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Exhibit 10.3.1
WESTERN DIGITAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
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, $0.10 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 eligible to
participate in the Plan as described in Section 5 below.
(i) "Employee" means any person, including an officer, who is
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Participating
Subsidiaries.
(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.
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(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, 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, 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) "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.
(p) "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.
(q) "Participating Subsidiary" means any Subsidiary other than a
Subsidiary excluded from participation in the Plan by the Committee, in its
sole discretion.
(r) "Plan" means this Western Digital Corporation 1993 Employee
Stock Purchase Plan.
(s) "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 Internal Revenue Code of 1986. 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 Employees under
the Plan an aggregate of 2,500,000 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 Employee 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 not less than 3 members of the Board who are not officers or
employees of the Company or of any of its Subsidiaries and who are
disinterested persons within the terms of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934. The Committee shall have authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all other
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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
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 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 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.
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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 of 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 and 9(b) hereof, each Eligible Employee
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 Company's Common Stock determined by
dividing such Employee's payroll deductions accumulated during the Exercise
Period ending on such Exercise Date by 85% of the fair market value of a share
of the Company's 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 Employee'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
Company's Common Stock on the Enrollment Date.
(b) Notwithstanding any provision of the Plan to the contrary, no
Employee shall be granted an option under the Plan (i) if, immediately after
the grant, such Employee (or any other person whose stock would be attributed
to such Employee 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 Employee'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 of the Company on the Enrollment Date; or (ii) 85% of the Fair
Market Value of a share of the Common Stock of the Company on the applicable
Exercise Date.
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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 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 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 an Employee fails to maintain Continuous
Employment for at least twenty (20) hours per week during an Offering Period in
which the Employee is a Participant, the Employee will be deemed to have
elected to withdraw from the Plan, the payroll deductions credited to the
Employee's account will be returned to the Employee, and the Employee'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 participating Employees
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, upon authorization of the Committee, appropriate
adjustments shall be made in the number and/or kind of shares, and the
per-share
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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, each option under the Plan shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, unless the Committee determines, in
the exercise of its sole discretion and in lieu of such assumption or
substitution, that the Participant shall have the right to exercise the option
as to all of the optioned stock, including shares as to which the option would
not otherwise be exercisable. If the Committee makes an option fully
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Committee shall notify the Participant that the option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice, and the option will terminate upon the expiration of such period.
(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 become entitled to
purchase a number of shares greater than the number of reserved shares
remaining available for purchase under the Plan; 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
holders of a majority of the outstanding shares of the Company present or
represented and entitled to vote thereon.
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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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