Seagate Technology plc 8-K 2009
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (date of earliest event reported): July 27, 2009
(Exact Name of Registrant as Specified in its Charter)
Registrants telephone number, including area code: (345) 949-8066
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
(b) Departure of Directors or Certain Officers.
On Monday, July 27, 2009, Donald E. Kiernan, one of our directors and the Chairman of the Audit Committee, notified the Board that he will not stand for re-election at the Companys 2009 Annual General Meeting. Mr. Kiernans decision not to stand for re-election was not the result of any disagreement with the Company. Mr. Kiernan will continue to serve as the Chairman of the Audit Committee through the completion of the Companys fiscal year end financials, at which time Albert A. Pimentel, currently a member of the Audit Committee, will assume the role of Chairman of the Audit Committee. Mr. Kiernan will continue to serve as a member of the Audit Committee until the expiration of his term.
(e) Compensatory Arrangements of Certain Officers.
On July 29, 2009, the Compensation Committee of the Board of Directors (the Compensation Committee) authorized the performance metrics and funding targets to be used for calculating annual bonus awards to each of the Companys executive officers for fiscal year 2010 under the Companys Executive Officer Performance Bonus Plan (EPB). The maximum funding level under the EPB for fiscal year 2010 is approximately 200% of the target funding level. The funding of the EPB is determined based on the Companys performance with respect to the following goals for fiscal year 2010: adjusted earnings before interest, taxes and bonus and an adjusted earnings per share goal. The adjusted earnings per share goal must be met in order for there to be any funding of the EPB. The funded amount is allocated among eligible participants in the EPB based upon their base salary and their target bonus expressed as a percentage of base salary. These fiscal year 2010 target bonus levels, expressed as a percentage of base salary (based upon their salary levels prior to the salary reductions disclosed on Form 8-K on January 14, 2009), for the companys senior executive officers (Stephen J. Luczo, Patrick OMalley, Robert W. Whitmore, William D. Mosley and D. Kurt Richarz), who will be included as the Named Executive Officers in the Companys fiscal year 2009 proxy statement, are shown in the table below.
Each individual would receive his or her target bonus, subject to discretion of the Compensation Committee to reduce such amounts, in the event that the EPB is funded at the target funding level. Additionally, the Compensation Committee has the discretion to award bonuses outside of the EPB based on outstanding individual performance. Any bonus awarded to a senior executive officer for fiscal year 2010 shall be subject to the Seagate Technology Compensation Recovery for Fraud or Misconduct Policy, which provides standards for recovering compensation from an executive officer where such compensation was based on incorrectly reported financial results due to the fraud or willful misconduct of such executive officer.
(e) Compensatory Arrangements of Certain Officers.
On July 29, 2009, the Compensation Committee, in consultation with Frederic W. Cook & Co., Inc., its independent compensation consultant, and the independent members of the Board, approved the Second Amended and Restated Seagate Technology Executive Severance and Change in Control (CIC) Plan (the Severance Plan). The Severance Plan was originally adopted by the Board on August 21, 2008, and the Board delegated administration of the Severance Plan to the Compensation Committee. The Severance Plan was first amended and restated on April 29,
2009 to implement certain administrative changes that did not affect the level of severance benefits available under the plan. In light of market pressures during the second half of fiscal year 2009, the Compensation Committee reviewed the level of benefits available under the Severance Plan in order to improve the alignment of costs and benefits with the Companys financial performance.
Under the Severance Plan, if a named executive officers employment is terminated by the Company without cause (as defined in the Severance Plan) or the named executive officer resigns with good reason (as defined in the Severance Plan), the named executive officer will be eligible to receive the following benefits:
The severance benefits will generally be paid in cash, 50% within 20 business days following the payment confirmation date (as defined in the Severance Plan) and the remainder either (i) 12 months following the payment confirmation date for named executive officers, or (ii) 6 months following the payment confirmation date for certain other senior executive officers. Severance payments payable upon a termination by the Company without cause or resignation by the executive for good reason will generally be subject to the named executive officers compliance with certain non-competition, non-solicitation and confidentiality covenants during the Severance Period.
In addition, the Severance Plan provides that in the event a named executive officer is terminated by the Company without cause or by the named executive officer for good reason during a change in control period (as defined in the Severance Plan), in lieu of the benefits described above, the named executive officer will be eligible to receive the following benefits, all of which are generally payable in cash in a lump sum within 20 business days following the payment confirmation date:
All other rights and obligations imposed under the Severance Plan upon such a termination of employment outside of the context of a change in control (as described above) are also generally applicable in the event of a change in control termination.
The foregoing summary is qualified in its entirety by reference to the Second Amended and Restated Seagate Technology Executive Severance and Change in Control (CIC) Plan filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: July 31, 2009