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EXHIBIT 10.33
WESTERN DIGITAL CORPORATION
AMENDED AND RESTATED
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
GENERAL
1.01 Adoption and Amendment. This Western Digital Corporation Amended
and Restated Stock Option Plan for Non-Employee Directors (the "PLAN") was
initially adopted by the Board of Directors (the "BOARD") of Western Digital
Corporation (the "COMPANY") as of May 15, 1985 (the initial effective date of
the Plan) subject to approval of the Company's shareholders, which was obtained
at the Annual Meeting of Shareholders held on November 15, 1985. Amendment No. 1
to the Plan was adopted by the Board as of December 6, 1985, subject to
shareholder approval, which was obtained at the Annual Meeting of Shareholders
held on November 13, 1986. Amendment No. 2 to the Plan was adopted by the Board
as of September 22, 1987, subject to shareholder approval, which was obtained at
the Annual Meeting of Shareholders held on November 19, 1987. Amendment No. 3 to
the Plan was approved by the Board without shareholder approval on November 19,
1987. Amendment No. 4 to the Plan was adopted by the Board as of September 22,
1988, subject to shareholder approval, which was obtained at the Annual Meeting
of Shareholders held on November 17, 1988. Amendment No. 5 to the Plan was
adopted by the Board as of July 27, 1989, subject to shareholder approval, which
was obtained at the Annual Meeting of Shareholders held on November 16, 1989.
Amendment No. 6 to the Plan was adopted by the Board as of July 26, 1990,
subject to shareholder approval, which was obtained at the Annual Meeting of
Shareholders held on November 15, 1990. Amendment No. 7 to the Plan was approved
by the Board without shareholder approval on May 23, 1991. Amendment No. 8 to
the Plan was approved by the Board as of July 21, 1994, subject to shareholder
approval, which was obtained at the Annual Meeting of Shareholders held on
November 10, 1994. Amendment No. 9 to the Plan was approved by the Board as of
September 7, 1995, subject to shareholder approval, which was obtained at the
Annual Meeting of Shareholders held on November 1, 1995. Amendment No. 10 to the
Plan was approved by the Board without shareholder approval on July 11, 1997 to
reflect the two-for-one stock-split effected on May 20, 1997. This Amendment and
Restatement of the Plan was approved by the Board on May 25, 2000, subject to
shareholder approval, and is effective as of that date. This Amendment and
Restatement of the Plan shall govern all options granted under the Plan after
the date of approval hereof by the Company's shareholders and all options
granted under the Plan prior to that date, subject to any required consents of
the holders of such options; prior to or in the absence of any such consent,
options granted under the Plan as amended through Amendment No. 10 thereto will
be governed by that version of the Plan.
1.02 Administration. The Plan shall be administered by the Company,
which, subject to the express provisions of the Plan, shall have the power to
construe the Plan and any agreements or memoranda defining the rights and
obligations of the Company and option recipients, to determine all questions
arising thereunder, to adopt and amend such rules and regulations for the
administration thereof as it may deem desirable, and otherwise to carry out
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the terms of the Plan and such agreements or memoranda. The interpretation and
construction by the administrator of any provisions of the Plan or of any option
granted under the Plan shall be final. Notwithstanding the foregoing, the
administrator shall have no authority or discretion as to the selection of
persons eligible to receive options granted under the Plan, the timing of such
grants, or the exercise price of options granted under the Plan, which matters
are specifically governed by the provisions of the Plan.
1.03 Eligible Directors. All members of the Board who are not employees
of the Company or any of its subsidiaries shall be eligible to receive grants of
options under the Plan (an "ELIGIBLE DIRECTOR").
1.04 Shares of Common Stock Subject to the Plan and Grant Limit. The
shares that may be issued upon exercise of options granted under the Plan shall
be authorized and unissued shares of the Company's Common Stock or previously
issued shares of the Company's Common Stock reacquired by the Company and unused
option shares pursuant to Section 2.06. The aggregate number of shares that may
be issued upon exercise of options granted under the Plan shall not exceed
2,600,000 shares of Common Stock, subject to adjustment in accordance with
Article III.
1.05 Amendment of the Plan. The Board may, insofar as permitted by law,
from time to time suspend or discontinue the Plan or revise or amend it in any
respect whatsoever, except that no such amendment shall alter or impair or
diminish any rights or obligations under any option theretofore granted under
the Plan without the consent of the person to whom such option was granted. In
addition, if an amendment to the Plan would increase the number of shares
subject to the Plan (as adjusted under Article III), change the class of persons
eligible to receive options under the Plan, provide for the grant of options
having an exercise price per option share less than the exercise price specified
in the Plan, extend the final date upon which options may be granted under the
Plan, or otherwise materially increase the benefits accruing to participants in
a manner not specifically contemplated herein or affect the Plan's compliance
with Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), the amendment shall be approved by the
Company's shareholders to the extent required to comply with Rule 16b-3 under
the Exchange Act ("RULE 16B-3"). Notwithstanding the foregoing, the Board may,
in its sole discretion, amend the Plan to change the number of options specified
in Section 2.01 and 2.02 without approval of the Company's shareholders. Under
no circumstances may the provisions of the Plan that provide for the amounts,
price, and timing of option grants be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules
thereunder. The Plan is intended to qualify as a formula plan under Rule 16b-3,
but not to impose restrictions included in the Plan for purposes of compliance
with Rule 16b-3 if those restrictions become unnecessary to compliance with Rule
16b-3. Accordingly, notwithstanding the foregoing, the administrator may
administer and amend the Plan to comply with or take advantage of changes in the
rules (or interpretations thereof) promulgated by the Securities and Exchange
Commission or its staff under Section 16 of the Exchange Act, subject to the
shareholder approval requirement described above.
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1.06 Term of Plan. Options may be granted under the Plan until the
earlier to occur of May 25, 2010 or the date of a Change in Control, as defined
in Section 3.02. In addition, no options may be granted during any suspension of
the Plan or after its termination for any reason. Notwithstanding the foregoing,
each option properly granted under the Plan shall remain in effect until such
option has been exercised or terminated in accordance with its terms and the
terms of the Plan.
1.07 Restrictions. Notwithstanding any other provision of the Plan, all
options granted under the Plan shall be subject to the requirement that, if at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to options granted under the
Plan upon any securities exchange or under any state or federal law, or the
consent or approval of any government or regulatory body or authority, is
necessary or desirable as a condition of, or in connection with, the granting of
such an option or the issuance, if any, or purchase of shares in connection
therewith, such option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.
Unless the shares of stock to be issued upon exercise of an option granted under
the Plan have been effectively registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT") as now in force or hereafter amended, the Company
shall be under no obligation to issue any shares of stock covered by any option
unless the person who exercises such option, in whole or in part, shall give a
written representation and undertaking to the Company satisfactory in form and
scope to counsel to the Company and upon which, in the opinion of such counsel,
the Company may reasonably rely, that he or she is acquiring the shares of stock
issued to him or her pursuant to such exercise of the option for his or her own
account as an investment and not with a view to, or for sale in connection with,
the distribution of any such shares of stock, and that he or she will make no
transfer of the same except in compliance with any rules and regulations in
force at the time of such transfer under the Securities Act, or any other
applicable law or regulation, and that if shares of stock are issued without
such registration, a legend to this effect may be endorsed upon the securities
so issued and the Company may order its transfer agent to stop transfer of such
shares.
1.08 Assignability. No option granted under the Plan shall be assignable
or transferable by the grantee except by will or the laws of descent and
distribution or upon dissolution of marriage pursuant to a property settlement
or domestic relations order, or as permitted on a case-by-case basis in the
discretion of, and subject to such conditions as may be imposed by, the
administrator to permit transfers to immediate family members, family trusts or
family foundations of the grantee under circumstances that would not adversely
affect the interests of the Company.
1.09 Withholding Taxes. Whenever shares of stock are to be issued upon
exercise of an option granted under the Plan, the administrator shall have the
right to require the optionee to remit to the Company an amount sufficient to
satisfy any federal, state and local withholding tax requirements prior to such
issuance. The administrator may, in the exercise of its discretion, allow
satisfaction of tax withholding requirements by accepting delivery of stock of
the Company or by withholding a portion of the stock otherwise issuable upon
exercise of an option.
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1.10 Definition of "Fair Market Value." For purposes of the Plan, the
"fair market value" of a share of stock as of a particular date shall be: (a) if
the stock is listed on an established stock exchange or exchanges (including,
for this purpose, The Nasdaq Stock Market), the last reported sale price per
share of the stock on such date on the principal exchange on which it is traded
or, if no sale was made on such date on such principal exchange, then as of the
next preceding date on which such a sale was made; or (b) if the stock is not
then listed on an exchange, the average of the closing bid and asked prices per
share for the stock in the over-the-counter market as quoted on the NASDAQ
system on such date (in the case of (a) or (b), subject to adjustment as and if
necessary and appropriate to set an exercise price not less than 100% of the
fair market value of the stock on the date an option is granted); or (c) if the
stock is not then listed on an exchange or quoted in the over-the-counter
market, an amount determined in good faith by the administrator. The fair market
value of rights or property other than stock shall be determined by the
administrator on the basis of such factors as it may deem appropriate.
1.11 Rights as a Shareholder. An optionee or a permitted transferee of
an option shall have no rights as a shareholder with respect to any shares
issuable or issued upon exercise of the option until the date of the receipt by
the Company of all amounts payable in connection with exercise of the option,
including the exercise price and any amounts required pursuant to Section 1.09.
ARTICLE II
STOCK OPTIONS
2.01 Grants of Initial Options. Each Eligible Director shall, upon first
becoming an Eligible Director, receive a one-time grant of an option to purchase
up to 75,000 shares of the Company's Common Stock, subject to adjustment as set
forth in Article III. Options granted under this Section 2.01 are "INITIAL
OPTIONS" for the purposes hereof. The exercise price per share for Initial
Options shall be equal to the fair market value of the Company's Common Stock on
the date of grant, subject to adjustment as set forth in Article III. An
Eligible Director who has received an initial grant of stock options under the
Plan or pursuant to a prior option plan for the Company's directors shall not be
eligible to receive an Initial Option.
2.02 Grants of Additional Options. Immediately following the annual
meeting of shareholders of the Company next following an Eligible Director's
becoming an Eligible Director and immediately following each subsequent annual
meeting of shareholders of the Company, in each case if the Eligible Director
has served as a director since his or her election or appointment and has been
re-elected as a director at such annual meeting, such Eligible Director shall
automatically receive an option to purchase up to 10,000 shares of the Company's
Common Stock (an "ADDITIONAL OPTION"), subject to adjustment as set forth in
Article III. For purposes of this Section 2.02 the Chairman of the Board of the
Company shall not be an Eligible Director. In addition to the Additional Options
described above, an individual who was previously an Eligible Director and
received an initial grant of stock options under the Plan or pursuant to a prior
option plan for the Company's directors, who then ceased to be a director for
any reason, and who then again becomes an Eligible Director, shall upon again
becoming an Eligible Director automatically receive an Additional Option. The
exercise price per share for all Additional Options shall be equal to the fair
market value of the Company's Common Stock on the date of grant, subject to
adjustment as set forth in Article III.
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2.03 Vesting. Initial Options and Additional Options shall vest and
become exercisable in installments equal to 25% of the shares covered by such
option on the first anniversary of the date of grant and 6 1/4% of the shares
covered by such option at the end of each of the next 12 three-month periods
thereafter. Notwithstanding the foregoing, however, but subject to Section 3.02,
(i) Initial Options and Additional Options will vest and become exercisable as
set forth herein only if the optionee has remained a director for the entire
period from the date of grant to the date specified herein for vesting, and (ii)
Initial Options and Additional Options that have not vested and become
exercisable at the time the optionee ceases to be a director shall terminate,
except that if an optionee has served as a director for at least 48 months and
is at least 55 years old upon retirement from the Company (a "RETIRED
DIRECTOR"), all unvested Initial Options and Additional Options of such Retired
Director will immediately vest and become exercisable.
2.04 Exercise. No option shall be exercisable except in respect of whole
shares, and fractional share interests shall be disregarded. Not less than 100
shares of stock (or such other amount as is set forth in the applicable option
agreement or confirming memorandum) may be purchased at one time unless the
number purchased is the total number at the time available for purchase under
the terms of the option. An option shall be deemed to be exercised when the
Secretary or other designated official of the Company receives written notice of
such exercise from or on behalf of the optionee, together with payment of the
exercise price and any amounts required under Section 1.09. The option exercise
price shall be payable upon the exercise of an option in legal tender of the
United States or capital stock of the Company delivered in transfer to the
Company by or on behalf of the person exercising the option (duly endorsed in
blank or accompanied by stock powers duly endorsed in blank, with signatures
guaranteed in accordance with the Exchange Act if required by the administrator)
or retained by the Company from the stock otherwise issuable upon exercise or
surrender of vested and exercisable options granted to the recipient and being
exercised (in either case valued at fair market value as of the exercise date),
or such other consideration as the administrator may from time to time in the
exercise of its discretion deem acceptable in any particular instance, provided,
however, that the administrator may, in the exercise of its discretion, (a)
allow exercise of an option in a broker-assisted or similar transaction in which
the exercise price is not received by the Company until promptly after exercise,
and/or (b) allow the Company to loan the exercise price to the person entitled
to exercise the option, if the exercise will be followed by a prompt sale of
some or all of the underlying shares and a portion of the sales proceeds is
dedicated to full payment of the exercise price and amounts required pursuant to
Section 1.09.
2.05 Option Agreements or Memoranda. Each option granted under the Plan
shall be evidenced by an option agreement duly executed on behalf of the Company
and by the Eligible Director to whom such option is granted or, in the
administrator's discretion, a confirming memorandum issued by the Company to the
recipient, stating the number of shares of stock issuable upon exercise of the
option and the exercise price, and setting forth explicitly or by reference to
the Plan the time during which the option is exercisable and the times at which
the options vest and become exercisable. Such option agreements or confirming
memoranda may but need not be identical and shall comply with and be subject to
the terms and conditions of the Plan, a copy of which shall be provided to each
option recipient and incorporated by reference into each option agreement or
confirming memorandum. Any option agreement or confirming memorandum may contain
such other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the administrator.
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2.06 Term of Options and Effect of Termination. Notwithstanding any
other provision of the Plan, no option granted under the Plan shall be
exercisable after the expiration of ten years from the effective date of its
grant. In the event that any outstanding option under the Plan expires by reason
of lapse of time or is otherwise terminated without exercise for any reason,
then the shares of Common Stock subject to such option that have not been issued
upon exercise of the option shall again become available in the pool of shares
of Common Stock for which options may be granted under the Plan. In the event
that the recipient of any options granted under the Plan shall cease to be a
director of the Company for any reason, and subject to Section 3.02, all Initial
Options and Additional Options granted under the plan to such recipient shall be
exercisable, to the extent they are already exercisable at the date such
recipient ceases to be a director, for a period of 365 days after that date (or,
if sooner, until the expiration of the option according to its terms), and shall
then terminate. Notwithstanding the preceding sentence, a Retired Director's
Initial Options and Additional Options shall be exercisable until the earlier of
three years from the effective date of retirement from the Company or expiration
of the term of any such option (the "EXERCISE PERIOD"), provided, however, that
if the Board determines that such Retired Director rendered services as an
employee, director, consultant, contractor or otherwise to a competitor of the
Company during the Exercise Period, then (i) any outstanding Initial Options and
Additional Options shall immediately terminate on the date of the Board's
determination that such Retired Director rendered services to a competitor, and
(ii) the Company shall have the right to recover from such Retired Director any
profits realized upon the exercise of Initial Options and Additional Options
during the six (6) month period before the termination date set forth in (i)
above. For this purpose, profits shall be defined as the difference between the
exercise price of the Initial Options and Additional Options exercised during
such period and the fair market value of the Company's Common Stock on the date
of exercise. In the event of the death of an optionee while such optionee is a
director of the Company or within the period after termination of such status
during which he or she is permitted to exercise an option, such option may be
exercised by any person or persons designated by the optionee on a beneficiary
designation form adopted by the administrator for such purpose or, if there is
no effective beneficiary designation form on file with the Company, by the
executors or administrators of the optionee's estate or by any person or persons
who shall have acquired the option directly from the optionee by his or her will
or the applicable laws of descent and distribution.
2.07 One-Time Grant of Options. Subject to shareholder approval, each
Eligible Director as of May 25, 2000 shall receive a one-time grant of an option
covering 50,000 shares of the Company's Common Stock, subject to adjustment as
set forth in Article III. All options granted under this Section 2.07 shall be
deemed Initial Options under the Plan. The exercise price per share of these
Initial Options shall be equal to the fair market value of the Company's Common
Stock on the date of grant, subject to adjustment as set forth in Article III.
The grant of Initial Options under this Section 2.07 is intended to eliminate
the disparity in the number of Initial Options previously granted to Eligible
Directors under the Plan with the number of Initial Options granted to Eligible
Directors under the Plan, as amended.
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ARTICLE III
CORPORATE TRANSACTIONS
3.01 Anti-dilution Adjustments. The number of shares of Common Stock
available for issuance upon exercise of options granted under the Plan, the
number of shares for which each outstanding option can be exercised, the number
of shares underlying an Initial Option, the number of shares underlying an
Additional Option, and the exercise price per share of options shall be
appropriately and proportionately adjusted for any increase or decrease in the
number of issued and outstanding shares of Common Stock resulting from a
subdivision or consolidation of shares or the payment of a stock dividend or any
other increase or decrease in the number of issued and outstanding shares of
capital stock of the Company effected without receipt of consideration by the
Company. No fractional interests will be issued under the Plan resulting from
any such adjustments.
3.02 Reorganizations; Mergers; Changes in Control. Subject to the other
provisions of this Section 3.02, if the Company shall consummate any
reorganization or merger or consolidation in which holders of shares of the
Company's Common Stock are entitled to receive in respect of such shares any
other consideration (including, without limitation, a different number of such
shares), each option outstanding under the Plan shall thereafter be exercisable,
in accordance with the Plan, only for the kind and amount of securities, cash
and/or other property receivable upon such reorganization or merger or
consolidation by a holder of the same number of shares of Common Stock as are
subject to that option immediately prior to such reorganization or merger or
consolidation, and any appropriate adjustments will be made to the exercise
price thereof. In addition, if a Change in Control occurs and in connection with
such Change in Control any recipient of an option granted under the Plan ceases
to be a director of the Company, then such recipient shall have the right to
exercise his or her options granted under the Plan in whole or in part during
the applicable time period provided in Section 2.06 without regard to any
vesting requirements. For purposes hereof, but without limitation, a director
will be deemed to have ceased to be a director of the Company in connection with
a Change in Control if such director (i) is removed by or resigns upon request
of a Person (as defined in paragraph (a) below) exercising practical voting
control over the Company following the Change in Control or a person acting upon
authority or at the instruction of such Person, or (ii) is willing and able to
continue as a director of the Company but is not re-elected to or retained on
the Board by the Company's shareholders through the shareholder vote or consent
action for election of directors that precedes and is taken in connection with,
or next follows, the Change in Control. For purposes hereof, a "CHANGE IN
CONTROL" means the following and shall be deemed to occur if any of the
following events occurs:
(a) Any person, entity or group, within the meaning of Section 13(d)
or 14(d) of the Exchange Act, but excluding the Company and its subsidiaries and
any employee benefit or stock ownership plan of the Company or its subsidiaries
and also excluding an underwriter or underwriting syndicate that has acquired
the Company's securities solely in connection with a public offering thereof
(such person, entity or group being referred to herein as a "PERSON"), becomes
the beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of either the then outstanding shares of Common
Stock or the combined voting power of the Company's then outstanding securities
entitled to vote generally in the election of directors; or
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(b) Individuals who, as of the effective date hereof, constitute the
Board cease for any reason to constitute at least a majority of the Board,
provided that any individual who becomes a director after the effective date
hereof whose election, or nomination for election by the Company's shareholders,
is approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered to be a member of the Incumbent Board
unless that individual was nominated or elected by any Person having the power
to exercise, through beneficial ownership, voting agreement and/or proxy, 20% or
more of either the then outstanding shares of Common Stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors, in which case that individual shall
not be considered to be a member of the Incumbent Board unless such individual's
election or nomination for election by the Company's shareholders is approved by
a vote of at least two-thirds of the directors then comprising the Incumbent
Board; or
(c) Consummation by the Company of the sale or other disposition by
the Company of all or substantially all of the Company's assets or a
reorganization or merger or consolidation of the Company with any other person,
entity or corporation, other than
(i) a reorganization or merger or consolidation that would
result in the voting securities of the Company outstanding immediately prior
thereto (or, in the case of a reorganization or merger or consolidation that is
preceded or accomplished by an acquisition or series of related acquisitions by
any Person, by tender or exchange offer or otherwise, of voting securities
representing 5% or more of the combined voting power of all securities of the
Company, immediately prior to such acquisition or the first acquisition in such
series of acquisitions) continuing to represent, either by remaining outstanding
or by being converted into voting securities of another entity, more than 50% of
the combined voting power of the voting securities of the Company or such other
entity outstanding immediately after such reorganization or merger or
consolidation (or series of related transactions involving such a reorganization
or merger or consolidation), or
(ii) a reorganization or merger or consolidation effected to
implement a recapitalization or reincorporation of the Company (or similar
transaction) that does not result in a material change in beneficial ownership
of the voting securities of the Company or its successor; or
(d) Approval by the shareholders of the Company or an order by a
court of competent jurisdiction of a plan of liquidation of the Company.
3.03 Determination by the Company. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the administrator, whose determination in that respect shall be
final, binding and conclusive. The grant of an option pursuant to the Plan shall
not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve, or liquidate or to sell or
transfer all or any part of its business or assets.
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