Terms, the Award shall vest and become non-forfeitable with respect to: [Remaining Vesting terms to be determined at time of grant].

3. Continuance of Employment/Service Required; No Employment/Service Commitment.

The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Stock Unit Award Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 6 below or under the Plan.

Nothing contained in this Stock Unit Award Agreement or the Plan constitutes a continued employment or service commitment by the Corporation, affects the Grantee’s status, if he or she is an employee, as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation,

interferes in any way with the right of the Corporation at any time to terminate such employment or service, or affects the right of the Corporation to increase or decrease the Grantee’s other compensation. In jurisdictions that do not recognize an at will employment relationship, the prior sentence is subject to Grantee’s contract of employment and applicable law.

4. No Stockholder Rights.

The Grantee shall have no rights as a stockholder of the Corporation, no dividend rights and no voting rights with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by the Grantee. No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate.

5. Crediting of Vested Stock Units; Tax Withholding.

5.1 Crediting of Vested Stock Units.

On or as soon as administratively practical following each vesting of the applicable portion of the total Award pursuant to Section 2 (and in all events not later than two and one-half months after the vesting date), the Corporation shall deliver to the Grantee a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion) equal to the number of Stock Units subject to this Award that vest on the applicable vesting date, unless such Stock Units terminate prior to the given vesting date pursuant to Section 6. The Corporation’s obligation to deliver or credit shares of Common Stock with respect to vested Stock Units is subject to the condition precedent that the Grantee or other person entitled under the Plan to receive any shares with respect to the vested Stock Units (a) deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan and (b) make arrangements satisfactory to the Corporation to pay or otherwise satisfy the tax withholding requirements with respect to the vested Stock Units. The Grantee shall have no further rights with respect to any Stock Units that are paid or that terminate pursuant to Section 6.

The Corporation has established a web – based system for managing Stock Unit Awards. Currently, UBS Financial Services, Inc. (“UBS”) manages Stock Unit Awards. In the event that the Grantee wishes to sell shares of Common Stock granted pursuant to a vested Stock Unit Award, the Grantee must contact UBS either by logging on to the UBS OneSource website (https://onesource.ubs.com/qlgc) or by calling the UBS Call Center at 1-866-756-4421. UBS will request from the Grantee information regarding the Common Stock to be sold and the order type.

5.2 Responsibility for Taxes. The ultimate liability for any and all tax, social insurance and payroll tax withholding legally payable by an employee under applicable law (including without limitation laws of foreign jurisdictions) (“Tax-Related Items”) is and remains Grantee’s responsibility and liability and the Corporation (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant or vesting of the Award and the subsequent sale of the shares of Common Stock subject to the Award; and (b) does not commit to structure the terms of the grant or any aspect of the Award to reduce or eliminate Grantee’s liability for Tax-Related Items.

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Upon the granting of the Stock Unit Award or the vesting or payment of shares of the Common Stock in respect of the Stock Unit Award or any other event in respect of the Stock Unit Awards that triggers withholding obligations of the Corporation or its Subsidiaries, the Corporation shall have the right at its option to (a) require the Grantee to pay or provide for payment in cash of the amount of any taxes that the Corporation may be required to withhold with respect to such withholding event, or (b) deduct from any amount payable to the Grantee the amount of any taxes which the Corporation may be required to withhold with respect to such withholding event. In any case where a tax is required to be withheld in connection with the Stock Unit Award or the delivery of shares of Common Stock under this Stock Unit Award Agreement, the Administrator may, in its sole discretion, direct the Corporation to reduce the number of shares subject to the Stock Unit Award or shares to be delivered pursuant to such Award by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy such withholding obligation at the minimum applicable withholding rates. Alternatively, or in addition, if permissible under local law, the Corporation may sell or arrange for the sale of shares of Common Stock that Grantee is due to acquire to meet the minimum withholding obligations for Tax-Related Items. Finally, Grantee shall pay to the Corporation any amount of any Tax-Related Items that the Corporation may be required to withhold in connection with the Award that cannot be satisfied by the means previously described.

6. Termination of Employment/Service.

The Grantee’s Stock Units shall terminate to the extent such units have not become vested prior to the first date the Grantee is no longer employed by or providing services to the Corporation or one of its Subsidiaries, regardless of the reason for the termination of the Grantee’s employment or service with the Corporation or such Subsidiary, whether with or without cause, voluntarily or involuntarily. If the Grantee is employed by or in service to a Subsidiary and that entity ceases to be a Subsidiary, such event shall be deemed to be a termination of employment or service of the Grantee for purposes of this Agreement, unless the Grantee otherwise continues to be employed by or in service to the Corporation or another of its Subsidiaries following such event. If any unvested Stock Units are terminated hereunder, such Stock Units shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Grantee, or the Grantee’s beneficiary or personal representative, as the case may be. The Administrator shall be the sole judge of whether the Grantee continues to render employment or services for purposes of this Stock Unit Award Agreement; provided, that the employment or service relationship shall not be considered terminated in the case of any statutory leave.

7. Restrictions on Transfer.

Subject to applicable law, neither the Stock Unit Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.

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8. Adjustment.

Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator shall make adjustments if appropriate in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Stock Unit Award.

9. Data Privacy Consent.

Grantee explicitly and unambiguously consents to the collection, use, transfer and processing, in electronic or other form, of Grantee’s personal data as described in this document by and among, as applicable, the Corporation or its affiliates (or their agents) for the exclusive purpose of implementing, administering and managing Grantee’s participation in the Plan.

Grantee further understands that the Corporation or its affiliates (or their agents) hold certain personal information about Grantee, including, but not limited to, Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock held in the Corporation and details of all Awards or other entitlements to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Grantee’s country, or elsewhere, and that the recipient’s country may not have the same level of data privacy laws and protections as Grantee’s country. Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Grantee may elect to deposit any shares of Common Stock acquired upon vesting of the Award. Grantee understands that Data will be held only as long as is necessary to implement, administer and manage Grantee’s participation in the Plan. Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or withdraw the consents herein by contacting the Corporation’s human resources department. Grantee understands that withdrawal of consent may affect Grantee’s ability to exercise or realize benefits from the Award.

10. Nature of Grant.

In accepting the grant of the Award, Grantee acknowledges that: (i) the Plan is established voluntarily by the Corporation, it is discretionary in nature and it may be modified, suspended or terminated by the Corporation at any time, as provided in the Plan and these Terms; (ii) the grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of stock units, or benefits in lieu of stock units even if stock units have been granted repeatedly in the past; (iii) all decisions with respect to

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future grants will be at the sole discretion of the Corporation; (iv) Grantee’s participation in the Plan shall not create a right to further employment or service and shall not interfere with the ability of the Corporation to terminate Grantee’s employment or service relationship at any time with or without cause (subject to Grantee’s contract of employment or service, if one exists, and applicable law); (v) Grantee’s participation in the Plan is voluntary; (vi) in the event that Grantee is not an employee of the Corporation, the Award grant will not be interpreted to form an employment contract or relationship with the Corporation, and furthermore, the Award grant will not be interpreted to form an employment contract with the Corporation and any of its affiliates; (vii) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty; (viii) if Grantee vests in his or her Award and shares of Common Stock are no longer restricted, the value of those shares of Common Stock acquired upon vesting may increase or decrease in value, even below the price at which such Award was originally granted; and (ix) no claim or entitlement to compensation or damages arises from termination of the Award or diminution in value of the Award or shares of Common Stock acquired pursuant to the Award whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or employment or otherwise howsoever. Grantee irrevocably releases the Corporation and its affiliates from any such claim that may arise and Grantee shall not be entitled to any compensation or damages whatsoever or however described by reason of any termination, withdrawal or alteration of rights or expectations under the Plan.

11. Clawback Policy.

Notwithstanding anything else contained herein or in the Plan to the contrary, but subject to applicable law, this Stock Unit Award Agreement is subject to the Company’s clawback policy, as well as the “clawback” provisions of applicable law, rules and regulations, as each may be adopted and in effect from time to time (collectively, the “Clawback Policy”). The provisions of the Clawback Policy are in addition to (and not in lieu of) any rights to repayment the Company may have under Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable laws.

12. Notices.

Any notice to be given under the terms of this Stock Unit Award Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the address last reflected on the Corporation’s payroll records or at Grantee’s place of work, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or by pre-paid post/mail shall be enclosed in a properly sealed envelope addressed as aforesaid. Any such notice shall be given only when received, but if the Grantee is no longer employed by or in service to the Corporation, shall be deemed to have been duly given five business days after the date posted/mailed in accordance with the foregoing provisions of this Section 12.

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13. Plan.

The Award and all rights of the Grantee under this Stock Unit Award Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of the Plan and this Stock Unit Award Agreement. The Grantee acknowledges having read and understanding the Plan and this Stock Unit Award Agreement. Unless otherwise expressly provided in other sections of this Stock Unit Award Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

14. Entire Agreement.

This Stock Unit Award Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Stock Unit Award Agreement may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

15. Governing Law.

This Stock Unit Award Agreement shall be governed by and construed and enforced and executed in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder.

16. Effect of this Agreement.

Subject to the Corporation’s right to terminate the Award pursuant to Section 7.2 of the Plan, this Stock Unit Award Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Corporation.

17. Limitation on Grantee’s Rights.

Participation in the Plan confers no rights or interests other than as herein provided. This Stock Unit Award Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. The Grantee shall have only the rights of a general unsecured creditor of the Corporation with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to Stock Units, as and when payable hereunder.

18. Section Headings.

The section headings of this Stock Unit Award Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

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19. Construction.

It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code. The Stock Unit Award Agreement shall be construed and interpreted consistent with that intent.

20. Acceptance.

In accepting the grant of the Award, Grantee acknowledges receipt of a copy of the Plan, the Grant Notice and these Terms. Grantee has read and understands the terms and provisions thereof, and has accepted the Award subject to all terms and conditions of the Plan, the Grant Notice and these Terms. Grantee acknowledges that there may be adverse tax consequences upon vesting of the Award or disposition of the shares of Common Stock acquired upon vesting of the Award and that Grantee should consult a tax adviser prior to such exercise or disposition.

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EX-10.3

EXHIBIT 10.3

QLOGIC CORPORATION

2014 NEW-HIRE PERFORMANCE INCENTIVE PLAN

TERMS AND CONDITIONS OF PERFORMANCE SHARES

1. General.

Subject to these Terms and Conditions of Performance Shares (these “Terms”) and the QLogic Corporation 2014 New-Hire Performance Incentive Plan (including any applicable sub-plan, the “Plan”), QLogic Corporation (including its Subsidiaries, the “Corporation”) has granted to the Grantee (as defined below) a credit of performance shares under the Plan (the “Performance Share Award” or “Award”) with respect to the number of performance shares provided in the Notice of Grant Agreement (“Grant Notice”) corresponding to that particular Award grant (subject to adjustment as provided in Section 7.1 of the Plan and to adjustment based on the level of achievement under, and as specified in, the Performance Objectives) (the “Performance Shares”). As used herein, the term “performance shares” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Corporation’s Common Stock (subject to adjustment as provided in Section 7.1 of the Plan) solely for purposes of the Plan and these Terms. The recipient of the Award identified in the Grant Notice is referred to as the “Grantee.” The effective date of grant of the Award as set forth on the Grants tab on the UBS OneSource website (https://onesource.ubs.com/qlgc) is referred to as the “Award Date.” Capitalized terms are defined in the Plan if not defined herein. The Award has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee. The Performance Shares shall be used solely as a device for the determination of the payment to eventually be made to the Grantee if such Performance Shares vest pursuant to Section 2. The Performance Shares shall not be treated as property or as a trust fund of any kind.

The Grant Notice and these Terms are collectively referred to as the “Performance Share Award Agreement” applicable to the Performance Shares, or this “Performance Share Award Agreement.”

2. Vesting.

Subject to adjustment under Section 7.1 of the Plan and further subject to early termination under Section 6 of these Terms, the Award shall vest and become non-forfeitable as follows: (i) no portion of the Performance Share Award shall be earned or vest until the Compensation Committee of the Board of Directors (“Compensation Committee”) has approved a calculation of the level of achievement for each of the performance objectives (the “Performance Objectives”) for the applicable measurement period, (ii) once the Compensation Committee has approved the level of achievement under each of the Performance Objectives, the Compensation Committee shall approve the related number of Performance Shares earned by the Grantee based on that level of achievement, and (iii) [Remaining Vesting terms to be determined at time of grant]. The Performance Objectives approved by the Compensation Committee and the weighting assigned to each objective shall be separately communicated to the Grantee after they are established by the Compensation Committee.

3. Continuance of Employment/Service Required; No Employment/Service Commitment.

The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Performance Share Award Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 6 below or under the Plan.

Nothing contained in this Performance Share Award Agreement or the Plan constitutes a continued employment or service commitment by the Corporation, affects the Grantee’s status, if he or she is an employee, as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation, interferes in any way with the right of the Corporation at any time to terminate such employment or service, or affects the right of the Corporation to increase or decrease the Grantee’s other compensation. In jurisdictions that do not recognize an at will employment relationship, the prior sentence is subject to Grantee’s contract of employment and applicable law.

4. No Stockholder Rights.

The Grantee shall have no rights as a stockholder of the Corporation, no dividend rights and no voting rights with respect to the Performance Shares and any shares of Common Stock underlying or issuable in respect of such Performance Shares until such shares of Common Stock are actually issued to and held of record by the Grantee. No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate.

5. Crediting of Vested Performance Shares; Tax Withholding.

5.1 Crediting of Vested Performance Shares.

On or as soon as administratively practical following each vesting of the applicable portion of the Award pursuant to Section 2 (and in all events not later than two and one-half months after the vesting date), the Corporation shall deliver to the Grantee a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion) equal to the number of Performance Shares subject to this Award that vest on the applicable vesting date, unless such Performance Shares terminate prior to the given vesting date pursuant to Section 6. The Corporation’s obligation to deliver or credit shares of Common Stock with respect to vested Performance Shares is subject to the condition precedent that the Grantee or other person entitled under the Plan to receive any shares with respect to the vested Performance Shares (a) deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan and (b) make arrangements satisfactory to the Corporation to pay or otherwise satisfy the tax withholding requirements with respect to the vested Performance Shares. The Grantee shall have no further rights with respect to any Performance Shares that are paid or that terminate pursuant to Section 6.

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The Corporation has established a web – based system for managing Performance Share Awards. Currently, UBS Financial Services, Inc. (“UBS”) manages Performance Share Awards. In the event that the Grantee wishes to sell shares of Common Stock granted pursuant to a vested Performance Share Award, the Grantee must contact UBS either by logging on to the UBS OneSource website (https://onesource.ubs.com/qlgc) or by calling the UBS Call Center at 1-866-756-4421. UBS will request from the Grantee information regarding the Common Stock to be sold and the order type.

5.2 Responsibility for Taxes. The ultimate liability for any and all tax, social insurance and payroll tax withholding legally payable by an employee under applicable law (including without limitation laws of foreign jurisdictions) (“Tax-Related Items”) is and remains Grantee’s responsibility and liability and the Corporation (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant or vesting of the Award and the subsequent sale of the shares of Common Stock subject to the Award; and (b) does not commit to structure the terms of the grant or any aspect of the Award to reduce or eliminate Grantee’s liability for Tax-Related Items.

Upon the granting of the Performance Share Award or the vesting or payment of shares of the Common Stock in respect of Performance Share Award or any other event in respect of the Performance Share Award that triggers withholding obligations of the Corporation or its Subsidiaries, the Corporation shall have the right at its option to (a) require the Grantee to pay or provide for payment in cash of the amount of any taxes that the Corporation may be required to withhold with respect to such withholding event, or (b) deduct from any amount payable to the Grantee the amount of any taxes which the Corporation may be required to withhold with respect to such withholding event. In any case where a tax is required to be withheld in connection with the Performance Share Award or the delivery of shares of Common Stock under this Performance Share Award Agreement, the Administrator may, in its sole discretion, direct the Corporation to reduce the number of shares subject to the Performance Share Award or shares to be delivered pursuant to such Award by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy such withholding obligation at the minimum applicable withholding rates. Alternatively, or in addition, if permissible under local law, the Corporation may sell or arrange for the sale of shares of Common Stock that Grantee is due to acquire to meet the minimum withholding obligations for Tax-Related Items. Finally, Grantee shall pay to the Corporation any amount of any Tax-Related Items that the Corporation may be required to withhold in connection with the Award that cannot be satisfied by the means previously described.

6. Early Termination of Employment/Service.

The Grantee’s Performance Shares shall terminate to the extent such units have not become vested prior to the first date the Grantee is no longer employed by or providing services to the Corporation or one of its Subsidiaries, regardless of the reason for the termination of the Grantee’s employment or service with the Corporation or such Subsidiary, whether with or

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without cause, voluntarily or involuntarily. If the Grantee is employed by or in service to a Subsidiary and that entity ceases to be a Subsidiary, such event shall be deemed to be a termination of employment or service of the Grantee for purposes of this Agreement, unless the Grantee otherwise continues to be employed by or in service to the Corporation or another of its Subsidiaries following such event. If any unvested Performance Shares are terminated hereunder, such Performance Shares shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Grantee, or the Grantee’s beneficiary or personal representative, as the case may be. The Administrator shall be the sole judge of whether the Grantee continues to render employment or services for purposes of this Performance Share Award Agreement; provided, that the employment or service relationship shall not be considered terminated in the case of any statutory leave.

7. Restrictions on Transfer.

Subject to applicable law, neither the Performance Share Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.

8. Adjustment.

Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator shall make adjustments if appropriate in the number of Performance Shares then outstanding and the number and kind of securities that may be issued in respect of the Performance Share Award.

9. Data Privacy Consent.

Grantee explicitly and unambiguously consents to the collection, use, transfer and processing, in electronic or other form, of Grantee’s personal data as described in this document by and among, as applicable, the Corporation or its affiliates (or their agents) for the exclusive purpose of implementing, administering and managing Grantee’s participation in the Plan.

Grantee further understands that the Corporation or its affiliates (or their agents) hold certain personal information about Grantee, including, but not limited to, Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock held in the Corporation and details of all Awards or other entitlements to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Grantee’s country, or elsewhere, and that the recipient’s country may not have the same level of data privacy laws and protections as Grantee’s country. Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Grantee’s

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participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Grantee may elect to deposit any shares of Common Stock acquired upon vesting of the Award. Grantee understands that Data will be held only as long as is necessary to implement, administer and manage Grantee’s participation in the Plan. Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or withdraw the consents herein by contacting the Corporation’s human resources department. Grantee understands that withdrawal of consent may affect Grantee’s ability to exercise or realize benefits from the Award.

10. Nature of Grant.

In accepting the grant of the Award, Grantee acknowledges that: (i) the Plan is established voluntarily by the Corporation, it is discretionary in nature and it may be modified, suspended or terminated by the Corporation at any time, as provided in the Plan and these Terms; (ii) the grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of performance shares, or benefits in lieu of performance shares even if performance shares have been granted repeatedly in the past; (iii) all decisions with respect to future grants will be at the sole discretion of the Corporation; (iv) Grantee’s participation in the Plan shall not create a right to further employment or service and shall not interfere with the ability of the Corporation to terminate Grantee’s employment or service relationship at any time with or without cause (subject to Grantee’s contract of employment or service, if one exists, and applicable law); (v) Grantee’s participation in the Plan is voluntary; (vi) in the event that Grantee is not an employee of the Corporation, the Award grant will not be interpreted to form an employment contract or relationship with the Corporation, and furthermore, the Award grant will not be interpreted to form an employment contract with the Corporation and any of its affiliates; (vii) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty; (viii) if Grantee vests in his or her Award and shares of Common Stock are no longer restricted, the value of those shares of Common Stock acquired upon vesting may increase or decrease in value, even below the price at which such Award was originally granted; and (ix) no claim or entitlement to compensation or damages arises from termination of the Award or diminution in value of the Award or shares of Common Stock acquired pursuant to the Award whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or employment or otherwise howsoever. Grantee irrevocably releases the Corporation and its affiliates from any such claim that may arise and Grantee shall not be entitled to any compensation or damages whatsoever or however described by reason of any termination, withdrawal or alteration of rights or expectations under the Plan.

11. Clawback Policy.

Notwithstanding anything else contained herein or in the Plan to the contrary, but subject to applicable law, this Performance Share Agreement is subject to the Company’s clawback policy, as well as the “clawback” provisions of applicable law, rules and regulations, as each may be adopted and in effect from time to time (collectively, the “Clawback Policy”). The provisions of the Clawback Policy are in addition to (and not in lieu of) any rights to repayment the Company may have under Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable laws.

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12. Notices.

Any notice to be given under the terms of this Performance Share Award Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the address last reflected on the Corporation’s payroll records or at Grantee’s place of work, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or by pre-paid post/mail shall be enclosed in a properly sealed envelope addressed as aforesaid. Any such notice shall be given only when received, but if the Grantee is no longer employed by or in service to the Corporation, shall be deemed to have been duly given five business days after the date posted/mailed in accordance with the foregoing provisions of this Section 12.

13. Plan.

The Award and all rights of the Grantee under this Performance Share Award Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of the Plan and this Performance Share Award Agreement. The Grantee acknowledges having read and understanding the Plan and this Performance Share Award Agreement. Unless otherwise expressly provided in other sections of this Performance Share Award Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

14. Entire Agreement.

This Performance Share Award Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Performance Share Award Agreement may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

15. Governing Law.

This Performance Share Award Agreement shall be governed by and construed and enforced and executed in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder.

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16. Effect of this Agreement.

Subject to the Corporation’s right to terminate the Award pursuant to Section 7.2 of the Plan, this Performance Share Award Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Corporation.

17. Limitation on Grantee’s Rights.

Participation in the Plan confers no rights or interests other than as herein provided. This Performance Share Award Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. The Grantee shall have only the rights of a general unsecured creditor of the Corporation with respect to amounts credited and benefits payable, if any, with respect to the Performance Shares, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to Performance Shares, as and when payable hereunder.

18. Section Headings.

The section headings of this Performance Share Award Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

19. Construction.

It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code. The Performance Share Award Agreement shall be construed and interpreted consistent with that intent.

20. Acceptance.

In accepting the grant of the Award, Grantee acknowledges receipt of a copy of the Plan, the Grant Notice and these Terms. Grantee has read and understands the terms and provisions thereof, and has accepted the Award subject to all terms and conditions of the Plan, the Grant Notice and these Terms. Grantee acknowledges that there may be adverse tax consequences upon vesting of the Award or disposition of the shares of Common Stock acquired upon vesting of the Award and that Grantee should consult a tax adviser prior to such exercise or disposition.

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EX-31.1

EXHIBIT 31.1

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,

as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Prasad L. Rampalli, certify that:

1. I have reviewed this quarterly report on Form 10-Q of QLogic Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ PRASAD L. RAMPALLI
	Prasad L. Rampalli
	Chief Executive Officer

Date: February 5, 2015

EX-31.2

EXHIBIT 31.2

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,

as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jean Hu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of QLogic Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ JEAN HU
	Jean Hu
	Chief Financial Officer

Date: February 5, 2015

EX-32

EXHIBIT 32

Certification pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934,

as amended, and 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Each of the undersigned, the Chief Executive Officer and Chief Financial Officer of QLogic Corporation (the “Company”), hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended December 28, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ PRASAD L. RAMPALLI

Prasad L. Rampalli

Chief Executive Officer

/s/ JEAN HU

Jean Hu

Chief Financial Officer

Dated: February 5, 2015

The foregoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, except to the extent that the Company specifically incorporates it by reference and regardless of any general incorporation language in such filing.

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Special Charges - Summary of Special Charges (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Restructuring and Related Activities [Abstract]
Exit costs	$ 69	$ 1,947	$ 3,361	$ 15,900
Asset impairments			1,011	2,429
Other charges			500
Special charges	$ 69	$ 1,947	$ 4,872	$ 18,329

XML

Fair Value of Financial Instruments - Schedule of Assets Measured at Fair Value on a Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 192,424	$ 186,783
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	95,508	91,258
Marketable securities	192,424	186,783
Total assets at fair value disclosure	287,932	278,041
Fair Value Measurements Using, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	95,508	91,258
Marketable securities	44,035	49,198
Total assets at fair value disclosure	139,543	140,456
Fair Value Measurements Using, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	148,389	137,585
Total assets at fair value disclosure	148,389	137,585
U.S. Government and Agency Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	44,035	49,198
U.S. Government and Agency Securities [Member] | Fair Value Measurements Using, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	44,035	49,198
Corporate Debt Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	89,607	74,514
Corporate Debt Obligations [Member] | Fair Value Measurements Using, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	89,607	74,514
Mortgage-Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	30,633	32,782
Mortgage-Backed Securities [Member] | Fair Value Measurements Using, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	30,633	32,782
Other Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	7,938	5,176
Other Debt Securities [Member] | Fair Value Measurements Using, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	7,938	5,176
Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	20,211	25,113
Municipal Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	20,211	25,113
Municipal Bonds [Member] | Fair Value Measurements Using, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 20,211	$ 25,113

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Special Charges (Tables)

9 Months Ended

Dec. 28, 2014

Summary of Special Charges

A summary of the special charges recorded during the three and nine months ended December 28, 2014 and December 29, 2013, respectively, is as follows:

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands)
Exit costs	$	69	$	1,947	$	3,361	$	15,900
Asset impairments		—		—		1,011		2,429
Other charges		—		—		500		—
	$	69	$	1,947	$	4,872	$	18,329

March 2014 Initiative [Member]

Activity and Liability Balances for Exit Costs

Activity and liability balances for exit costs related to the March 2014 Initiative are as follows:

	Workforce Reduction			Contract Cancellation and Other			Total
	(In thousands)
Balance as of March 30, 2014	$	3,177		$	4,311		$	7,488
Charged to costs and expenses		2,693			(73	)		2,620
Payments		(5,870	)		(4,238	)		(10,108	)
Balance as of December 28, 2014	$	—		$	—		$	—

June 2013 Initiative [Member]

Activity and Liability Balances for Exit Costs

Activity and liability balances for exit costs related to the June 2013 Initiative are as follows:

	Workforce Reduction			Facilities and Other			Total
	(In thousands)
Balance as of March 30, 2014	$	3,528		$	4,621		$	8,149
Charged to costs and expenses		741			—			741
Payments		(1,798	)		(837	)		(2,635	)
Balance as of December 28, 2014	$	2,471		$	3,784		$	6,255

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Income Taxes [Line Items]
Provision for income taxes	$ 996,000	$ 686,000	$ 3,341,000	$ 3,668,000
Retroactive reinstatement of the federal research tax credit	$ 3,700,000		$ 3,700,000
Internal Revenue Service [Member] | Tax Year 2010 [Member]
Income Taxes [Line Items]
Income tax examination, year under examination			2010
Internal Revenue Service [Member] | Tax Year 2011 [Member]
Income Taxes [Line Items]
Income tax examination, year under examination			2011
Internal Revenue Service [Member] | Tax Year 2012 [Member]
Income Taxes [Line Items]
Income tax examination, year under examination			2012

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	9 Months Ended
	Dec. 28, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Restricted stock units granted, shares	2.2
Weighted average grant date fair value per share, restricted stock units granted	$ 10.26

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Marketable Securities

9 Months Ended

Dec. 28, 2014

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

Note 3. Marketable Securities

The Company’s portfolio of available-for-sale marketable securities consists of the following:

	Amortized   Cost		Gross   Unrealized   Gains		Gross   Unrealized   Losses			Estimated   Fair Value
	(In thousands)
December 28, 2014
U.S. government and agency securities	$	44,077	$	11	$	(53	)	$	44,035
Corporate debt obligations		89,843		51		(287	)		89,607
Mortgage-backed securities		30,573		155		(95	)		30,633
Municipal bonds		20,163		68		(20	)		20,211
Other debt securities		7,951		1		(14	)		7,938
	$	192,607	$	286	$	(469	)	$	192,424
March 30, 2014
U.S. government and agency securities	$	49,237	$	16	$	(55	)	$	49,198
Corporate debt obligations		74,386		200		(72	)		74,514
Mortgage-backed securities		32,778		191		(187	)		32,782
Municipal bonds		24,989		133		(9	)		25,113
Other debt securities		5,178		3		(5	)		5,176
	$	186,568	$	543	$	(328	)	$	186,783

The amortized cost and estimated fair value of debt securities as of December 28, 2014, by contractual maturity, are presented below. Expected maturities will differ from contractual maturities because the issuers of securities may have the right to repay obligations without prepayment penalties. Certain debt instruments, although possessing a contractual maturity greater than one year, are classified as short-term marketable securities based on their ability to be traded on active markets and availability for current operations.

	Amortized   Cost		Estimated   Fair Value
	(In thousands)
Due in one year or less	$	18,047	$	18,054
Due after one year through three years		144,154		143,896
Due after three years through five years		11,586		11,569
Due after five years		18,820		18,905
	$	192,607	$	192,424

The following table presents the Company’s marketable securities with unrealized losses by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 28, 2014 and March 30, 2014.

	Less Than 12 Months					12 Months or Greater					Total
Description of Securities	Fair     Value		Unrealized Losses			Fair     Value		Unrealized Losses			Fair     Value		Unrealized Losses
	(In thousands)
December 28, 2014
U.S. government and agency securities	$	31,711	$	(53	)	$	—	$	—		$	31,711	$	(53	)
Corporate debt obligations		65,215		(287	)		—		—			65,215		(287	)
Mortgage-backed securities		7,554		(29	)		6,088		(66	)		13,642		(95	)
Municipal bonds		6,111		(20	)		—		—			6,111		(20	)
Other debt securities		6,062		(14	)		—		—			6,062		(14	)
	$	116,653	$	(403	)	$	6,088	$	(66	)	$	122,741	$	(469	)
March 30, 2014
U.S. government and agency securities	$	26,879	$	(55	)	$	—	$	—		$	26,879	$	(55	)
Corporate debt obligations		19,906		(72	)		—		—			19,906		(72	)
Mortgage-backed securities		11,261		(145	)		2,838		(42	)		14,099		(187	)
Municipal bonds		3,322		(9	)		—		—			3,322		(9	)
Other debt securities		2,955		(5	)		—		—			2,955		(5	)
	$	64,323	$	(286	)	$	2,838	$	(42	)	$	67,161	$	(328	)

As of December 28, 2014 and March 30, 2014, the fair value of certain of the Company’s available-for-sale securities was less than their cost basis. Management reviewed various factors in determining whether to recognize an impairment charge related to these unrealized losses, including the current financial and credit market environment, the financial condition and near-term prospects of the issuer of the security, the magnitude of the unrealized loss compared to the cost of the investment, the length of time the investment had been in a loss position and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery of market value. As of December 28, 2014 and March 30, 2014, the Company determined that the unrealized losses were temporary in nature and recorded them as a component of accumulated other comprehensive income.

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Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Earnings Per Share [Abstract]
Net income	$ 22,435	$ 20,586	$ 39,445	$ 28,513
Shares:
Weighted-average shares outstanding - basic	87,728	86,855	87,679	87,810
Dilutive potential common shares, using treasury stock method	799	331	615	399
Weighted-average shares outstanding - diluted	88,527	87,186	88,294	88,209
Net income per share:
Basic	$ 0.26	$ 0.24	$ 0.45	$ 0.32
Diluted	$ 0.25	$ 0.24	$ 0.45	$ 0.32

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Business Acquisition - Summary of Identifiable Intangible Assets Acquired and Estimated Useful Lives (Detail) (Broadcom 10/40/100Gb Ethernet Business [Member], USD $) In Thousands, unless otherwise specified	1 Months Ended
	Mar. 30, 2014
Business Acquisition [Line Items]
Total	$ 85,360
Nonrecurring [Member] | Level 3 [Member]
Business Acquisition [Line Items]
In-process research and development	21,200
Total	85,360
Developed Technology [Member] | Nonrecurring [Member] | Level 3 [Member]
Business Acquisition [Line Items]
Identifiable intangible Assets, Weighted Average Useful Lives (Years)	5 years
Intangible Assets	58,760
Customer Relationships [Member] | Nonrecurring [Member] | Level 3 [Member]
Business Acquisition [Line Items]
Identifiable intangible Assets, Weighted Average Useful Lives (Years)	8 years
Intangible Assets	$ 5,400

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Business Acquisition - Summary of Final Purchase Price Allocation (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Business Acquisition [Line Items]
Goodwill	$ 167,232	$ 167,232
Broadcom 10/40/100Gb Ethernet Business [Member]
Business Acquisition [Line Items]
Inventories		2,880
Other current assets		307
Property and equipment		4,070
Goodwill		56,256
Identifiable intangible assets		85,360
Accrued compensation		(987)
Other current liabilities		(129)
Total purchase price		$ 147,757

XML

Net Income Per Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Earnings Per Share [Abstract]
Stock-based awards excluded from the diluted per share calculations	8.9	12.1	10.7	14.8

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Marketable Securities - Schedule of Available-for-Sale Securities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	$ 192,607	$ 186,568
Available-for-sale securities, Gross Unrealized Gains	286	543
Available-for-sale securities, Gross Unrealized Losses	(469)	(328)
Available-for-sale securities, Estimated Fair Value	192,424	186,783
U.S. Government and Agency Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	44,077	49,237
Available-for-sale securities, Gross Unrealized Gains	11	16
Available-for-sale securities, Gross Unrealized Losses	(53)	(55)
Available-for-sale securities, Estimated Fair Value	44,035	49,198
Corporate Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	89,843	74,386
Available-for-sale securities, Gross Unrealized Gains	51	200
Available-for-sale securities, Gross Unrealized Losses	(287)	(72)
Available-for-sale securities, Estimated Fair Value	89,607	74,514
Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	30,573	32,778
Available-for-sale securities, Gross Unrealized Gains	155	191
Available-for-sale securities, Gross Unrealized Losses	(95)	(187)
Available-for-sale securities, Estimated Fair Value	30,633	32,782
Other Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	7,951	5,178
Available-for-sale securities, Gross Unrealized Gains	1	3
Available-for-sale securities, Gross Unrealized Losses	(14)	(5)
Available-for-sale securities, Estimated Fair Value	7,938	5,176
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	20,163	24,989
Available-for-sale securities, Gross Unrealized Gains	68	133
Available-for-sale securities, Gross Unrealized Losses	(20)	(9)
Available-for-sale securities, Estimated Fair Value	$ 20,211	$ 25,113

XML

Marketable Securities - Schedule of Amortized Cost and Estimated Fair Value of Debt Securities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Due in one year or less, Amortized Cost	$ 18,047
Due after one year through three years, Amortized Cost	144,154
Due after three years through five years, Amortized Cost	11,586
Due after five years, Amortized Cost	18,820
Available-for-sale securities, Amortized Cost	192,607	186,568
Due in one year or less, Estimated Fair Value	18,054
Due after one year through three years, Estimated Fair Value	143,896
Due after three years through five years, Estimated Fair Value	11,569
Due after five years, Estimated Fair Value	18,905
Total estimated fair value of debt securities	$ 192,424	$ 186,783

XML

Business Acquisition

9 Months Ended

Dec. 28, 2014

Business Combinations [Abstract]

Business Acquisition

Note 2. Business Acquisition

Broadcom Corporation

In March 2014, the Company acquired certain 10/40/100Gb Ethernet controller-related assets from Broadcom Corporation (Broadcom) primarily relating to the NetXtreme^® II Ethernet controller family and licensed certain related intellectual property under non-exclusive licenses for total cash consideration of $147.8 million and the assumption of certain liabilities.

In the fourth quarter of fiscal 2014, the Company preliminarily estimated the fair value of the assets acquired and liabilities assumed and allocated a portion of the total purchase consideration to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date. Subsequently, the Company completed the identification and valuation of certain acquired property and equipment and also completed the transfer of property and equipment in a foreign jurisdiction that was subject to local compliance requirements, resulting in a total increase in property and equipment of $1.6 million with a corresponding decrease in goodwill. During the three months ended December 28, 2014, the Company completed the final assessment of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, including the fair value measurement of developed technology, in-process research and development (IPR&D) and customer relationship intangible assets, resulting in an increase in identifiable intangible assets acquired of $25.3 million with a corresponding decrease in goodwill. The Company’s condensed consolidated balance sheet as of March 30, 2014 has been revised to retroactively reflect the final allocation of the purchase price. The excess of the total purchase consideration over the aggregate estimated fair value of the net assets acquired was recorded as goodwill. The goodwill associated with this acquisition is expected to be tax deductible. The following table summarizes the final allocation of the purchase price to the fair value of the assets acquired and liabilities assumed:

	(In thousands)
Inventories	$	2,880
Other current assets		307
Property and equipment		4,070
Goodwill		56,256
Identifiable intangible assets		85,360
Accrued compensation		(987	)
Other current liabilities		(129	)
	$	147,757

A summary of the identifiable intangible assets acquired as part of the acquisition and their respective estimated useful lives is as follows:

	Weighted Average   Useful Lives		Amount
	(Years)		(In thousands)
Identifiable Intangible Assets:
Developed technology		5	$	58,760
In-process research and development		N/A		21,200
Customer relationships		8		5,400
			$	85,360

The Company believes the amounts recorded as developed technology, IPR&D and customer relationships represent the fair value of these identifiable intangible assets as of the acquisition date. These assets are measured at fair value on a nonrecurring basis and are categorized as Level 3 due to the use of significant unobservable inputs in the valuation.

The fair values of the identifiable intangible assets related to this acquisition were determined using the income approach. Under the income approach, expected future cash flows are estimated and discounted to their net present value at an appropriate risk-adjusted rate of return. Significant factors considered in the calculation of the rate of return are the weighted average cost of capital and the return on assets. For technology-related intangible assets, such as developed technology and IPR&D, additional factors considered include the risks inherent in the development process, the likelihood of achieving technological success and market acceptance. For IPR&D, the project is further analyzed to determine the unique technological innovations, the reliance on developed technology, if any, the existence of any alternative future use or current technological feasibility, and the complexity, cost and time to complete the remaining development. Future cash flows related to these identifiable intangible assets were estimated based on forecasted revenue and costs, taking into consideration expected product life cycles, market penetration and growth rates. The Company used risk adjusted discount rates of between 14.5% and 17.0% to discount the expected future cash flows under the income approach.

IPR&D is capitalized and accounted for as an indefinite-lived intangible asset. Once completed, IPR&D assets are reclassified to developed technology and amortized over their estimated useful lives. The IPR&D project acquired by the Company in March 2014 is related to next generation 40/100Gb Ethernet products. As of the acquisition date, the Company estimated that the project was 40% complete, had an estimated remaining cost to complete of $6 million and an estimated remaining time to complete of two years.

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Marketable Securities - Schedule of Unrealized Losses by Investment Category (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Less Than 12 Months	$ 116,653	$ 64,323
Unrealized Losses of Less Than 12 Months	(403)	(286)
Fair Value of 12 Months or Greater	6,088	2,838
Unrealized Losses of 12 Months or Greater	(66)	(42)
Fair Value, Total	122,741	67,161
Unrealized Losses, Total	(469)	(328)
U.S. Government and Agency Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Less Than 12 Months	31,711	26,879
Unrealized Losses of Less Than 12 Months	(53)	(55)
Fair Value, Total	31,711	26,879
Unrealized Losses, Total	(53)	(55)
Corporate Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Less Than 12 Months	65,215	19,906
Unrealized Losses of Less Than 12 Months	(287)	(72)
Fair Value, Total	65,215	19,906
Unrealized Losses, Total	(287)	(72)
Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Less Than 12 Months	7,554	11,261
Unrealized Losses of Less Than 12 Months	(29)	(145)
Fair Value of 12 Months or Greater	6,088	2,838
Unrealized Losses of 12 Months or Greater	(66)	(42)
Fair Value, Total	13,642	14,099
Unrealized Losses, Total	(95)	(187)
Other Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Less Than 12 Months	6,062	2,955
Unrealized Losses of Less Than 12 Months	(14)	(5)
Fair Value, Total	6,062	2,955
Unrealized Losses, Total	(14)	(5)
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value of Less Than 12 Months	6,111	3,322
Unrealized Losses of Less Than 12 Months	(20)	(9)
Fair Value, Total	6,111	3,322
Unrealized Losses, Total	$ (20)	$ (9)

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Special Charges - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Restructuring Cost and Reserve [Line Items]
Special charges	$ 69,000	$ 1,947,000	$ 4,872,000	$ 18,329,000
Exit costs	69,000	1,947,000	3,361,000	15,900,000
Asset impairment charges			1,011,000	2,429,000
Unpaid exit costs included in current liabilities	1,500,000		1,500,000
Unpaid exit costs included in other liabilities	4,800,000		4,800,000
March 2014 Initiative [Member]
Restructuring Cost and Reserve [Line Items]
Date the company commenced the restructuring plan			Mar. 17, 2014
Date the company completed the restructuring activities			Dec. 28, 2014
Special charges			3,600,000
Exit costs			2,620,000
Asset impairment charges			1,011,000
Aggregate amount of exit costs	11,700,000		11,700,000
March 2014 Initiative [Member] | Workforce Reductions [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs			2,693,000
Aggregate amount of exit costs	7,500,000		7,500,000
March 2014 Initiative [Member] | Contract Cancellation and Other [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs			(73,000)
Aggregate amount of exit costs	4,200,000		4,200,000
June 2013 Initiative [Member]
Restructuring Cost and Reserve [Line Items]
Date the company commenced the restructuring plan			Jun. 03, 2013
Special charges	100,000		700,000
Exit costs	100,000		741,000
Aggregate amount of exit costs	18,100,000		18,100,000
Additional severance costs	1,000,000		1,000,000
June 2013 Initiative [Member] | Workforce Reductions [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs			741,000
Aggregate amount of exit costs	14,600,000		14,600,000
June 2013 Initiative [Member] | Facilities and Other [Member]
Restructuring Cost and Reserve [Line Items]
Aggregate amount of exit costs	$ 3,500,000		$ 3,500,000

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Current assets:
Cash and cash equivalents	$ 95,508	$ 91,258
Marketable securities	192,424	186,783
Accounts receivable, less allowance for doubtful accounts of $1,583 and $1,186 as of December 28, 2014 and March 30, 2014, respectively	94,705	65,213
Inventories	30,939	18,036
Deferred tax assets	15,481	15,080
Other current assets	24,400	16,590
Total current assets	453,457	392,960
Property and equipment, net	74,841	86,527
Goodwill	167,232	167,232
Purchased intangible assets, net	82,091	95,163
Deferred tax assets	32,723	32,827
Other assets	21,157	23,554
Total assets	831,501	798,263
Current liabilities:
Accounts payable	38,804	30,657
Accrued compensation	19,455	26,956
Accrued taxes	3,511	981
Deferred revenue	3,469	3,954
Other current liabilities	5,999	16,123
Total current liabilities	71,238	78,671
Accrued taxes	15,166	17,095
Other liabilities	8,282	9,071
Total liabilities	94,686	104,837
Stockholders' equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 500,000,000 shares authorized; 214,979,000 and 213,786,000 shares issued as of December 28, 2014 and March 30, 2014, respectively	215	214
Additional paid-in capital	974,740	958,008
Retained earnings	1,711,516	1,672,071
Accumulated other comprehensive income (loss)	(520)	435
Treasury stock, at cost: 127,633,000 and 126,616,000 shares as of December 28, 2014 and March 30, 2014, respectively	(1,949,136)	(1,937,302)
Total stockholders' equity	736,815	693,426
Total liabilities and stockholders' equity	$ 831,501	$ 798,263

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013
Cash flows from operating activities:
Net income	$ 39,445	$ 28,513
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	35,511	23,620
Stock-based compensation	15,178	18,047
Deferred income taxes	(316)	(5,355)
Asset impairments	1,455	3,129
Other non-cash items	1,257	2,577
Changes in operating assets and liabilities:
Accounts receivable	(29,892)	(5,088)
Inventories	(12,903)	6,116
Other assets	1,236	537
Accounts payable	4,121	(1,919)
Accrued compensation	(7,501)	(2,719)
Accrued taxes, net	1,147	7,734
Other liabilities	(11,398)	2,841
Net cash provided by operating activities	37,340	78,033
Cash flows from investing activities:
Purchases of available-for-sale securities	(123,431)	(259,008)
Proceeds from sales and maturities of available-for-sale securities	116,260	261,253
Purchases of property and equipment	(15,420)	(21,043)
Net cash used in investing activities	(22,591)	(18,798)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock-based awards	5,144	6,756
Minimum tax withholding paid on behalf of employees for restricted stock units	(3,589)	(4,584)
Purchases of treasury stock	(11,834)	(47,785)
Other financing activities	(220)	(156)
Net cash used in financing activities	(10,499)	(45,769)
Net increase in cash and cash equivalents	4,250	13,466
Cash and cash equivalents at beginning of period	91,258	95,532
Cash and cash equivalents at end of period	$ 95,508	$ 108,998

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Purchased Intangible Assets - Components of Purchased Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Schedule of Acquired Finite and Indefinite Lived Intangible Assets by Major Class [Line Items]
In-process research and development, gross carrying value and net carrying value	$ 21,200	$ 21,200
Purchased intangible assets, gross carrying value	102,550	102,550
Purchased intangible assets, accumulated amortization	20,459	7,387
Purchased intangible assets, net carrying value	82,091	95,163
Developed Technology [Member]
Schedule of Acquired Finite and Indefinite Lived Intangible Assets by Major Class [Line Items]
Purchased finite-lived intangible assets, gross carrying value	72,121	72,121
Purchased intangible assets, accumulated amortization	17,323	4,957
Purchased finite-lived intangible assets, net carrying value	54,798	67,164
Customer Relationships [Member]
Schedule of Acquired Finite and Indefinite Lived Intangible Assets by Major Class [Line Items]
Purchased finite-lived intangible assets, gross carrying value	5,400	5,400
Purchased intangible assets, accumulated amortization	534
Purchased finite-lived intangible assets, net carrying value	4,866	5,400
Other [Member]
Schedule of Acquired Finite and Indefinite Lived Intangible Assets by Major Class [Line Items]
Purchased finite-lived intangible assets, gross carrying value	3,829	3,829
Purchased intangible assets, accumulated amortization	2,602	2,430
Purchased finite-lived intangible assets, net carrying value	$ 1,227	$ 1,399

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Inventories (Tables)

9 Months Ended

Dec. 28, 2014

Inventory Disclosure [Abstract]

Components of Inventories

Components of inventories are as follows:

	December 28, 2014		March 30,     2014
	(In thousands)
Raw materials	$	1,974	$	2,041
Finished goods		28,965		15,995
	$	30,939	$	18,036

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Treasury Stock - Additional information (Detail) (USD $)	1 Months Ended	9 Months Ended
	Oct. 27, 2014	Dec. 28, 2014	Mar. 30, 2014
Equity [Abstract]
Maximum value of outstanding common stock authorized for repurchase	$ 100,000,000
Outstanding common stock repurchase, maximum period	18 months
Purchase of common stock		1,000,000
Aggregate purchase price paid for common stock		11,800,000
Purchase of common stock under repurchase programs, shares		127,633,000	126,616,000
Treasury stock, at cost		$ 1,949,136,000	$ 1,937,302,000

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Stock-Based Compensation (Tables)

9 Months Ended

Dec. 28, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Stock-Based Compensation Expense

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

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands)
Cost of revenues	$	258	$	259	$	871	$	1,082
Engineering and development		2,243		2,462		7,523		9,070
Sales and marketing		1,182		1,251		3,265		4,274
General and administrative		1,220		1,086		3,519		3,621
	$	4,903	$	5,058	$	15,178	$	18,047

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Basis of Presentation

9 Months Ended

Dec. 28, 2014

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

In the opinion of management of QLogic Corporation (QLogic or the Company), the accompanying unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2014. The results of operations for the three and nine months ended December 28, 2014 are not necessarily indicative of the results that may be expected for the entire fiscal year. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. The Company evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment. Among the significant estimates affecting the consolidated financial statements are those related to revenue recognition, stock-based compensation, income taxes, marketable securities, inventories, goodwill and other intangible assets, and long-lived assets. The actual results experienced by the Company could differ materially from management’s estimates.

Recently Adopted Accounting Standards

In July 2013, the Financial Accounting Standards Board issued an accounting standard update that requires certain unrecognized tax benefits be presented as a reduction to deferred tax assets rather than as liabilities when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The Company adopted this standard in the first quarter of fiscal 2015 on a prospective basis and the adoption did not have a material effect on the Company’s condensed consolidated balance sheet.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 1,583	$ 1,186
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	214,979,000	213,786,000
Treasury stock, shares	127,633,000	126,616,000

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Net Income Per Share

9 Months Ended

Dec. 28, 2014

Earnings Per Share [Abstract]

Net Income Per Share

Note 11. Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands, except per share amounts)
Net income	$	22,435	$	20,586	$	39,445	$	28,513
Shares:
Weighted-average shares outstanding — basic		87,728		86,855		87,679		87,810
Dilutive potential common shares, using treasury stock method		799		331		615		399
Weighted-average shares outstanding — diluted		88,527		87,186		88,294		88,209
Net income per share:
Basic	$	0.26	$	0.24	$	0.45	$	0.32
Diluted	$	0.25	$	0.24	$	0.45	$	0.32

Stock-based awards, including stock options and restricted stock units, representing 8.9 million and 10.7 million shares of common stock have been excluded from the diluted per share calculations for the three and nine months ended December 28, 2014, respectively, and 12.1 million and 14.8 million shares of common stock have been excluded from the diluted per share calculations for the three and nine months ended December 29, 2013, respectively. These stock-based awards have been excluded from the diluted per share calculations because their effect would have been antidilutive.

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Document and Entity Information	9 Months Ended
	Dec. 28, 2014	Jan. 30, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 28, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	QLGC
Entity Registrant Name	QLOGIC CORP
Entity Central Index Key	0000918386
Current Fiscal Year End Date	--03-29
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		87,346,000

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Basis of Presentation (Policies)

9 Months Ended

Dec. 28, 2014

Accounting Policies [Abstract]

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In July 2013, the Financial Accounting Standards Board issued an accounting standard update that requires certain unrecognized tax benefits be presented as a reduction to deferred tax assets rather than as liabilities when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The Company adopted this standard in the first quarter of fiscal 2015 on a prospective basis and the adoption did not have a material effect on the Company’s condensed consolidated balance sheet.

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Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Income Statement [Abstract]
Net revenues	$ 140,203	$ 119,449	$ 387,155	$ 345,187
Cost of revenues	57,802	38,446	158,649	111,378
Gross profit	82,401	81,003	228,506	233,809
Operating expenses:
Engineering and development	34,802	35,235	108,103	110,412
Sales and marketing	16,153	16,113	47,640	51,957
General and administrative	7,677	7,406	25,274	22,698
Special charges	69	1,947	4,872	18,329
Total operating expenses	58,701	60,701	185,889	203,396
Operating income	23,700	20,302	42,617	30,413
Interest and other income (expense), net	(269)	970	169	1,768
Income before income taxes	23,431	21,272	42,786	32,181
Income taxes	996	686	3,341	3,668
Net income	$ 22,435	$ 20,586	$ 39,445	$ 28,513
Net income per share:
Basic	$ 0.26	$ 0.24	$ 0.45	$ 0.32
Diluted	$ 0.25	$ 0.24	$ 0.45	$ 0.32
Number of shares used in per share calculations:
Basic	87,728	86,855	87,679	87,810
Diluted	88,527	87,186	88,294	88,209

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Purchased Intangible Assets

9 Months Ended

Dec. 28, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Purchased Intangible Assets

Note 6. Purchased Intangible Assets

Purchased intangible assets consist of the following:

	December 28, 2014						March 30, 2014
	Gross   Carrying   Value		Accumulated Amortization		Net   Carrying   Value		Gross   Carrying   Value		Accumulated Amortization		Net   Carrying   Value
	(In thousands)
Developed technology	$	72,121	$	17,323	$	54,798	$	72,121	$	4,957	$	67,164
In-process research and development		21,200		—		21,200		21,200		—		21,200
Customer relationships		5,400		534		4,866		5,400		—		5,400
Other		3,829		2,602		1,227		3,829		2,430		1,399
	$	102,550	$	20,459	$	82,091	$	102,550	$	7,387	$	95,163

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Inventories

9 Months Ended

Dec. 28, 2014

Inventory Disclosure [Abstract]

Inventories

Note 5. Inventories

Components of inventories are as follows:

	December 28, 2014		March 30,     2014
	(In thousands)
Raw materials	$	1,974	$	2,041
Finished goods		28,965		15,995
	$	30,939	$	18,036

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Purchased Intangible Assets (Tables)

9 Months Ended

Dec. 28, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Components of Purchased Intangible Assets

Purchased intangible assets consist of the following:

	December 28, 2014						March 30, 2014
	Gross   Carrying   Value		Accumulated Amortization		Net   Carrying   Value		Gross   Carrying   Value		Accumulated Amortization		Net   Carrying   Value
	(In thousands)
Developed technology	$	72,121	$	17,323	$	54,798	$	72,121	$	4,957	$	67,164
In-process research and development		21,200		—		21,200		21,200		—		21,200
Customer relationships		5,400		534		4,866		5,400		—		5,400
Other		3,829		2,602		1,227		3,829		2,430		1,399
	$	102,550	$	20,459	$	82,091	$	102,550	$	7,387	$	95,163

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Business Acquisition (Tables)

9 Months Ended

Dec. 28, 2014

Business Combinations [Abstract]

Summary of Final Purchase Price Allocation

The following table summarizes the final allocation of the purchase price to the fair value of the assets acquired and liabilities assumed:

	(In thousands)
Inventories	$	2,880
Other current assets		307
Property and equipment		4,070
Goodwill		56,256
Identifiable intangible assets		85,360
Accrued compensation		(987	)
Other current liabilities		(129	)
	$	147,757

Summary of Identifiable Intangible Assets Acquired and Estimated Useful Lives

A summary of the identifiable intangible assets acquired as part of the acquisition and their respective estimated useful lives is as follows:

	Weighted Average   Useful Lives		Amount
	(Years)		(In thousands)
Identifiable Intangible Assets:
Developed technology		5	$	58,760
In-process research and development		N/A		21,200
Customer relationships		8		5,400
			$	85,360

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Special Charges

9 Months Ended

Dec. 28, 2014

Restructuring and Related Activities [Abstract]

Special Charges

Note 9. Special Charges

A summary of the special charges recorded during the three and nine months ended December 28, 2014 and December 29, 2013, respectively, is as follows:

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands)
Exit costs	$	69	$	1,947	$	3,361	$	15,900
Asset impairments		—		—		1,011		2,429
Other charges		—		—		500		—
	$	69	$	1,947	$	4,872	$	18,329

March 2014 Initiative

In March 2014, the Company commenced a restructuring plan (March 2014 Initiative) primarily designed to consolidate its Ethernet product roadmap following the acquisition of the Ethernet controller-related assets from Broadcom. This restructuring plan primarily included a workforce reduction and the consolidation and elimination of certain engineering activities. The Company completed these restructuring activities and all amounts were paid as of December 28, 2014.

During the nine months ended December 28, 2014, the Company recorded special charges of $3.6 million in connection with the March 2014 Initiative. Special charges for the nine months ended December 28, 2014 consisted of $2.6 million of exit costs and $1.0 million of asset impairment charges related to abandoned property and equipment. The exit costs consisted of severance and related costs associated with involuntarily terminated employees.

The aggregate amount of the exit costs recorded in connection with the March 2014 Initiative was $11.7 million and consisted of $7.5 million of workforce reduction costs and $4.2 million of contract cancellation and other costs.

Activity and liability balances for exit costs related to the March 2014 Initiative are as follows:

	Workforce Reduction			Contract Cancellation and Other			Total
	(In thousands)
Balance as of March 30, 2014	$	3,177		$	4,311		$	7,488
Charged to costs and expenses		2,693			(73	)		2,620
Payments		(5,870	)		(4,238	)		(10,108	)
Balance as of December 28, 2014	$	—		$	—		$	—

June 2013 Initiative

In June 2013, the Company commenced a restructuring plan (June 2013 Initiative) designed to enhance product focus and streamline business operations. The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, the Company ceased development of future application-specific integrated circuits (ASICs) for switch products.

During the three and nine months ended December 28, 2014, the Company recorded special charges of $0.1 million and $0.7 million in connection with the June 2013 Initiative, consisting of exit costs associated with severance and related costs for involuntarily terminated employees. Certain employees that were notified of their termination are required to provide future services for varying periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. The Company expects to incur approximately $1 million of additional severance costs in connection with these employees over the requisite service period.

The aggregate amount of the exit costs recorded in connection with the June 2013 Initiative is $18.1 million and consisted of $14.6 million of workforce reduction costs and $3.5 million of facilities and other costs.

Activity and liability balances for exit costs related to the June 2013 Initiative are as follows:

	Workforce Reduction			Facilities and Other			Total
	(In thousands)
Balance as of March 30, 2014	$	3,528		$	4,621		$	8,149
Charged to costs and expenses		741			—			741
Payments		(1,798	)		(837	)		(2,635	)
Balance as of December 28, 2014	$	2,471		$	3,784		$	6,255

The total unpaid exit costs are expected to be paid over the terms of the related agreements through fiscal 2018. As of December 28, 2014, unpaid exit costs totaling $1.5 million and $4.8 million are included in other current liabilities and other liabilities, respectively.

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Treasury Stock

9 Months Ended

Dec. 28, 2014

Equity [Abstract]

Treasury Stock

Note 7. Treasury Stock

Since fiscal 2003, the Company has had various stock repurchase programs that authorized the purchase of the Company’s outstanding common stock. In October 2014, the Company’s Board of Directors approved a program authorizing the repurchase of up to $100 million of the Company’s outstanding common stock over a period of up to 18 months. During the nine months ended December 28, 2014, the Company purchased 1.0 million shares of its common stock for an aggregate purchase price of $11.8 million. As of December 28, 2014, the Company had purchased a total of 127.6 million shares of common stock under these repurchase programs for an aggregate purchase price of $1.95 billion.

Repurchased shares have been recorded as treasury shares and will be held until the Company’s Board of Directors designates that these shares be retired or used for other purposes.

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Stock-Based Compensation

9 Months Ended

Dec. 28, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Note 8. Stock-Based Compensation

During the nine months ended December 28, 2014, the Company granted 2.2 million restricted stock units with a weighted average grant date fair value of $10.26 per share.

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

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands)
Cost of revenues	$	258	$	259	$	871	$	1,082
Engineering and development		2,243		2,462		7,523		9,070
Sales and marketing		1,182		1,251		3,265		4,274
General and administrative		1,220		1,086		3,519		3,621
	$	4,903	$	5,058	$	15,178	$	18,047

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Income Taxes

9 Months Ended

Dec. 28, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

The Company’s provision for income taxes was $1.0 million and $3.3 million for the three and nine months ended December 28, 2014, respectively, and $0.7 million and $3.7 million for the three and nine months ended December 29, 2013, respectively. Income tax expense for the three and nine months ended December 28, 2014 included a $3.7 million benefit related to the retroactive reinstatement of the federal research tax credit. Income tax expense for the three and nine months ended December 28, 2014 and December 29, 2013 was also impacted by the effect of a discrete tax related item associated with the difference between stock-based compensation expense and the deduction related to stock-based awards on income tax returns. The Company’s provision for income taxes is based on the estimated income for the year, the composition of the estimated income in different tax jurisdictions, and the tax effect, if any, in the applicable quarterly periods of newly enacted tax legislation, resolution of tax audits, changes in uncertain tax positions, and other discrete tax-related items. The allocation of taxable income to domestic and foreign tax jurisdictions impacts the effective tax rate, as the Company’s income tax rate in foreign jurisdictions is generally lower than its income tax rate in the United States.

The Company’s federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the Internal Revenue Service. Management does not believe that the results of this examination will have a material impact on the Company’s financial condition or results of operations.

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Inventories - Components of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2014	Mar. 30, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 1,974	$ 2,041
Finished goods	28,965	15,995
Total Inventory	$ 30,939	$ 18,036

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Dec. 28, 2014

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

A summary of the assets measured at fair value on a recurring basis as of December 28, 2014 and March 30, 2014 are as follows:

	Fair Value Measurements Using
	Level 1		Level 2		Total
	(In thousands)
December 28, 2014
Cash and cash equivalents	$	95,508	$	—	$	95,508
Marketable securities:
U.S. government and agency securities		44,035		—		44,035
Corporate debt obligations		—		89,607		89,607
Mortgage-backed securities		—		30,633		30,633
Municipal bonds		—		20,211		20,211
Other debt securities		—		7,938		7,938
		44,035		148,389		192,424
	$	139,543	$	148,389	$	287,932
March 30, 2014
Cash and cash equivalents	$	91,258	$	—	$	91,258
Marketable securities:
U.S. government and agency securities		49,198		—		49,198
Corporate debt obligations		—		74,514		74,514
Mortgage-backed securities		—		32,782		32,782
Municipal bonds		—		25,113		25,113
Other debt securities		—		5,176		5,176
		49,198		137,585		186,783
	$	140,456	$	137,585	$	278,041

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Net Income Per Share (Tables)

9 Months Ended

Dec. 28, 2014

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended				Nine Months Ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013
	(In thousands, except per share amounts)
Net income	$	22,435	$	20,586	$	39,445	$	28,513
Shares:
Weighted-average shares outstanding — basic		87,728		86,855		87,679		87,810
Dilutive potential common shares, using treasury stock method		799		331		615		399
Weighted-average shares outstanding — diluted		88,527		87,186		88,294		88,209
Net income per share:
Basic	$	0.26	$	0.24	$	0.45	$	0.32
Diluted	$	0.25	$	0.24	$	0.45	$	0.32

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Special Charges - Activity and Liability Balances for Exit Costs (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Restructuring Cost and Reserve [Line Items]
Charged to costs and expenses	$ 69	$ 1,947	$ 3,361	$ 15,900
March 2014 Initiative [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			7,488
Charged to costs and expenses			2,620
Payments			(10,108)
Ending Balance	0		0
March 2014 Initiative [Member] | Workforce Reductions [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			3,177
Charged to costs and expenses			2,693
Payments			(5,870)
Ending Balance	0		0
March 2014 Initiative [Member] | Contract Cancellation and Other [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			4,311
Charged to costs and expenses			(73)
Payments			(4,238)
Ending Balance	0		0
June 2013 Initiative [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			8,149
Charged to costs and expenses	100		741
Payments			(2,635)
Ending Balance	6,255		6,255
June 2013 Initiative [Member] | Workforce Reductions [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			3,528
Charged to costs and expenses			741
Payments			(1,798)
Ending Balance	2,471		2,471
June 2013 Initiative [Member] | Facilities and Other [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			4,621
Payments			(837)
Ending Balance	$ 3,784		$ 3,784

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 22,435	$ 20,586	$ 39,445	$ 28,513
Changes in fair value of marketable securities:
Changes in unrealized gains	(329)	(35)	(477)	(1,354)
Net realized losses (gains) reclassified into earnings	(3)	(84)	124	(343)
Total changes in fair value of marketable securities	(332)	(119)	(353)	(1,697)
Foreign currency translation adjustments	(391)	101	(602)	59
Total other comprehensive loss	(723)	(18)	(955)	(1,638)
Comprehensive income	$ 21,712	$ 20,568	$ 38,490	$ 26,875

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Fair Value of Financial Instruments

9 Months Ended

Dec. 28, 2014

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 4. Fair Value of Financial Instruments

The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts receivable and accounts payable. The carrying value of accounts receivable and accounts payable approximates fair value.

A summary of the assets measured at fair value on a recurring basis as of December 28, 2014 and March 30, 2014 are as follows:

	Fair Value Measurements Using
	Level 1		Level 2		Total
	(In thousands)
December 28, 2014
Cash and cash equivalents	$	95,508	$	—	$	95,508
Marketable securities:
U.S. government and agency securities		44,035		—		44,035
Corporate debt obligations		—		89,607		89,607
Mortgage-backed securities		—		30,633		30,633
Municipal bonds		—		20,211		20,211
Other debt securities		—		7,938		7,938
		44,035		148,389		192,424
	$	139,543	$	148,389	$	287,932
March 30, 2014
Cash and cash equivalents	$	91,258	$	—	$	91,258
Marketable securities:
U.S. government and agency securities		49,198		—		49,198
Corporate debt obligations		—		74,514		74,514
Mortgage-backed securities		—		32,782		32,782
Municipal bonds		—		25,113		25,113
Other debt securities		—		5,176		5,176
		49,198		137,585		186,783
	$	140,456	$	137,585	$	278,041

The Company’s investments classified within Level 2 were primarily valued based on valuations obtained from a third-party pricing service. To estimate fair value, the pricing service utilizes industry-standard valuation models, including both income and market-based approaches for which all significant inputs are observable either directly or indirectly. The Company obtained documentation from the pricing service as to the methodology and summary of inputs used for the various types of securities. The pricing service maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. These observable inputs include reported trades and broker/dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. The Company compares valuation information from the pricing service with other pricing sources to validate the reasonableness of the valuations.

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Business Acquisition - Additional Information (Detail) (Broadcom 10/40/100Gb Ethernet Business [Member], USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended
	Mar. 30, 2014	Dec. 28, 2014	Dec. 28, 2014
Business Acquisition [Line Items]
Business acquisition, cash consideration	$ 147.8
Business combination adjustment to property and equipment			1.6
Business combination adjustment to identifiable intangible assets		25.3	25.3
Estimated percentage of project complete	40.00%
Estimated remaining cost to complete project	6
Estimated remaining time to complete project	2 years
Property and Equipment [Member]
Business Acquisition [Line Items]
Business combination adjustment to goodwill			(1.6)
Identifiable Intangible Assets [Member]
Business Acquisition [Line Items]
Business combination adjustment to goodwill		$ (25.3)	$ (25.3)
Minimum [Member]
Business Acquisition [Line Items]
Risk adjusted discount rates	14.50%
Maximum [Member]
Business Acquisition [Line Items]
Risk adjusted discount rates	17.00%

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Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 28, 2014	Dec. 29, 2013	Dec. 28, 2014	Dec. 29, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 4,903	$ 5,058	$ 15,178	$ 18,047
Cost of Revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	258	259	871	1,082
Engineering and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,243	2,462	7,523	9,070
Sales and Marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,182	1,251	3,265	4,274
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,220	$ 1,086	$ 3,519	$ 3,621

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Marketable Securities (Tables)

9 Months Ended

Dec. 28, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-Sale Securities

The Company’s portfolio of available-for-sale marketable securities consists of the following:

	Amortized   Cost		Gross   Unrealized   Gains		Gross   Unrealized   Losses			Estimated   Fair Value
	(In thousands)
December 28, 2014
U.S. government and agency securities	$	44,077	$	11	$	(53	)	$	44,035
Corporate debt obligations		89,843		51		(287	)		89,607
Mortgage-backed securities		30,573		155		(95	)		30,633
Municipal bonds		20,163		68		(20	)		20,211
Other debt securities		7,951		1		(14	)		7,938
	$	192,607	$	286	$	(469	)	$	192,424
March 30, 2014
U.S. government and agency securities	$	49,237	$	16	$	(55	)	$	49,198
Corporate debt obligations		74,386		200		(72	)		74,514
Mortgage-backed securities		32,778		191		(187	)		32,782
Municipal bonds		24,989		133		(9	)		25,113
Other debt securities		5,178		3		(5	)		5,176
	$	186,568	$	543	$	(328	)	$	186,783

Schedule of Amortized Cost and Estimated Fair Value of Debt Securities

The amortized cost and estimated fair value of debt securities as of December 28, 2014, by contractual maturity, are presented below. Expected maturities will differ from contractual maturities because the issuers of securities may have the right to repay obligations without prepayment penalties. Certain debt instruments, although possessing a contractual maturity greater than one year, are classified as short-term marketable securities based on their ability to be traded on active markets and availability for current operations.

	Amortized   Cost		Estimated   Fair Value
	(In thousands)
Due in one year or less	$	18,047	$	18,054
Due after one year through three years		144,154		143,896
Due after three years through five years		11,586		11,569
Due after five years		18,820		18,905
	$	192,607	$	192,424

Schedule of Unrealized Losses by Investment Category

The following table presents the Company’s marketable securities with unrealized losses by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 28, 2014 and March 30, 2014.

	Less Than 12 Months					12 Months or Greater					Total
Description of Securities	Fair     Value		Unrealized Losses			Fair     Value		Unrealized Losses			Fair     Value		Unrealized Losses
	(In thousands)
December 28, 2014
U.S. government and agency securities	$	31,711	$	(53	)	$	—	$	—		$	31,711	$	(53	)
Corporate debt obligations		65,215		(287	)		—		—			65,215		(287	)
Mortgage-backed securities		7,554		(29	)		6,088		(66	)		13,642		(95	)
Municipal bonds		6,111		(20	)		—		—			6,111		(20	)
Other debt securities		6,062		(14	)		—		—			6,062		(14	)
	$	116,653	$	(403	)	$	6,088	$	(66	)	$	122,741	$	(469	)
March 30, 2014
U.S. government and agency securities	$	26,879	$	(55	)	$	—	$	—		$	26,879	$	(55	)
Corporate debt obligations		19,906		(72	)		—		—			19,906		(72	)
Mortgage-backed securities		11,261		(145	)		2,838		(42	)		14,099		(187	)
Municipal bonds		3,322		(9	)		—		—			3,322		(9	)
Other debt securities		2,955		(5	)		—		—			2,955		(5	)
	$	64,323	$	(286	)	$	2,838	$	(42	)	$	67,161	$	(328	)