EXHIBIT 10.1
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WESTERN(R) WESTERN DIGITAL CORPORATION
DIGITAL ID: 95-2657125
P.O. Box 19665
Lake Forest, CA 92630-7741
(949) 672-7000 x 27985/27986
NOTICE OF GRANT OF STOCK UNITS
AND STOCK UNIT AWARD AGREEMENT - EXECUTIVES
((FN))((MN))((LN)) AWARD NUMBER: ((NBR))
((AD1)) PLAN: ((PLN))
((AD2)) ID: ((ID))
((CTY)), ((ST)) ((Z))
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Congratulations! Effective((optdt)), you have been granted stock units of
Western Digital Corporation. These stock units were granted under the 2004
Performance Incentive Plan (the "Plan").(1)
VESTING(2):
<Table>
<Caption>
Units Vest Type Full Vest
----- --------- ---------
((sp1)) ((vtpr1)) ((vdp1))
((sp2)) ((vtp2)) ((vdp2))
((sp3)) ((vtp3)) ((vdp3))
((sp4)) ((vtp4)) ((vdp4))
</Table>
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Your stock unit award is subject to the terms and conditions of this Notice, the
attached Standard Terms and Conditions for Stock Unit Awards - Executives (the
"Standard Terms") and the Plan. By accepting the award, you are agreeing to the
terms of the award as set forth in those documents. You should read the Plan,
the Prospectus for the Plan, and the Standard Terms. The Standard Terms and the
Plan are each incorporated into (made a part of) this Notice by this reference.
You do not have to accept your award. If you do not agree to the terms of your
award, you should promptly return this Notice to the Western Digital Corporation
Stock Plans Administrator.
A copy of the Plan, the Prospectus for the Plan, and the Standard Terms have
been provided to you. If you need another copy of these documents, or if you
would like to confirm that you have the most recent version, please contact the
Company's Stock Plans Administrator.
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1 The number of stock units subject to the award is subject to adjustment
under Section 7.1 of the Plan (for example, and without limitation, in
connection with stock splits).
2 The stock units covered by the award are subject to forfeiture under
Section 7 of the attached Standard Terms and Conditions for Stock Unit
Awards.
EXHIBIT 10.1
(WESTERN DIGITAL LOGO)
Western Digital Corporation 20511 Lake Forest Drive
Lake Forest, California 92630 Telephone 949 672-7000
STANDARD TERMS AND CONDITIONS FOR
STOCK UNIT AWARDS - EXECUTIVES
2004 Performance Incentive Plan
1. STOCK UNITS SUBJECT TO 2004 PERFORMANCE INCENTIVE PLAN
The Stock Unit Award (the "Award") referred to in the attached Notice of Grant
of Stock Units and Stock Unit Award Agreement (the "Notice") was awarded under
Western Digital Corporation's (the "Corporation's") Amended and Restated 2004
Performance Incentive Plan (the "Plan"). Each stock unit covered by the Award
("Stock Unit") is a non-voting unit of measurement that is deemed for
bookkeeping purposes to be equivalent to one outstanding share of Common Stock
(subject to adjustment as provided in Section 7.1 of the Plan). The holder of
the Stock Units is referred to herein as the "Participant." Stock Units shall be
used solely as a device for the determination of the number of shares of Common
Stock to eventually be delivered to the Participant if Stock Units held by such
Participant vest pursuant to Section 4, Section 7 or Section 8 and shall not be
treated as property or as a trust fund of any kind. Stock Units granted to the
Participant shall be credited to an unfunded bookkeeping account maintained by
the Corporation on behalf of the Participant (a "Stock Unit Account").
The Stock Units are subject to the terms and provisions of the Notice, these
Standard Terms and Conditions for Stock Unit Awards - Executives (these
"Standard Terms"), and the Plan. To the extent any information in the Notice,
the prospectus for the Plan, or other information provided by the Corporation
conflicts with the Plan and/or these Standard Terms, the Plan or these Standard
Terms, as applicable, shall control. To the extent any terms and provisions in
these Standard Terms conflict with the terms and provisions of the Plan, the
Plan shall control. Capitalized terms not defined herein have the meanings set
forth in the Plan.
2. AWARD AGREEMENT
The Notice and these Standard Terms, together, constitute the Award Agreement
with respect to the Award pursuant to Section 5.3 of the Plan.
3. DEFERRAL OF STOCK UNITS
Notwithstanding anything to the contrary contained herein, the Participant may
elect, on a form and in a manner provided by the Corporation, to defer the Stock
Units subject to the Award under the Corporation's Deferred Compensation Plan
(the "Deferred Compensation Plan"). If the Participant makes such a deferral
election, the Stock Units will be paid (to the extent vested) in accordance with
the payment provisions of the Deferred Compensation Plan (including without
limitation the provisions requiring a six-month payment delay in the event that
the Participant is a "specified employee" for purposes of Section 409A of the
Code), which are incorporated herein by this reference, and any applicable
deferral election made by the Participant under and in accordance with the rules
of the Deferred Compensation Plan. Whether or not the Participant elects to
defer the Stock Units, any shares of Common Stock issued or delivered with
respect to the Stock Units shall be charged against the applicable share limits
of the Plan.
4. VESTING
Except as otherwise provided in this Award Agreement, the Award shall vest and
become nonforfeitable in percentage installments of the aggregate number of
Stock Units as set forth in the Notice.
An Award may vest and become payable in connection with the occurrence of
certain events involving the Corporation as provided for in Section 7 of the
Plan. Without limiting the foregoing but subject to Sections 7.5, 7.6 and 7.7 of
the Plan, to the extent that the Award is outstanding and otherwise unvested
immediately prior to the occurrence of a Change in Control Event, the Award
shall vest and become payable as to the outstanding and otherwise unvested Stock
Units upon the occurrence of the Change in Control Event. Notwithstanding the
foregoing or anything in this Award Agreement or the Plan, if the event giving
rise to any accelerated vesting pursuant to Section 7 of the Plan is not also a
"change in control event" of the Corporation for purposes of Section 409A of the
Code, then payment with respect to the Award shall not be made until such Stock
Units would have become vested and payable without regard to this Section 4 or
Section 7 of the Plan.
The vesting schedule requires continued employment or service through each
applicable vesting date as a condition to the vesting of the applicable
installment of the Award and the rights and benefits under this Award Agreement.
Employment or service for only a portion of the vesting period, even if a
substantial portion, will not entitle the Participant to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or services as provided in Section 7 below
or under the Plan.
5. DIVIDEND EQUIVALENT RIGHTS DISTRIBUTIONS
As of any date that the Corporation pays an ordinary cash dividend on its Common
Stock, the Corporation shall credit the Participant's Stock Unit Account with an
additional number of Stock Units equal to (i) the per share cash dividend paid
by the Corporation on its Common Stock on such date, multiplied by (ii) the
number of Stock Units remaining subject to the Award as of the related dividend
payment record date, divided by (iii) the Fair Market Value of a share of Common
Stock on the date of payment of such dividend. If the Participant has not made a
deferral election with respect to the Stock Units, then the Stock Units credited
pursuant to the foregoing provisions of this Section 5 shall be subject to the
same vesting, payment and other terms, conditions and restrictions as the
original Stock Units to which they relate. If the Participant has made a
deferral election with respect to the Stock Units, then the Stock Units credited
pursuant to the foregoing provisions of this Section 5 shall be credited under,
and paid in an equivalent number of shares of Common Stock in accordance with
the payment provisions of, the Deferred Compensation Plan and any applicable
deferral election made by the Participant under and in accordance with the rules
of the Deferred Compensation Plan.
6. TIMING AND MANNER OF PAYMENT OF STOCK UNITS
Except as provided in Section 3 or 4 above, on or within fifteen (15) business
days following the vesting of any Stock Units granted (or credited pursuant to
Section 5) to the Participant (whether pursuant to Section 4 or Section 7 hereof
or Section 7 of the Plan), the Corporation shall deliver to the Participant a
number of shares of Common Stock (either by delivering one or more certificates
for such shares or by entering such shares in book entry form, as determined by
the Corporation in its sole discretion) equal to the number of Stock Units that
vest on the applicable vesting date (including any Stock Units credited as
dividend equivalents pursuant to Section 5 with respect to the Stock Units that
vest), subject to adjustment as provided in Section 7 of the Plan. The
Corporation's obligation to deliver shares of Common Stock with respect to
vested Stock Units is subject to the condition precedent that the Participant
(or other person entitled under the Plan to receive any shares with respect to
the vested Stock Units) delivers to the Corporation any representations or other
documents or assurances required pursuant to Section 8.1 of the Plan. The
Participant shall have no further rights with respect to any Stock Units that
are paid pursuant to this Section 6 or that are terminated pursuant to Section 7
hereof or Section 7 of the Plan, and such Stock Units shall be removed from the
Participant's Stock Unit Account upon the date of such payment or termination.
The Corporation may, in its sole discretion, settle any Stock Units credited as
dividend equivalents by a cash payment equal to the Fair Market Value of a share
of Common Stock on the date of payment (as opposed to payment in the form of
shares of Common Stock).
7. TERMINATION OF EMPLOYMENT
Subject to earlier vesting as provided in Section 4 and Section 8 hereof, if the
Participant ceases to be employed by or to provide services to the Corporation
or its Subsidiaries (regardless of the reason for such termination, whether with
or without cause, voluntarily or involuntarily, or due to disability), the
Participant's Stock Units shall be forfeited to the Corporation to the extent
such Stock Units have not become vested upon the date the
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Participant's employment or services terminate; provided, however, that in the
event of the Participant's death at a time when the Participant is employed by
or providing services to the Corporation or any of its Subsidiaries, a portion
of the otherwise unvested Stock Units shall automatically become fully vested as
of such date of death as set forth in the next sentence, and shall be paid to
the Participant's legal representative as provided in Section 6 above. In the
event the date of the Participant's death is at a time when the Participant is
employed by or providing services to the Corporation or any of its Subsidiaries,
the number of Stock Units that shall become vested on the date of the
Participant's death equals: (a) the number of Stock Units that would have vested
on the next scheduled vesting date applicable to the Award (as set forth in the
Notice) (the "Next Scheduled Vesting Date") had the Participant continued to be
employed through such date, multiplied by (b) a fraction (not greater than one),
the numerator of which is the number of calendar days following the last
scheduled vesting date applicable to the Award as set forth in the Notice (or,
if there was no such prior vesting date applicable to the Award, the date of
grant of the Stock Units (the "Measurement Date") through and including the date
of the Participant's death, and the denominator of which is the total number of
calendar days in the period beginning with the day after the Measurement Date
and ending with the Next Scheduled Vesting Date.
8. ADJUSTMENTS
The Administrator may accelerate payment and vesting of the Stock Units in such
circumstances as it, in its sole discretion, may determine. In addition, upon
the occurrence of certain events relating to the Corporation's stock
contemplated by Section 7.1 of the Plan, the Administrator will make adjustments
if appropriate in the number of Stock Units then outstanding and the number and
kind of securities that may be issued in respect of the Award. No such
adjustment shall be made with respect to any ordinary cash dividend for which
dividend equivalents are paid pursuant to Section 5.
9. WITHHOLDING TAXES
Upon or in connection with the vesting of the Stock Units, the payment of
dividend equivalents and/or the distribution of shares of Common Stock in
respect of the Stock Units, the Corporation (or the Subsidiary last employing
the Participant) shall have the right at its option to (a) require the
Participant to pay or provide for payment in cash of the amount of any taxes
that the Corporation or the Subsidiary may be required to withhold with respect
to such vesting, payment and/or distribution, or (b) deduct from any amount
payable to the Participant the amount of any taxes which the Corporation or the
Subsidiary may be required to withhold with respect to such vesting, payment
and/or distribution. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Award
Agreement, the Administrator may, in its sole discretion, direct the Corporation
or the Subsidiary to reduce the number of shares to be delivered by (or
otherwise reacquire) the appropriate number of whole shares, valued at their
then fair market value (with the "fair market value" of such shares determined
in accordance with the applicable provisions of the Plan), to satisfy such
withholding obligation at the minimum applicable withholding rates.
10. NONTRANSFERABILITY
Neither the Award, nor any interest therein or amount or shares payable in
respect thereof may be sold, assigned, transferred, pledged or otherwise
disposed of, alienated, encumbered, either voluntarily or involuntarily. The
transfer restrictions in the preceding sentence shall not apply to (a) transfers
to the Corporation, or (b) transfers by will or the laws of descent and
distribution.
11. NO RIGHT TO EMPLOYMENT
Nothing contained in this Award Agreement or the Plan constitutes an employment
or service commitment by the Corporation or any of its Subsidiaries, affects the
Participant's status, if he or she is an employee, as an employee at will who is
subject to termination without cause, confers upon the Participant any right to
remain employed by or in service to the Corporation or any Subsidiary,
interferes in any way with the right of the Corporation or any Subsidiary at any
time to terminate such employment or service, or affects the right of the
Corporation or any Subsidiary to increase or decrease the Participant's other
compensation.
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12. RIGHTS AS A STOCKHOLDER
Subject to the provisions of the Plan, the Notice and these Standard Terms, the
Participant shall have no rights as a stockholder of the Corporation, no
dividend rights (except as expressly provided in Section 5 with respect to
dividend equivalent rights) and no voting rights with respect to Stock Units
awarded to the Participant and any shares of Common Stock underlying or issuable
in respect of such Stock Units until such shares of Common Stock are actually
issued to and held of record by the Participant. No adjustments will be made for
dividends or other rights of a holder for which the record date is prior to the
date of issuance of the stock certificate.
13. NOTICES
Any notice to be given under the terms of this Award Agreement shall be in
writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Participant at the address last reflected
on the Corporation's payroll records, or at such other address as either party
may hereafter designate in writing to the other. Any such notice shall be
delivered in person or shall be enclosed in a properly sealed envelope addressed
as aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government. Any such notice shall be given only
when received, but if the Participant is no longer employed by the Corporation
or a Subsidiary, shall be deemed to have been duly given five business days
after the date mailed in accordance with the foregoing provisions of this
Section 13.
14. ARBITRATION
Any controversy arising out of or relating to this Award Agreement (including
these Standard Terms) and/or the Plan, their enforcement or interpretation, or
because of an alleged breach, default, or misrepresentation in connection with
any of their provisions, or any other controversy arising out of or related to
the Award, including, but not limited to, any state or federal statutory claims,
shall be submitted to arbitration in Orange County, California, before a sole
arbitrator selected from Judicial Arbitration and Mediation Services, Inc.,
Orange, California, or its successor ("JAMS"), or if JAMS is no longer able to
supply the arbitrator, such arbitrator shall be selected from the American
Arbitration Association, and shall be conducted in accordance with the
provisions of California Code of Civil Procedure Sections 1280 et seq. as the
exclusive forum for the resolution of such dispute; provided, however, that
provisional injunctive relief may, but need not, be sought by either party to
this Award Agreement in a court of law while arbitration proceedings are
pending, and any provisional injunctive relief granted by such court shall
remain effective until the matter is finally determined by the arbitrator. Final
resolution of any dispute through arbitration may include any remedy or relief
which the arbitrator deems just and equitable, including any and all remedies
provided by applicable state or federal statutes. At the conclusion of the
arbitration, the arbitrator shall issue a written decision that sets forth the
essential findings and conclusions upon which the arbitrator's award or decision
is based. Any award or relief granted by the arbitrator hereunder shall be final
and binding on the parties hereto and may be enforced by any court of competent
jurisdiction. The parties acknowledge and agree that they are hereby waiving any
rights to trial by jury in any action, proceeding or counterclaim brought by
either of the parties against the other in connection with any matter whatsoever
arising out of or in any way connected with any of the matters referenced in the
first sentence above. The parties agree that Corporation shall be responsible
for payment of the forum costs of any arbitration hereunder, including the
arbitrator's fee. The parties further agree that in any proceeding with respect
to such matters, each party shall bear its own attorney's fees and costs (other
than forum costs associated with the arbitration) incurred by it or him or her
in connection with the resolution of the dispute. By accepting the Award, the
Participant consents to all of the terms and conditions of this Award Agreement
(including, without limitation, this Section 14).
15. GOVERNING LAW
This Award Agreement, including these Standard Terms, shall be interpreted and
construed in accordance with the laws of the State of Delaware (without regard
to conflict of law principles thereunder) and applicable federal law.
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16. SEVERABILITY
If the arbitrator selected in accordance with Section 14 or a court of competent
jurisdiction determines that any portion of this Award Agreement (including
these Standard Terms) or the Plan is in violation of any statute or public
policy, then only the portions of this Award Agreement or the Plan, as
applicable, which are found to violate such statute or public policy shall be
stricken, and all portions of this Award Agreement and the Plan which are not
found to violate any statute or public policy shall continue in full force and
effect. Furthermore, it is the parties' intent that any order striking any
portion of this Award Agreement and/or the Plan should modify the stricken terms
as narrowly as possible to give as much effect as possible to the intentions of
the parties hereunder.
17. ENTIRE AGREEMENT
This Award Agreement (including these Standard Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Award Agreement may be amended pursuant to
Section 8.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Participant hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
18. SECTION HEADINGS
The section headings of this Award Agreement are for convenience of reference
only and shall not be deemed to alter or affect any provision hereof.
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