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EXHIBIT 10.34
FISCAL YEAR 1997
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WESTERN DIGITAL MANAGEMENT INCENTIVE PLAN (MIP)
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PURPOSE
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The purpose of this Plan is to focus
participants on achieving key financial and
strategic objectives at the corporate and
business group 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
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Plan eligibility is extended to all employees
of Western Digital and selected employees of
its domestic subsidiaries who are in, or who
are hired into, salary grades 68 and above (or
equivalent) on or before January 6, 1997.
Eligibility may be granted to employees who
have an authorized written agreement that
grants them eligibility.
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
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The 1997 Management Incentive Plan will pay a
combination of cash and deferred awards to
participants for the achievement of
predetermined performance goals. Each
participant will be assigned a pool or target
bonus percentage, which when multiplied by the
participant's annual base salary as of June
30, 1997, will determine the pool or target
bonus payout.
Predetermined performance goals will be
established and approved by the Compensation
Committee of the Board of Directors before the
end of the first quarter of the fiscal year.
The actual performance achieved will determine
the percentage used to calculate the award at
the end of the plan year. The size of the
actual award can vary between 0% and 200% of
the pool or 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.]
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OPERATION OF THE PLAN
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Plan Year: July 1, 1996 to June 30, 1997
Award Opportunities: The award for participants will be expressed as
a percentage of salary, and determined
according to salary grade.
1997 Goals and Weighting: Each business group will have goals at the
corporate and/or business group level, and each
goal will have an assigned weighting.
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.
ADDITIONAL PROVISIONS
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Award Thresholds: Corporate operating profit must be at least 50%
of the Annual Operating Plan for incentives to
be paid under any aspect of the Plan.
In addition each business group will have a
predetermined operating profit threshold below
which no incentive payments can occur for that
business group.
Total Award Cap: Total awards paid under this Plan may not
exceed a preset percentage of corporate
operating profit as determined by the
Compensation Committee. Any award reductions
attributable to the preset percentage cap will
be made by the Chief Executive Officer.
Award Adjustment: Group award levels may be adjusted upward or
downward by up to 25% by the Chief Executive
Officer.
After application of the group 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
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68, 69 & 84 +100% (1) -100% (1)
All others +40% -40%
(1) The adjustment factors are higher for
those in salary grades 68, 69 and 84
since these individuals also participate
in Western Digital's Profit Sharing Plan.
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All awards under this Plan are discretionary.
The amount of the award including adjustments
is determined by Western Digital in its sole
discretion. No employee has any contractual
right to receive an award pursuant to this Plan
due to his/her employment at Western Digital.
Extraordinary Events: The Compensation Committee, in its discretion,
may adjust the basis upon which performance is
measured to reflect the effect 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 The Compensation Committee, in its discretion,
Participation: may pay prorated awards to people hired or
promoted into eligible positions after
July 1, 1996.
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 as
specified in the 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 according
to the participant's deferral election. In
addition, an amount will be deducted from the
award and contributed to Western Digital's
Savings and Profit Sharing Plan. This amount
will be based upon a percentage of salary.
This percentage will be the same as that used
by all participants in the Western Digital
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
groups.
Management has the discretion to award any one
individual up a maximum of 10% of salary.
Approval of the CEO is required for discretion
outside this limit.
The intent of this pool is to allow for the top
10% of the remaining population to receive 5%
of their salary as a bonus.
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