| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amended and Restated 2017 Performance Incentive Plan
The Board of Directors (the “Board”) of Western Digital Corporation (the “Company”) previously adopted an amendment and restatement of the Western Digital Corporation Amended and Restated 2017 Performance Incentive Plan (the “2017 Plan”), subject to approval by the Company’s stockholders. As disclosed in Item 5.07 of this Form 8-K, the Company’s stockholders approved the amendment and restatement of the 2017 Plan on November 18, 2020. The amendment and restatement of the 2017 Plan increases the number of shares of the Company’s common stock available for award grants under the 2017 Plan by 9,800,000 shares, from 95,780,215 shares to a new maximum aggregate limit of 105,580,215 shares as of August 11, 2020.
The Board, one or more committees appointed by the Board, or an officer to whom the Board or a Board committee has delegated certain of its authority, administers the 2017 Plan. The Board has delegated general administrative authority for the 2017 Plan to the Compensation and Talent Committee of the Board, except the Board retains administrative authority with respect to awards granted to non-employee members of the Board. The administrator of the 2017 Plan has broad authority under the plan to, among other things, select participants and determine the type(s) of award(s) that they are to receive, and determine the number of shares that are to be subject to awards and the terms and conditions of awards, including the price (if any) to be paid for the shares or the award.
Persons eligible to receive awards under the 2017 Plan include officers or employees of the Company or any of its subsidiaries, members of the Board, and certain consultants and advisors to the Company or any of its subsidiaries.
The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2017 Plan, as amended and restated, equals:
| | (i) | 105,580,215 shares of the Company’s common stock, plus |
| | (ii) | the number of any shares of the Company’s common stock subject to stock options outstanding under the SanDisk Corporation 2013 Incentive Plan (which was assumed by the Company in May 2016 and is referred to herein as the “SanDisk Plan”) as of August 11, 2020 which expire, or for any reason are cancelled or terminated, after August 11, 2020 without being exercised, plus |
| | (iii) | 1.72 times the number of any shares of the Company’s common stock subject to restricted share unit awards outstanding and unvested under the SanDisk Plan as of August 11, 2020 which are forfeited, terminated, cancelled, or otherwise reacquired after August 11, 2020 without having become vested. |
As of August 11, 2020, a total of 14,216,265 shares of Company common stock were subject to outstanding awards granted under the 2017 Plan, a total of 14,969,913 shares of Company common stock were available for new award grants under the 2017 Plan (before giving effect to the 9.8 million share increase approved by the Company’s stockholders on November 18, 2020, but after taking into account shares previously issued or transferred pursuant to awards under the 2017 Plan as of August 11, 2020), 243,286 shares of Company common stock were subject to stock options outstanding under the SanDisk Plan and 181,930 shares of Company common stock were subject to outstanding and unvested restricted share unit awards under the SanDisk Plan. Shares issued in respect of any “full-value award” (generally, any award other than a stock option or stock appreciation right) granted under the 2017 Plan will continue to be counted against the share limit described above as 1.72 shares for every one share actually issued in connection with the award.
To the extent that an award is settled in cash or a form other than shares, the shares that would have been delivered had there been no such cash or other settlement will not be counted against the shares available for issuance under the 2017 Plan. In the event that shares are delivered in respect of a dividend equivalent right, only the actual number of shares delivered with respect to the award shall be counted against the share limits of the 2017 Plan. To the extent that shares are delivered pursuant to the exercise of a stock appreciation right or stock option, the number of underlying shares as to which the exercise relates shall be counted against the applicable share limits, as opposed to only counting the shares actually issued. Shares that are subject to or underlie awards granted under the 2018 Plan that are not paid or delivered (whether due to expiration, cancellation, termination, forfeiture, failure to vest or any other reason) will again be available for subsequent awards under our 2017 Plan. In addition, the 2017 Plan generally provides that shares issued in connection with awards that are granted by or become obligations of the Company through the assumption of awards (or in substitution for awards) in connection with an acquisition of
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