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Exhibit 10.15
FISCAL YEAR 1996
WESTERN DIGITAL SHORT-TERM BONUS PLAN SUMMARY
PURPOSE
--------------------------------------------------
The purpose of the plan is to focus participants
on achieving key financial and strategic
objectives at the corporate and business unit
levels that will lead to the creation of value for
the Company's shareholders and provide
participants the opportunity to earn significant
awards, commensurate with performance.
ELIGIBILITY
--------------------------------------------------
Plan eligibility is extended to all employees of
Western Digital and selected employees of its
domestic subsidiaries who are in, or who are hired
or promoted into, salary grades 68 and above (or
equivalent) on or before January 1, 1996.
Employees of Western Digital and its domestic
subsidiaries who are in salary grades 67 or below
(or equivalent) are eligible for awards generated
by a secondary bonus pool.
DESCRIPTION OF THE PLAN
--------------------------------------------------
The 1996 Short-Term Bonus Plan will pay cash
awards to participants for the achievement of
predetermined performance goals. Each participant
will be assigned a target bonus percentage, which
when multiplied by the participant's annual base
salary as of June 30, 1996, will determine the
target bonus payout.
Predetermined performance goals will be
established and approved by the Compensation
Committee of the Board before the end of the first
quarter of the fiscal year.
The actual performance achieved will determine the
actual percentage used to calculate the award at
the end of the plan year, with the size of the
actual award varying between 0% and 200% of the
target award.
In addition, individual awards may be adjusted
upward or downward by the Chief Executive Officer
from the amount generated by the formula. The
Chief Executive Officer's award may be adjusted
upward or downward by the Compensation Committee.
OPERATION OF THE PLAN
--------------------------------------------------
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Plan Year: July 1, 1995 to June 30, 1996
Award Opportunities: The target award for participants will be
expressed as a percentage of salary, and
determined according to salary grade, as follows:
Salary Grade Target Bonus Opportunity
(or equivalent) As a % of Base Salary
----------------------- ------------------------
68 *
69 *
70 to 71 *
72 *
73 to 74 *
75 to 77 *
Performance Measures: Performance will be measured at the corporate and
business unit levels. Performance measures that
will be used in the plan are as follows:
- Operating profit
- Operating return on operating assets
(OROA) relative to direct competitors
- Business unit financials
- Linearity
- Quality/Operations
- Milestones
- Customer Satisfaction
- Quality
1996 Goals and Weighting: Each business unit will have its own goals at the
corporate and/or business unit level, and each
goal will have an assigned weighting. These goals
and their definitions and weightings are detailed
in Schedule A.
The percentage of target bonus opportunity earned
(before discretionary adjustments) will vary from
the target bonus opportunity based on actual
performance achieved relative to the performance
goals shown in Schedule A.
ADDITIONAL PROVISIONS
--------------------------------------------------
Award Thresholds: Corporate operating profit must be at least 50% of
the Annual Operating Plan, equal to * in fiscal
1996, for any incentive payments to occur under
any aspect of the plan.
Total Award Cap: Total awards paid under this plan may not exceed a
preset percentage of corporate operating profit as
determined by the Compensation
* Confidential treatment requested
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Committee. Any award reductions attributable to
the preset percentage cap will be made by the
Chief Executive Officer.
Award Adjustment: Unit award levels may be adjusted upward or
downward 25% by the Chief Executive Officer.
After application of the unit performance,
individual awards may be adjusted upward or
downward based on the adjustment table below.
Approval from the Chief Executive Officer is
required for adjustments outside of these limits.
The Chief Executive Officer's award may be
adjusted upward or downward by the Compensation
Committee. The adjustments by salary grade level
(or equivalent) are as follows:
Salary Grade Upward Downward
(or equivalent) Adjustment Adjustment
- --------------- ---------- ----------
68 to 69 +100% (1) -100% (1)
70 & Above +40% -40%
(1) The adjustment factors are higher for those
in salary grades 68 and 69 since these
individuals also participate in Western
Digital's Profit Sharing Plan.
Extraordinary Events: The Compensation Committee, in its discretion, may
adjust the basis upon which performance is
measured to reflect the impact of significant
changes that include, but are not limited to,
unbudgeted acquisitions/divestitures, unusual or
extraordinary accounting items, or significant,
unplanned changes in the economic or regulatory
environment.
Termination: Participants must be employed by the Company at
the end of the plan year to receive an award. If a
participant terminates for reason of retirement,
total and permanent disability, or death, the
Compensation Committee has the discretion to pay
prorated awards based upon the percentage of the
year worked.
Partial Year Participation: The Compensation Committee, in its discretion, may
pay prorated awards to people hired or promoted
into eligible positions after July 1, 1995.
Deferred Payout: At the beginning of the plan year, the participant
may elect to defer payout of all or part of the
award in accordance with Western Digital's
Deferred Compensation Plan. The deferred amount
will be credited with a rate in accordance with
Western Digital's Deferred Compensation Plan.
Payout of Award: Awards will be paid in cash as soon as possible
following the end of the plan year or in
accordance with the participant's deferral
election. In addition, an amount will be deducted
from the award and contributed
* Confidential treatment requested
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to Western Digital's Savings and Profit Sharing
Plan. This amount will be based upon a percentage
of salary, and the percentage will be the same as
that used by all participants in the Western
Digital Profit Sharing Plan to determine the
contributions that they will make to the Western
Digital Savings and Profit Sharing Plan.
Secondary Pool: Secondary award pools will be created for
employees in salary grades 67 or below (or
equivalent) for all corporate and business units.
The formula used to generate a secondary pool for
each unit is as follows:
Pool =
Formula generated result [0% to 200%]
x
(1.67% of grades 64-67 salaries + 1% of grades 63
and below salaries)
* Confidential treatment requested
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SCHEDULE A
FISCAL 1996 SHORT-TERM BONUS PLAN
EWS GOALS AND WEIGHTING
100% Wtg
Corporate
--------------------------------------------------
* Wtg
Quality/Operations (2)
% of Target ---------------------------------
Bonus Consolidated * * * * * *
Opportunity Operating ------
Earned (1) Profit $MM * * * * * * *
- ---------------- --------------- --- --- --- --- --- --- ---
0% * * * * * * *
- --------------------------------------------------------------------
50% * * *
- --------------------------------------------------------------------
60% *
- --------------------------------------------------------------------
75% * *
- --------------------------------------------------------------------
100% * * * * * *
- --------------------------------------------------------------------
125% *
- --------------------------------------------------------------------
150% * *
- --------------------------------------------------------------------
200% * * * * *
- --------------------------------------------------------------------
Weighting * * * * * * * *
Note: Interpolate for performance between discrete points
(1) Before any discretionary adjustments
(2) Preliminary goals
** **************
*****************
*****************
** ********
************
************
*** ************
*************
*******
*** ***********
*************
******
*** ***************
**********
***
*** *******
- ----------------
* Confidential treatment requested
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SCHEDULE A
FISCAL 1996 SHORT-TERM BUSINESS PLAN
HPSG GOALS AND WEIGHTING
* Wtg * Wtg
% of Target Corporate HPSG
-------------- --------------------------------------
Milestones * Wtg
Bonus Consolidated ------------------------------
Opportunity Operating * * * * *
Earned (1) Profit $MM * * * * *
- ---------------- ------------- ----- ----- ----- ----- -----
0% * * *** *** *** ***
- -----------------------------------------------------------------------
50% * *** *** *** ***
- -----------------------------------------------------------------------
60% *
- -----------------------------------------------------------------------
75% *** *** *** ***
- -----------------------------------------------------------------------
100% * * ** ** ** **
- -----------------------------------------------------------------------
200% * * *** *** *** ***
- -----------------------------------------------------------------------
Weighting * * * * * *
Note: Interpolate for performance between discrete points
(1) Before any discretionary adjustments
** *********
* ******
** ******
** ******
** ******
- ----------------
* Confidential treatment requested
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SCHEDULE A
FISCAL 1996 SHORT-TERM BONUS PLAN
SALES GOALS AND WEIGHTING
* Wtg
Corporate
-------------------------------------------------------------------
* Wtg
Quality
--------------------------------
***
% of Target -------------------
Bonus Consolidated * ***
Opportunity Operating --------------
Earned (1) Profit $MM * * * * * * *
- ---------------- --------------- ----- ----- ----- ----- ----- ----- -----
0% * * ** * ** ** ** *
- -------------------------------------------------------------------------------------
50% * ** * *
- -------------------------------------------------------------------------------------
60% * **
- -------------------------------------------------------------------------------------
100% * * ** * ** ** ** *
- -------------------------------------------------------------------------------------
150% ** ** **
- -------------------------------------------------------------------------------------
200% * * ** * ** ** *
- -------------------------------------------------------------------------------------
Weighting * * * * * * * *
Note: Interpolate for performance between discrete points
(1) Before any discretionary adjustments
* ******
**************
** **********
*****
****************
***********************
*********************
**************
***************
* * * *
----- ----- ----- -----
* * * *
* *******
* **********
****
**** ***************
**** ************
* **************
- ----------------
* Confidential treatment requested
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Schedule A
Fiscal 1996 Short-Term Bonus Plan
PSG Goals and Weighting
* Wtg
* Wtg PSG (2)
Corporate ----------------------------------
% of Target ------------ * Wtg
Bonus Consolidated * Quality (2)
Opportunity Operating * -------------------
Earned (1) Profit $MM * * * * * * *
- ----------- ------------ --- --- --- ---- --- --- ---
0% * * * * ** * * *
- -------------------------------------------------------------
33% ** * * *
- -------------------------------------------------------------
50% * *
- -------------------------------------------------------------
60% * *
- -------------------------------------------------------------
100% * * * * ** * * *
- -------------------------------------------------------------
150% *
- -------------------------------------------------------------
200% * * * * ** * * *
- -------------------------------------------------------------
Weighting * * * * * * * *
Note: Interpolate for performance between discrete points
(1) Before any discretionary adjustments
(2) Preliminary goals
* ********************************
* ********************
* *************
***
* * *
--- --- ---
****** * * *
******** * *
******* *
* ****
* ****
* ********
- ----------------
* Confidential treatment requested
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Schedule A
Fiscal 1996 Short-Term Bonus Plan
MCP Goals and Weighting
* Wtg
MCP (2)
* Wtg ------------------------------------------------------
% of Corporate * Wtg * Wtg
Target ------------ Oper- *** ** -------------
Bonus Consolidated ating -------------- --------------- * *
Opportunity Operating Profit * ** ** * --------
Earned (1) Profit $MM $MM * * ** ** ** * * * *
- ----------- ------------ ------ --- --- ---- ---- ---- --- --- --- ---
0% * * * * * ** ** ** * * *
- -------------------------------------------------------------------------------
60% * * * * * * * * * * *
- -------------------------------------------------------------------------------
100% * * * * * * * * * * *
- -------------------------------------------------------------------------------
200% * * * * * * * * * * *
- -------------------------------------------------------------------------------
Weighting * * * * * * * * * * *
Note: Interpolate for performance between discrete points
(1) Before any discretionary adjustments
(2) Preliminary goals
* ****
* ********************
**** *******
** ******
-----------------------
***** * * *
-------------------- --- --- ---
*** * ** * *
*** * *** * *
*** * * * *
************
* ********
*****************
* *** ********
* * * *
--- --- --- ---
* * * * *
* * * * *
* * * * *
* * * * *
* ***
----------------------------
* * * *
* * * * *
* * * * *
* * * * *
* * * * *
- ----------------
* Confidential treatment requested
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