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Exhibit 10.11
WESTERN DIGITAL CORPORATION
Executive Bonus Plan
Master Plan Document
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WESTERN DIGITAL CORPORATION
Executive Bonus Plan
Master Plan Document
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TABLE OF CONTENTS
ARTICLE 1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 Selection, Enrollment and Eligibility . . . . . . . . . . . . . . . . . . 4
2.1 Selection by Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Enrollment Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Eligibility; Commencement of Participation . . . . . . . . . . . . . . . . 4
ARTICLE 3 Vesting; Account Balance . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Vesting in Change in Control Benefit . . . . . . . . . . . . . . . . . . . 4
3.2 Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Account Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 4
4.1 Change in Control Benefit . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Employer Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.3 Withholding and Payroll Taxes . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 5
5.1 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.2 Beneficiary Designation; Change; Spousal Consent . . . . . . . . . . . . . 6
5.3 Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.4 No Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . . . 6
5.5 Doubt as to Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.6 Discharge of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 6 Termination, Amendment or Modification of the Plan . . . . . . . . . . . . 6
6.1 Termination, Amendment or Modification Prior to One Year
Before Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.2 Termination, Amendment or Modification Within One Year Before
Change of Control or Following Change in Control . . . . . . . . . . . . 7
6.3 Termination of Plan Agreement . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 7 Other Benefits and Agreements . . . . . . . . . . . . . . . . . . . . . . 7
7.1 Coordination with Other Benefits . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 8 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.1 Establishment of the Trust; Premiums . . . . . . . . . . . . . . . . . . . 7
8.2 Interrelationship of the Plan and the Trust . . . . . . . . . . . . . . . 7
8.3 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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Executive Bonus Plan
Master Plan Document
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ARTICLE 9 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9.1 Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9.2 Documents Required by Insurer . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 10 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
10.1 Committee Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
10.2 Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.3 Binding Effect of Decisions . . . . . . . . . . . . . . . . . . . . . . . . 9
10.4 Indemnity of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.5 Employer Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 11 Claims Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.1 Presentation of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.2 Notification of Decision . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.3 Review of Denied Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11.4 Decision on Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11.5 Legal Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 12 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
12.1 Unsecured General Creditor . . . . . . . . . . . . . . . . . . . . . . . . . 10
12.2 Employer's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
12.3 Nonassignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12.4 Not a Contract of Employment . . . . . . . . . . . . . . . . . . . . . . . . 11
12.5 Furnishing Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12.6 Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12.7 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12.9 Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12.10 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12.11 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12.12 Spouse's Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12.13 Incompetent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12.14 Distribution in the Event of Taxation . . . . . . . . . . . . . . . . . . . 12
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Executive Bonus Plan
Master Plan Document
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WESTERN DIGITAL CORPORATION
EXECUTIVE BONUS PLAN
EFFECTIVE MAY 16, 1994
PURPOSE
The purpose of this Plan is to provide specified benefits to a select group of
management and highly compensated employees who may contribute materially to
the continued growth, development and future business success of Western
Digital Corporation, a Delaware corporation, and its subsidiaries. The Plan is
intended to constitute a bonus arrangement and fall outside the scope and
jurisdiction of the Employee Retirement Income Security Act of 1974.
ARTICLE 1
DEFINITIONS
For purposes hereof, unless otherwise clearly apparent from the context, the
following phrases or term shall have the following indicated meaning:
1.1 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 5 below, that are
entitled to receive benefits under this Plan upon the death of a
Participant.
1.2 "Beneficiary Designation Form" shall mean the form established from
time to time by the Committee that a Participant completes, signs and
returns to the Committee to designate one or more Beneficiaries and
attached hereto as Exhibit A.
1.3 "Board" shall mean the Board of Directors of the Company.
1.4 "Change of Control" means and shall be deemed to occur if any of the
following events occur:
(a) Any Person (other than an Exempt Person), alone or together
with its Affiliates and Associates, including any group of
Persons which is deemed a "person" under Section 13(d) (3) of
the Exchange Act, becomes the Beneficial Owner, directly or
indirectly, of thirty-three and one-third percent or more of:
(i) the then-outstanding shares of the Company's common
stock or
(ii) securities representing thirty-three and one-third
percent or more of the combined voting power of the
Company's then outstanding voting securities;
(b) A change, during any period of two consecutive years, of a
majority of the Board of the Company as constituted as of the
beginning of such period, unless the election, or nomination
for election by the Company's stockholders, of each director
who was not a director at the beginning of such period was
approved by vote of at least two-thirds of the Incumbent
Directors then in office (for purposes hereof, "Incubent
Directors" shall consist of the directors holding office as of
the effective date of this Plan and any person becoming a
director subsequent to such
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Executive Bonus Plan
Master Plan Document
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date whose election, or nomination for election by the
Company's stockholders, is approved by a vote of at least a
majority of the Incumbent Directors then in office);
(c) Consummation of any merger, consolidation, reorganization or
other extraordinary transactions (or series of related
transactions) involving the Company which results in the
stockholders of the Company having power to vote in the
ordinary election of directors immediately prior to such
transaction (or series of related transactions) failing to
beneficially own at least a majority of the securities of the
Company having the power to vote in the ordinary election of
directors which are outstanding after giving effect to such
transaction (or series of related transactions); or
(d) The stockholders of the Company approve a plan of complete
liquidation of the Company or the sale of substantially all of
the assets of the Company.
(e) Substantially all of the assets of the Company are sold or
otherwise transferred to parties that are not within a
"controlled group of corporations" (as defined in Section 1563
of the Internal Revenue Code of 1986, as amended) in which the
Company is a member,
(f) The Company or any other Employer voluntarily files a petition
for bankruptcy under federal bankruptcy law, or an involuntary
bankruptcy petition is filed against any Employer under
federal bankruptcy law, which involuntary petition is not
dismissed within 120 days of the filing;
(g) The Company or any other Employer makes a general assignment
for the benefit of creditors; or
(h) The Company or any other Employer seeks or consents to the
appointment of a trustee, receiver, liquidator or similar
person.
With respect to Sections 1.6(f), (g) and (h) above, if the
event described occurs only with respect to one or more
Employers (other than the Company) and not to the Company,
such event shall be a "Change in Control" only with respect to
the Participants of that Employer or those Employers.
1.5 "Change in Control Benefit" shall mean the benefit set forth in
Section 4.1 below.
1.6 "Claimant" shall have the meaning set forth in Section 11.1 below.
1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
1.8 "Committee" shall mean the administrative committee appointed to
manage and administer the Plan in accordance with the provisions of
Article 10 below.
1.9 "Company" shall mean Western Digital Corporation, a Delaware
corporation.
1.10 "Disability" shall mean a period of disability during which a
Participant qualifies for benefits under the Participant's Employer's
long-term disability plan (if the Participant participates in such a
plan), or, if a Participant does not participate in such a plan, a
period of disability during which the Participant would have qualified
for benefits under the Employer's long-term disability plan had the
Participant been a participant in such a plan (determined in the sole
discretion of the Committee), or, if there is no such plan, as
determined in the sole discretion of the Committee.
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1.11 "Employer" shall mean the Company and/or any of its subsidiaries that
have been selected by the Board to participate in the Plan.
1.12 "Employer Benefit" shall mean the benefit set forth in Section 4.2
below.
1.13 "Forfeiture" shall mean a forfeiture of a Participant's rights to
benefits under this Plan as set forth in Section 3.2 below.
1.14 "Insurer" shall mean the insurance company or companies that issue one
or more Policies.
1.15 "Participant" shall mean any employee of an employer
(a) who is selected to participate in the Plan,
(b) who elects to participate in the Plan,
(c) who signs a Plan Agreement and a Beneficiary Designation Form,
(d) whose signed Plan Agreement and Beneficiary Designation Form
are accepted by the Committee, and
(e) whose Plan Agreement has not terminated.
1.16 "Participant's Account" shall mean an account established in
accordance with Section 8.3(a)(i) below.
1.17 "Plan" shall mean the Western Digital Executive Bonus Plan, which is
defined by this instrument and by each Plan Agreement, all as may be
amended from time to time.
1.18 "Plan Agreement" shall mean a written agreement, as may be amended
from time to time, which is entered into by and between an Employer
and a Participant. Each Plan Agreement executed by a Participant
shall provide for the entire benefit to which such Participant is
entitled to under the Plan, and the Plan Agreement bearing the latest
date of acceptance by the Committee shall govern such entitlement.
1.19 "Plan Year" shall, for the first Plan Year, begin on May 16, 1994, and
end on December 31, 1994. For each Plan Year thereafter, the Plan Year
shall begin on January 1 of each year and continue through December 31
of that year.
1.20 "Policy" or "Policies" shall mean the policy or policies issued in the
name of the Trustee in accordance with the terms and conditions of
this Plan and each respective Plan Agreement.
1.21 "Retirement," "Retires" or "Retired" shall mean a Participant ceasing
to be employed by all Employers for any reason other than death,
Disability or Termination of Employment on or after a Participant
attains the age of sixty-two (62).
1.22 "Termination of Employment" shall mean the ceasing of employment with
all Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability or death.
1.23 "Trust" shall mean the trust established pursuant to that certain
Trust Agreement, dated as of May 16, 1994, between the Company and the
Trustee, as may be amended from time to time.
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1.24 "Trustee" shall mean the trustee named in the Trust and any successor
trustee.
1.25 "Vesting Date" shall mean the date upon which a Participant becomes
100% vested in his or her Change in Control Benefit in accordance with
Section 3.1 below.
1.26 "Western DCP" shall mean the Western Digital Corporation Deferred
Compensation Plan as in effect from time to time.
ARTICLE 2
SELECTION, ENROLLMENT AND ELIGIBILITY
2.1 SELECTION BY COMMITTEE. Participation in the Plan shall be limited to
a select group of management and highly compensated employees of the
Employers. From that group, the Committee shall select, in its sole
discretion, employees to participate in the Plan.
2.2 ENROLLMENT REQUIREMENTS. As a condition to participation, each
selected employee shall complete, execute and return to the Committee
a Plan Agreement and a Beneficiary Designation Form. In addition, the
Committee, in its sole discretion, shall establish from time to time
such other enrollment requirements as it determines are necessary.
2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an employee
selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
that employee shall commence participation in the Plan on the date
specified by the Committee. If a selected employee fails to meet all
such requirements prior to that date, that employee shall not be
eligible to participate in the Plan until the completion of those
requirements.
ARTICLE 3
VESTING; ACCOUNT BALANCE
3.1 VESTING IN CHANGE IN CONTROL BENEFIT. Subject to Section 3 2 below:
(a) General Rule. If a Participant has not Retired, died, suffered
a Disability, experienced a Termination of Employment, or
received a complete withdrawal from the Western DCP that
permanently ends his participation in such plan prior to 90
days prior to a Change in Control, the Participant shall
become 100% vested in his or her Change in Control Benefit on
January 1 of the Plan Year following the Change in Control
(the "Vesting Date").
(b) Early Vesting. If at any time on or after 90 days prior to a
Change in Control and prior to the Vesting Date a Participant
Retires, dies, suffers a Disability or experiences an
involuntarily termination of employment with all Employers,
the Participant (or the Participant's Beneficiary in the event
of the Participant's death) shall become 100% vested in his or
her Change in Control Benefit on the later of
(i) the date of the Change in Control or
(ii) the date of such Retirement, death, Disability or
involuntary termination of employment, and such date
(rather than January 1 of the following Plan Year)
shall be considered the "Vesting Date" for purposes
of this Plan.
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3.2 FORFEITURE. Notwithstanding Section 3.1 above, a Participant shall
forfeit rights to benefits under this Plan in accordance with this
Section 3.2.
(a) A Participant shall forfeit any right to benefits under this
Plan if he or she:
(i) Retires, dies, suffers a Disability, experiences a
Termination of Employment or receives a complete
withdrawal from the Western DCP that permanently ends
his participation in such plan prior to 90 days prior
to a Change in Control; or
(ii) Voluntarily terminates his or her employment (other
than by Retirement or Disability) with all of his
Employers or withdraws all of his interest in the
Western DCP thereby ending his participation in such
plan at any time on or after the date of the Change
in Control and prior to January 1 of the Plan Year
following a Change in Control.
(b) A Participant receiving a Short Payout or other partial
distribution from the Western DCP before his Vesting Date
described in Section 3.1 (a) hereof shall forfeit a portion of
his Change in Control Benefit which bears the same proportion
to all of such benefit as the partial distribution bears to
his total interest in the Western DCP.
3.3 ACCOUNT BALANCE. Within 45 days of the end of each Plan Year, each
Participant shall receive a statement setting forth the balance of his
or her Participant's account as of the end of that Plan Year.
ARTICLE 4
BENEFITS
4.1 CHANGE IN CONTROL BENEFIT.
(a) Eligibility. On the Vesting Date, the Participant or the
Participant's Beneficiary, as the case may be, shall become
entitled to the "Change in Control Benefit" described in
Section 4.1(b).
(b) Benefit and Payment. The "Change in Control Benefit" shall be
a dollar amount that is equal to the fair market value of the
assets allocated to and held in the Participant's Account as
of the Vesting Date. This benefit shall be paid to the
Participant, or his or her Beneficiary, within 90 days of the
Vesting Date.
4.2 EMPLOYER BENEFIT.
(a) Eligibility. The Participant's Employer shall be entitled to
the Employer Benefit if and to the extent a Participant
forfeits his Change in Control Benefit under Section 3.2
hereof.
(b) Benefit and Payment. The "Employer Benefit" shall be a
distribution of the forfeited assets allocated to and held in
the Participant's Account as of the date of the event
described in Section 3.2 above after taking into account any
distributions made or to be made in accordance with Section
4.1 above, plus any earnings allocated to that account from
that date to the date of payment of the Employer Benefit. This
benefit shall be paid to the Participant's Employer within 120
days of January 1 of the Plan Year following that event.
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4.3 WITHHOLDING AND PAYROLL TAXES. The Trustee shall withhold from any and
all benefit payments made under this Article 4, all federal, state and
local income, employment and other taxes required to be withheld in
connection with the payment of benefits hereunder, in amounts to be
determined in the sole discretion of the Participant's Employer.
ARTICLE 5
BENEFICIARY
5.1 BENEFICIARY. Each Participant shall have the right, at any time, to
designate his or her Beneficiary (both primary as well as contingent)
to receive any benefits payable under the Plan to a Beneficiary upon
the death of a Participant.
5.2 BENEFICIARY DESIGNATION; CHANGE: SPOUSAL CONSENT. A Participant shall
designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules
and procedures, as in effect from time to time. If the Participant
names someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Committee, must be signed by
that Participant's spouse and returned to the Committee. Upon the
acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The
Committee shall be entitled to rely on the last Beneficiary
Designation Form filed by the Participant and accepted by the
Committee before his or her death.
5.3 ACKNOWLEDGMENT. No designation or change in designation of a
Beneficiary shall be effective until received, accepted and
acknowledged in writing by the Committee or its designated agent.
5.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
Beneficiary as provided in Sections 5.1, 5.2 and 5.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the
Participant's estate.
5.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, before
a Change in Control, to cause the Trustee to withhold such payments
until this matter is resolved to the Committee's satisfaction.
5.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to
the Participant, and the Participant's Plan Agreement shall terminate
upon such full payment of benefits.
ARTICLE 6
TERMINATION, AMENDMENT OR MODIFICATION OF THE PLAN
6.1 TERMINATION, AMENDMENT OR MODIFICATION PRIOR TO ONE YEAR BEFORE CHANGE
IN CONTROL. Prior to one year before a Change in Control, each
Employer reserves the right to terminate, amend or modify the Plan or
any related Plan Agreement, in whole or in part, with respect to
Participants whose services
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are retained by the Employer. Notwithstanding the foregoing, no
termination, amendment or modification shall be effective to decrease
or reduce a Participant's potential benefits under this Plan below the
balance in his or her Participant's Account as of the effective date of
the termination, amendment or modification.
6.2 TERMINATION, AMENDMENT OR MODIFICATION WITHIN ONE YEAR BEFORE CHANGE
OF CONTROL OR FOLLOWING CHANGE IN CONTROL. Within one year before a
Change in Control and thereafter, neither the Company, any subsidiary
of the Company nor any corporation, trust or other person that
succeeds to all or any substantial portion of the assets of the
Company shall have the right to terminate, amend or modify the Plan
and/or any Plan Agreement in effect prior to such Change in Control,
and all benefits under the Plan and any such Plan Agreement shall
thereafter be paid in accordance with the terms of the Plan and such
Plan Agreement, as in effect immediately prior to such Change in
Control. If the Plan is terminated, amended, or modified within one
year before the Change in Control, such termination, amendment or
modification shall be considered void as of the date of the
termination, amendment or modification. Any provision of this Plan or
any Plan Agreement to the contrary shall be construed in accordance
with this Section 6.2(a).
6.3 TERMINATION OF PLAN AGREEMENT. Absent the earlier termination,
modification or amendment of the Plan, or a Participant's Forfeiture
of his or her benefits under this Plan, the Plan Agreement of any
Participant shall terminate upon the full payment of the applicable
benefit provided under Article 4.
ARTICLE 7
OTHER BENEFITS AND AGREEMENTS
7.1 COORDINATION WITH OTHER BENEFITS. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any
other plan or program for employees. The Plan shall supplement and
shall not supersede, modify or amend any other such plan or program
except as may otherwise be expressly provided.
ARTICLE 8
TRUST
8.1 ESTABLISHMENT OF THE TRUST; PREMIUMS. The Employers shall establish
the Trust and shall at least annually transfer over to the Trust such
assets as the Committee determines, prior to a Change in Control, or
the Trustee determines, after a Change in Control, are necessary to
provide for the Employers' future liabilities created with respect to
the benefits provided under the Plan and the Plan Agreements,
including, without limitation, the payment of insurance premiums in
amounts sufficient to acquire and maintain all Policies held by the
Trustee. At the direction of the Committee, prior to a Change in
Control, or the Trustee, after a Change in Control, the Employers
shall pay any and all Policy premiums and other costs directly to the
Insurer. In addition, if the Trust incurs any tax liability, the
Employers shall contribute to the Trust sufficient funds to allow the
Trustee to pay any such tax liability.
8.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the
Plan and each Plan Agreement shall govern the rights of a Participant
to receive distributions pursuant to the Plan. The provisions of the
Trust shall govern the rights of the Trustee, Participant and a
Participant's Beneficiary as to the assets of the Trust. The Employers
shall at all times remain liable to carry out their obligations under
the Plan. The Employers and the Trustee shall cooperate with each
other as is necessary to minimize the Trust's tax liability.
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8.3 ACCOUNTS.
(a) The Trustee shall establish and maintain the following separate
accounts:
(i) A "Participant's Account" for each Participant to
which the Employers' contributions, or a portion
thereof, and earnings thereon shall be allocated to
and held, the assets of which are to be used to pay
the Change in Control Benefit or the Employer Benefit
in accordance with this Plan and the Trust; and
(ii) An "Administrative Account" for the administrative
expenses of the Trust to which a portion of the
Employers' contributions and earnings thereon may be
allocated to and held, the assets of which are to be
used to pay the administrative expenses, including
all taxes, of the Trust in accordance with the terms
and provisions of this Plan and the Trust.
(b) Prior to a Change in Control, the Committee shall direct the
Trustee in writing as to:
(i) the allocation of the Employers' contributions to the
accounts described in Section 8.3(a) above, and
(ii) the amounts of the earnings on the Employer's
contributions held in the accounts described in
Section 8.3(a) above. After a Change in Control, the
Trustee shall make such allocations in accordance
with the terms of the Plan and the Trust.
Notwithstanding the foregoing, and except for a
payment of benefits in accordance with Article 4 or a
Forfeiture of benefits, a Participant's Account
balance shall not be reduced.
(c) Each of the accounts described in Section 8.3(a) above shall
qualify for and be treated as separate shares under Code
Section 663(c).
ARTICLE 9
INSURANCE POLICIES
9.1 POLICIES. The Committee may direct the Trustee in writing to acquire
one or more Policies in the Trustee's name. The Trustee shall be the
sole and absolute owner and beneficiary of each Policy, with all
rights of an owner and beneficiary, including without limitation, the
right to surrender Policies for their cash surrender values and to
take one or more loans against one or more Policies. Notwithstanding
the foregoing, the trustee shall exercise its ownership rights in each
Policy only in accordance with the terms of this Plan, the respective
Plan Agreements and the Trust.
9.2 DOCUMENTS REQUIRED BY INSURER. The Trustee, the Participant's Employer
and the Participant shall sign such documents and provide such
information as may be required from time to time by the Insurer.
ARTICLE 10
ADMINISTRATION
10.1 COMMITTEE DUTIES. This Plan shall be administered by a Committee which
shall consist of persons approved by the Board. Members of the
Committee may be Participants under this Plan. The Committee shall
also have the discretion and authority to make, mend, interpret, and
enforce all appropriate rules
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and regulations for the administration of this Plan and decide or
resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan.
10.2 AGENTS. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative
duties as it sees fit and may from time to time consult with counsel
who may be counsel to any Employer.
10.3 BINDING EFFECT OF DECISIONS. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
10.4 INDEMNITY OF COMMITTEE. All Employers shall indemnify and hold
harmless the members of the Committee against any and all claims,
losses, damages, expenses or liabilities arising from any action or
failure to act with respect to this Plan, except in the case of
willful misconduct by the Committee or any of its members.
10.5 EMPLOYER INFORMATION. To enable the Committee to perform its
functions, each Employer shall supply full and timely information to
the Committee on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement,
Disability, death or Termination of Employment of its Participants,
and such other pertinent information as the Committee may reasonably
require.
ARTICLE 11
CLAIMS PROCEDURES
11.1 PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below
as a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such
Claimant from the Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 60 days
after such notice was received by the Claimant. All other claims must
be made within 180 days of the date on which the event that caused the
claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.
11.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim within 60 days of receipt of that claim, and shall notify the
Claimant in writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant's requested determination, and
such notice must set forth in a manner calculated to be
understood by the Claimant:
(i) the specific reason(s) for the denial of the claim,
or any part of it;
(ii) the specific reference(s) to pertinent provisions of
the Plan upon which such denial was based:
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(iii) a description of any additional material or
information necessary for the Claimant to perfect the
claim, and an explanation of why such material or
information is necessary; and
(iv) an explanation of the claim review procedure set
forth in Section 11.3 below.
11.3 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's only authorized representative) may file
with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
11.4 DECISION ON REVIEW. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood
by the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
(c) such other matters as the Committee deems relevant.
11.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
this Article 11 is a mandatory prerequisite to a Claimant's right to
commence any legal action with respect to any claim for benefits under
this Plan.
ARTICLE 12
MISCELLANEOUS
12.1 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interest or claims in any property or assets of an Employer. Any and
all of an Employer's assets shall be, and remain, the general,
unpledged and unrestricted assets of the Employer. An Employer's
obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.
12.2 EMPLOYER'S LIABILITY. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer shall
have no obligation to a Participant under the Plan except as expressly
provided in the Plan and his or her Plan Agreement.
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12.3 NONASSIGNABILITY. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are expressly
declared to be unassignable and non-transferable, except that the
foregoing shall not apply to any family support obligations set forth
in a court order. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, nor be transferable by operation of
law in the event of a Participant's or any other person's bankruptcy
or insolvency.
12.4 NOT A CONTRACT OF EMPLOYMENT. The terms and condition of this Plan
shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged
to be an "at will" employment relationship that can be terminated at
any time for any reason, with or without cause, unless expressly
provided in a written employment agreement. Nothing in this Plan shall
be deemed to give a Participant the right to be employed in the
service of any Employer, or to interfere with the right of any
employer to discipline or discharge the Participant at any time.
12.5 FURNISHING INFORMATION. A Participant will cooperate with the
Committee by furnishing any and all information requested by the
Committee and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
12.6 TERMS. Whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural
or the singular, as the case may be, in all cases where they would so
apply.
12.7 CAPTIONS. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
12.8 GOVERNING LAW. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of California.
12.9 VALIDITY. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this plan shall be construed and
enforced as if such illegal and invalid provision had never been
inserted herein.
12.10 NOTICE. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the
address below:
Deferred Compensation Plan Committee
Western Digital Corporation
8105 Irvine Center Drive
Irvine, California 92718
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the
Participant.
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12.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns
and the Participant, the Participant's Beneficiaries, and their
permitted successors and assigns.
12.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by
such spouse in any manner, including but not limited to such spouse's
will, nor shall such interest pass under the laws of intestate
succession.
12.13 INCOMPETENT. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of
that person's property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the
care and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetency, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account
of the Participant and the Participant's Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Plan
for such payment amount.
12.14 DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason, all or any
portion of a Participant's benefit under this Plan becomes taxable to
the Participant prior to the Vesting Date, a Participant may petition
the Committee, if prior to a Change in Control, or the Trustee, after
a Change in Control, for a distribution of assets sufficient to meet
the Participant's tax liability (including additions to tax, penalties
and interest). Upon the grant of such a petition, which grant shall
not be unreasonably withheld, the Trustee shall distribute to the
Participant from the Trust immediately available funds in an amount
equal to that Participant's federal, state and local tax liability
associated with such taxation, which liability shall be measured by
using that Participant's then current highest federal, state and local
marginal tax rate, plus the rates or amounts for the applicable
additions to tax, penalties and interest. If the petition is granted,
the tax liability distribution shall be made within 90 days of the
date when the Participant's petition is granted.
IN WITNESS WHEREOF the Company has signed this Plan document as of
May 1, 1994.
WESTERN DIGITAL CORPORATION,
a Delaware corporation
By: ROBERT L. ERICKSON
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Officer's Name: Robert L. Erickson
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