Western Digital (WDC)

 

Mr. Coyne.  On October 31, 2006, we entered into an employment agreement with Mr. Coyne that provided for his promotion to President and Chief Executive Officer effective January 2, 2007. In accordance with the agreement, on January 2, 2007, Mr. Coyne’s annual base salary increased to $800,000, his target bonus award under our semi-annual Incentive Compensation Plan increased to 100% of his semi-annual base salary and he became entitled to participate in our other benefit plans on terms consistent with those generally applicable to our other senior executives.

 

Under the agreement, Mr. Coyne also received two long-term performance cash awards, each of which provide for a cash bonus opportunity with a target amount of $1,000,000. One cash award covers the performance period July 1, 2006 through June 29, 2007 and is subject to our achievement of specified operating income and revenue goals that correspond to specific payment percentages ranging between 0% and 200%. The second cash award covers the performance period July 1, 2006 through June 27, 2008 and is also subject to our achievement of specified operating income and revenue goals that correspond to specific payment percentages ranging between 0% and 200%. In addition, each year during Mr. Coyne’s employment with us as President and Chief Executive Officer commencing in fiscal 2008, Mr. Coyne will receive a long-term performance cash award providing for a cash opportunity with a target amount of at least $2,000,000. These subsequent long-term performance cash awards will be based on a 24-month performance period and will be subject to the achievement of performance objectives to be established by our Compensation Committee. See “Non-Equity Incentive Plan Compensation and Awards” below for a further description of our long-term performance cash awards to our named executive officers.

 

On January 31, 2007, in accordance with his agreement, Mr. Coyne also received an award of 1,100,000 restricted stock units. Subject to Mr. Coyne’s continued employment with us, these units will vest and become payable in an equivalent number of shares of our common stock as follows: 110,000 units on January 1, 2008, 110,000 units on January 1, 2009, 330,000 units on January 1, 2010, 110,000 units on January 1, 2011 and 440,000 units on January 1, 2012. Also on January 31, 2007, Mr. Coyne received a stock option to purchase 120,000 shares of our common stock. The exercise price per share of the option equals the closing market price of our common stock on the January 31, 2007 grant date of the option. In addition, in each of our four fiscal years commencing with fiscal 2008, Mr. Coyne will receive a stock option to purchase additional shares of our common stock. The number of shares subject to these stock options will be determined in the good faith discretion of our Compensation Committee based on Mr. Coyne’s individual performance, our performance and market benchmark comparisons of compensation data for chief executive officers against both peer group and general industry survey data.

 

Our employment agreement with Mr. Coyne expires January 1, 2012, subject to certain termination provisions. For a description of these termination provisions and additional information regarding the severance benefits to which Mr. Coyne is entitled under his employment agreement with us, see “Potential Payments upon Termination or Change in Control” below.

 

Mr. Shakeel.  On August 25, 2005, we entered into an employment agreement with Mr. Shakeel pursuant to which he became President and Chief Executive Officer on October 1, 2005. We subsequently amended this agreement on October 31, 2006 in connection with Mr. Coyne’s succession to Chief Executive Officer and Mr. Shakeel’s agreement to continue as Special Advisor to the Chief Executive Officer from January 2, 2007 through June 29, 2007. During the entire period of Mr. Shakeel’s employment with us under the agreement, Mr. Shakeel received an annual base salary of $800,000, his target bonus award under our semi-annual Incentive Compensation Plan was 100% of his semi-annual base salary through the six-month performance period ended June 29, 2007, and he was entitled to participate in our other benefit plans on terms consistent with those generally applicable to our other senior executives.

 

In addition, pursuant to the agreement, Mr. Shakeel received an award of 1,250,000 shares of restricted stock on August 25, 2005. An aggregate of 500,000 shares subject to this award vested on January 1, 2007. In accordance with our amendment of Mr. Shakeel’s employment agreement, on October 31, 2006, we agreed to accelerate the vesting of an additional 659,200 shares subject to this award that were originally scheduled to vest on January 1, 2008 to June 29, 2007, and we cancelled the remaining 90,800 shares that were subject to this award. We also agreed to accelerate to June 29, 2007 the vesting of 158,333 shares subject to a restricted stock award we previously granted