EXHIBIT 10.3
WESTERN DIGITAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
(AMENDED AND RESTATED AS OF NOVEMBER 14, 2002)
WESTERN DIGITAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
(AMENDED AND RESTATED AS OF NOVEMBER 14, 2002)
The Western Digital Corporation 1993 Employee Stock Purchase Plan (the
"Plan") shall be established and operated in accordance with the following terms
and provisions.
1. Definitions.
As used in the Plan the following terms shall have the meanings set
forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee appointed by the Board to
administer the Plan as described in Section 4 below.
(d) "Common Stock" means the common stock, $0.01 par value, of the
Company.
(e) "Company" means Western Digital Corporation, a Delaware
corporation.
(f) "Continuous Employment" means the absence of any interruption
or termination of service as an Employee with the Company and/or its
Participating Subsidiaries. Continuous Employment shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the
Company, provided that such leave is for a period of not more than 90 days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.
(g) "Eligible Compensation" means, with respect to each
Participant for each pay period, the full salary and wages paid to such
Participant by the Company or a Participating Subsidiary, including commissions,
bonuses (to the extent not excluded below), overtime pay and shift
differentials. Except as otherwise determined by the Committee, "Eligible
Compensation" does not include
(i) any amounts contributed by the Company or a
Participating Subsidiary to any pension plan or plan of deferred compensation,
(ii) any automobile or relocation allowances (or
reimbursement for any such expenses),
(iii) any amounts paid as a starting bonus or finder's
fee,
(iv) any amounts realized from the exercise of qualified
or non-qualified stock options, or
(v) any amounts paid by the Company or a Participating
Subsidiary for other fringe benefits, such as health and welfare,
hospitalization and group life insurance benefits, or perquisites, or paid in
lieu of such benefits, such as cash-out of credits generated under a plan
qualified under Code Section 125.
(h) "Eligible Employee" means an Employee who is
(i) customarily employed for at least twenty (20) hours
per week and more than five months in a calendar year, and
(ii) eligible to participate in the Plan as described in
Section 5 below.
If such person is (a) an Employee due to any classification or
reclassification of the person as an employee or common-law employee of the
Company or one of its Participating Subsidiaries by reason of action taken by
any tax or other governmental authority, or (b) an Employee who has a written
employment agreement providing that the Employee shall not participate in the
Plan until at least two (2) years of Continuous Employment, then such Employee
must be employed for at least two (2) years by the Company or one of its
Participating Subsidiaries as well as meet the criteria set forth above in
subsections (i) and (ii) in order to be an Eligible Employee.
(i) "Employee" means each person currently employed by the Company
or one of its Participating Subsidiaries. It shall not include any person who is
recorded on the books and records of the Company or one of its Participating
Subsidiaries as an independent contractor or consultant or a worker provided by
a temporary staffing agency.
(j) "Enrollment Date" means the first day of each Offering Period.
(k) "Exercise Date" means each July 31 and January 31 during each
Offering Period.
(l) "Exercise Period" means a period commencing on February 1 and
terminating on the following July 31 or commencing on August 1 and terminating
on the following January 31.
(m) "Exercise Price" means the price per share of shares offered
in a given Offering Period determined as provided in Section 10 below.
(n) "Fair Market Value" means, with respect to a share of Common
Stock as of any Enrollment Date or Exercise Date (or New Exercise Date, as the
case may be), the closing price of such Common Stock on the New York Stock
Exchange on such date, as reported in The Wall Street Journal. In the event that
such a closing price is not available for an Enrollment Date or an Exercise
Date, or New Exercise Date, the Fair Market Value of a share of Common Stock on
such date shall be the closing price of a share of the Common Stock on the New
York Stock Exchange on the last business day prior to such date or such other
amount as may be determined by the Committee by any fair and reasonable means.
(o) "New Exercise Date" means the new exercise date set by the
board in the case of a sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation or other
entity in certain circumstances as described in Section 15(b).
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(p) "Offering Period" means a period of twenty-four (24) months
during which an option granted pursuant to the Plan may be exercised. A new
Offering Period shall begin on each February 1 and August 1.
(q) "Participant" means an Eligible Employee who has elected to
participate in the Plan by filing an enrollment agreement with the Company as
provided in Section 7 below.
(r) "Participating Subsidiary" means any Subsidiary other than a
Subsidiary excluded from participation in the Plan by the Committee, in its sole
discretion.
(s) "Plan" means this Western Digital Corporation 1993 Employee
Stock Purchase Plan, as amended.
(t) "Subsidiary" means any corporation, domestic or foreign, of
which the Company owns, directly or indirectly, not less than 50% of the total
combined voting power of all classes of stock or other equity interests and that
otherwise qualifies as a "subsidiary corporation" within the meaning of Section
424(f) of the Code or any successor thereto.
2. Purpose of the Plan.
The purpose of the Plan is to provide an incentive for present and
future Employees of the Company and its Participating Subsidiaries to acquire a
proprietary interest (or increase an existing proprietary interest) in the
Company through the purchase of Common Stock. It is the intention of the Company
that the Plan qualify as an "employee stock purchase plan" under Section 423 of
the Code. Accordingly, the provisions of the Plan shall be administered,
interpreted and construed in a manner consistent with the requirements of that
section of the Code.
3. Shares Reserved for the Plan.
There shall be reserved for issuance and purchase by Participants under
the Plan an aggregate of 15,000,000 shares of Common Stock, subject to
adjustment as provided in Section 15 below. Shares of Common Stock subject to
the Plan may be newly issued shares or shares reacquired in private transactions
or open market purchases. If and to the extent that any right to purchase
reserved shares shall not be exercised by any Participant for any reason or if
such right to purchase shall terminate as provided herein, shares that have not
been so purchased hereunder shall again become available for the purposes of the
Plan unless the Plan shall have been terminated, but all shares sold under the
Plan, regardless of source, shall be counted against the limitation set forth
above.
4. Administration of the Plan.
(a) The Plan shall be administered by a Committee appointed by,
and which shall serve at the pleasure of, the Board. The Committee shall consist
of two or more directors, each of whom is a "Non-Employee Director" within the
meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended, as such rule may be amended from time to time. The Committee shall have
authority to interpret the Plan, to prescribe, amend and rescind rules
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and regulations relating to the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan, all of which actions
and determinations shall be final, conclusive and binding on all persons.
(b) The Committee may request advice or assistance or employ such
other persons as it in its absolute discretion deems necessary or appropriate
for the proper administration of the Plan, including, but not limited to
employing a brokerage firm, bank or other financial institution to assist in the
purchase of shares, delivery of reports or other administrative aspects of the
Plan.
5. Eligibility to Participate in the Plan.
Subject to limitations imposed by Section 423(b) of the Code, any
Eligible Employee who is employed by the Company or a Participating Subsidiary
on an Enrollment Date shall be eligible to participate in the Plan for the
Offering Period beginning on that Enrollment Date.
6. Offering Periods.
The Plan shall be implemented by consecutive Offering Periods with a
new Offering Period commencing on each February 1 and August 1 during the term
of the Plan. The first such Offering Period shall commence on February 1, 1994,
or as otherwise determined by the Committee. The Committee shall have the power
to change the duration of Offering Periods with respect to future offerings
without shareholder approval if such change is announced at least fifteen (15)
days prior to the scheduled beginning of the first Offering Period to be
affected.
7. Election to Participate in the Plan.
(a) Each Eligible Employee may elect to participate in the Plan by
completing an enrollment agreement in the form provided by the Company and
filing such enrollment agreement with the Company prior to the applicable
Enrollment Date, unless another time for filing the enrollment form is set by
the Committee for all Eligible Employees with respect to a given Offering
Period. An Eligible Employee may participate in an Offering Period only if, as
of the Enrollment Date of such Offering Period, such Eligible Employee is not
participating in any prior Offering Period which is continuing at the time of
such proposed enrollment.
(b) Payroll deductions for a Participant shall commence on the
first payroll date following the Enrollment Date and shall end on the last
payroll date in the Offering Period to which such authorization is applicable,
unless sooner terminated by the Participant as provided in Section 12.
(c) Unless a Participant elects otherwise prior to the Enrollment
Date of the immediately succeeding Offering Period, an Eligible Employee who is
participating in an Offering Period as of the last Exercise Date of such
Offering Period (the "Prior Offering Period") shall be deemed (i) to have
elected to participate in the immediately succeeding Offering Period and (ii) to
have authorized the same payroll deduction for such immediately succeeding
Offering Period as was in effect for such Participant immediately prior to the
expiration or termination of the Prior Offering Period.
(d) The Committee, in its discretion, may terminate the
participation of all
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Participants in any Offering Period as of the last day of any Exercise Period (a
"Termination Date") and enroll such Participants in the new Offering Period
commencing immediately following such Termination Date if the Exercise Price
determined as of the Enrollment Date for such new Offering Period is lower than
the Exercise Price determined as of the Enrollment Date of the Offering Period
for which the Participants' participation is being terminated. In such event,
each of such Participants shall be deemed for purposes of this Plan (i) to have
elected to participate in such new Offering Period, and (ii) to have authorized
the same payroll deduction for such new Offering Period as was in effect for
such Participant immediately prior to the Termination Date.
8. Payroll Deductions.
(a) All Participant contributions to the Plan shall be made only
by payroll deductions. At the time a Participant files the enrollment agreement
with respect to an Offering Period, the Participant shall authorize payroll
deductions to be made on each payroll date during the Offering Period in an
amount from 1% to 10% of the Eligible Compensation which the Participant
receives on each payroll date during such Offering Period. The amount of such
payroll deductions shall be a whole percentage (i.e., 1%, 2%, 3%, etc.) of the
Participant's Eligible Compensation.
(b) All payroll deductions made for a Participant shall be
deposited in the Company's general corporate account and shall be credited to
the Participant's account under the Plan. No interest shall accrue or be
credited with respect to the payroll deductions of a Participant under the Plan.
A Participant may not make any additional payments into such account. All
payroll deductions received or held by the Company under the Plan may be used by
the Company for any corporate purpose, and the Company shall not be obligated to
segregate such payroll deductions.
(c) A Participant may discontinue participation in the Plan as
provided in Section 12. A Participant may at any time during an Offering Period
(but no more than four times in any calendar year) reduce or increase (subject
to the limitations of Section 8(a) above) the rate of his or her payroll
deductions by completing and filing with the Company a change notice in the form
provided by the Company. Any such reduction in the rate of a Participant's
payroll deductions shall be effective as of the pay period specified by the
Participant in the Participant's change notice, but in no event sooner than the
first pay period ending more than fifteen (15) days after the Participant files
the change notice with the Company. Any such increase in the rate of a
Participant's payroll deductions shall be effective as of the first date of the
next Exercise Period within such Offering Period.
9. Grant of Options.
(a) On the Enrollment Date of each Offering Period, subject to the
limitations set forth in Sections 3, 9(b) and 17 hereof, each Participant shall
be granted an option to purchase on each Exercise Date during such Offering
Period (at the Exercise Price determined as provided in Section 10 below) up to
a number of shares of the Common Stock determined by dividing such Participant's
payroll deductions accumulated during the Exercise Period ending on such
Exercise
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Date by 85% of the fair market value of a share of the Common Stock on the
Enrollment Date or on the Exercise Date, whichever is lower, provided that the
number of shares subject to the option shall not exceed five (5) times the
number of shares determined by dividing 10% of the Participant's Eligible
Compensation over the Offering Period (determined based upon the Eligible
Employee's rate of Eligible Compensation in effect as of the Enrollment Date) by
85% of the Fair Market Value of a share of the Common Stock on the Enrollment
Date.
(b) Notwithstanding any provision of the Plan to the contrary, no
Participant shall be granted an option under the Plan (i) if, immediately after
the grant, such Participant (or any other person whose stock would be attributed
to such Participant pursuant to Section 424(d) of the Code) would own stock
and/or hold outstanding options to purchase stock possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company or
of any Subsidiary of the Company, or (ii) which permits such Participant's
rights to purchase stock under all employee stock purchase plans of the Company
and its Subsidiaries to accrue at a rate which exceeds $25,000 of fair market
value of such stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
10. Exercise Price.
The Exercise Price of each of the shares offered in a given Offering
Period shall be the lower of: (i) 85% of the Fair Market Value of a share of the
Common Stock on the Enrollment Date; or (ii) 85% of the Fair Market Value of a
share of the Common Stock on the applicable Exercise Date.
11. Exercise of Options.
Unless a Participant withdraws from the Plan as provided in Section 12,
the Participant's option for the purchase of shares will be exercised
automatically on each Exercise Date of the Offering Period, and the maximum
number of full shares subject to option will be purchased for the Participant at
the applicable Exercise Price with the accumulated payroll deductions in the
Participant's account. Any amount remaining in the Participant's account after
an Exercise Date shall be held in the account until the next Exercise Date in
such Offering Period, unless the Offering Period has been over-subscribed or has
terminated with such Exercise Date, in which event such amount shall be refunded
to the Participant.
12. Withdrawal; Termination of Employment.
(a) A Participant may withdraw all but not less than all of the
payroll deductions credited to the Participant's account under the Plan at any
time by giving written notice to the Company. All of the Participant's payroll
deductions credited to the Participant's account will be paid to him or her
promptly after receipt of the Participant's notice of withdrawal, the
Participant's participation in the Plan will be automatically terminated, and no
further payroll deductions for the purchase of shares will be made. Payroll
deductions will not resume on behalf of a Participant who has withdrawn from the
Plan unless written notice is delivered to the Company within the open
enrollment period preceding the commencement of an Exercise Period directing the
Company to resume payroll deductions.
(b) Upon termination of the Participant's Continuous Employment
prior to the
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Exercise Date of an Offering Period for any reason, including retirement or
death, the payroll deductions credited to the Participant's account will be
returned to the Participant or, in the case of death, to the Participant's
estate, and the Participant's options to purchase shares under the Plan will be
automatically terminated.
(c) In the event a Participant fails to maintain Continuous
Employment for at least twenty (20) hours per week during an Offering Period,
the Participant will be deemed to have elected to withdraw from the Plan, the
payroll deductions credited to the Participant's account will be returned to the
Participant, and the Participant's options to purchase shares under the Plan
will be terminated.
(d) A Participant's withdrawal from an Offering Period will not
have any effect upon the Participant's eligibility to participate in a
succeeding Offering Period or in any similar plan which may hereafter be adopted
by the Company.
13. Transferability.
Options to purchase Common Stock granted under the Plan are not
transferable by a Participant other than by will or the laws of descent and
distribution and are exercisable during a Participant's lifetime only by the
Participant.
14. Reports.
Individual accounts will be maintained for each Participant in the
Plan. Statements of account will be given to Participants semi-annually promptly
following each Exercise Date, which statements will set forth the amounts of
payroll deductions, the per share purchase price, the number of shares purchased
and the remaining cash balance, if any.
15. Adjustments Upon Changes in Capitalization.
(a) If the outstanding shares of Common Stock are increased or
decreased, or are changed into or are exchanged for a different number or kind
of shares, as a result of one or more reorganizations, restructurings,
recapitalizations, reclassifications, stock splits, reverse stock splits, stock
dividends or the like, appropriate adjustment shall be made in the number and/or
kind of shares, and the per-share option price thereof, which may be issued in
the aggregate and to any Participant upon exercise of options granted under the
Plan.
(b) In the event of the proposed dissolution or liquidation of the
Company, each Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation or entity, each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or entity
or a parent or subsidiary of such successor corporation or entity, unless the
Committee determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Participants shall have the right to
exercise the option as to all of the optioned stock. If the Committee makes an
option fully exercisable under these circumstances in lieu of assumption or
substitution, each Offering Period then in progress shall be shortened and a new
Exercise Date shall be set (the "New Exercise Date"), as of which
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date any Offering Period then in progress will terminate. The New Exercise Date
shall be on or before the date of consummation of the transaction and the
Committee shall notify each participant in writing, at least ten (10) days prior
to the New Exercise Date, that the Exercise Date for his or her option has been
changed to the New Exercise Date and that his or her option will be exercised
automatically on the New Exercise Date, unless prior to such date he or she has
withdrawn from the Offering Period as provided in Section 12. The Exercise Price
on the New Exercise Date shall be the lower of: (i) 85% of the Fair Market Value
of a share of the Common Stock on the Enrollment Date; or (ii) 85% of the Fair
Market Value of a share of the Common Stock on the applicable New Exercise Date.
(c) In all cases, the Committee shall have full discretion to
exercise any of the powers and authority provided under this Section 15, and the
Committee's actions hereunder shall be final and binding on all Participants. No
fractional shares of stock shall be issued under the Plan pursuant to any
adjustment authorized under the provisions of this Section 15.
16. Amendment of the Plan.
The Board may at any time, or from time to time, amend the Plan in any
respect; provided, however, that the Plan may not be amended in any way that
will cause rights issued under the Plan to fail to meet the requirements for
employee stock purchase plans as defined in Section 423 of the Code or any
successor thereto, including, without limitation, shareholder approval if
required.
17. Termination of the Plan.
The Plan and all rights of Employees hereunder shall terminate:
(a) on the Exercise Date that Participants would become entitled
to purchase a number of shares greater than the number of reserved shares
remaining available for purchase under the Plan if the final sentence in this
Section 17 were not applied; or
(b) at any time, at the discretion of the Board.
In the event that the Plan terminates under circumstances described in
Section 17(a) above, reserved shares remaining as of the termination date shall
be sold to Participants on a pro rata basis.
18. Notices.
All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
19. Shareholder Approval.
Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve months before or after the date the
Plan is adopted. If such shareholder approval is obtained at a duly held
shareholders' meeting, it may be obtained by the affirmative vote of the
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holders of a majority of the outstanding shares of the Company present or
represented and entitled to vote thereon.
20. Conditions Upon Issuance of Shares.
(a) The Plan, the grant and exercise of options to purchase shares
of Common Stock under the Plan, and the Company's obligation to sell and deliver
shares upon the exercise of options to purchase shares shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may, in the opinion of
counsel for the Company, be required.
(b) The Company may make such provisions as it deems appropriate
for withholding by the Company pursuant to federal or state income tax laws of
such amounts as the Company determines it is required to withhold in connection
with the purchase or sale by a Participant of any Common Stock acquired pursuant
to the Plan. The Company may require a Participant to satisfy any relevant tax
requirements before authorizing any issuance of Common Stock to such
Participant.
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