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EXHIBIT 10.35
FISCAL YEAR 1999/2000
WESTERN DIGITAL BRIDGE INCENTIVE PROGRAM
PURPOSE
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The purpose of this program 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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Program 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 July 6,
1999.
Eligibility may also 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 PROGRAM
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The 1999/2000 Bridge Incentive Program will
pay as cash 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 September 30, 1999, will
determine the pool or target bonus payout.
Predetermined performance goals were
established and approved by the Compensation
Committee of the Board of Directors before
April 1, 1999.
The actual performance achieved will determine
the percentage used to calculate the award at
the end of the program year. The size of the
actual award can vary between 0% and 200% of
the pool or target award.
In addition, individual and pool 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 PROGRAM
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Program Period: April 1, 1999 to September 30, 1999
Award Opportunities: The award for participants will be expressed
as a percentage of salary, and determined
according to salary grade. In general, the
target for this program will be one-half of
the normal Bonus target.
Performance Measures: Performance will be measured at the corporate
and business group levels. Performance
measures that will be used in the 1999/2000
Bridge Program are as follows:
o Profitability
o Time to Market
o Time to Volume
o Time to Quality
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. EWS
employees will be weighted 100% in the actual
results of DPD respectively. Business group
Vice Presidents and Senior Directors will have
a portion of their results determined by the
other business group.
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/loss must be at a
minimum level for incentives to be paid under
any aspect of the Program.
In addition, each business group will have a
predetermined operating profit/loss threshold
below which no incentives will be paid for
that business group.
Total Award Cap: Total awards paid under this Program 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 provided that total awards do not
exceed the amounts generated by formula. 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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All Participants +100% -100%
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All awards under this program 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 program 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 program 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 April
1, 1999. In general, awards will be prorated
for participants who begin before July 6, 1999
while those hired after July 6, 1999 will not
be eligible to participate in the program.
Deferred Payout: Before the end of the calendar 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 program year
or according to the participant's deferral
election. Options which vest will be
exerciseable at the discretion of the
participant subject to the terms and
conditions of the Employee Stock Option 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.
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