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This excerpt taken from the WDC DEF 14A filed Dec 15, 2006. Stock
Incentive Plans and Deferred Compensation Plan
Subject to certain conditions or restrictions as described in
our stock incentive plans, our stock incentive plans generally
provide for the acceleration of the vesting of awards granted
thereunder in the event of certain change of control events
described in the plans. In these circumstances, each option may
become immediately exercisable and each restricted stock or
stock unit award may immediately vest. Further, under our
Deferred Compensation Plan, in the event of certain change of
control events described in the plan, contribution and deferral
amounts will immediately vest (to the extent unvested) and will
become payable to the participants as provided in the plan.
Table of Contents
This excerpt taken from the WDC 10-K filed Nov 20, 2006. Stock
Incentive Plans and Deferred Compensation Plan
Subject to certain conditions or restrictions as described in
our stock incentive plans, these stock incentive plans generally
provide for the acceleration of the vesting of awards granted
thereunder in the event of certain change of control events
described in the plans. In these circumstances, each option may
become immediately exercisable and each restricted stock or
stock unit award may immediately vest. Further, under our
Deferred Compensation Plan, in the event of certain change of
control events described in the plan, contribution and deferral
amounts will immediately vest (to the extent unvested) and will
become payable to the participants as provided in the plan.
Broad-Based
Stock Incentive Plan
On September 30, 1999, our Board of Directors approved the
Broad-Based Stock Incentive Plan under which options to purchase
2,578,753 shares of our common stock were outstanding as of
June 30, 2006 and 220,956 shares of restricted stock
remained unvested as of June 30, 2006. This plan was
intended to qualify as “broadly-based” under the New
York Stock Exchange stockholder approval policy at the time of
its adoption and was not submitted to our stockholders for
approval. Following approval of the 2004 Performance Incentive
Plan by our stockholders in November 2004, no new awards are
permitted under the Broad-Based Incentive Plan after such date
and, therefore, no shares remain available for grant under the
plan.
None of the stock options that we granted under the plan are
incentive stock options under Section 422 of the Internal
Revenue Code and the term of each outstanding option granted
under the plan will not exceed ten years from the date of its
grant. All unvested shares of restricted common stock that we
awarded under the plan are subject to time-based vesting
requirements. All of such shares of restricted stock will vest
on or before September 21, 2008 unless such shares are
earlier forfeited as required by the plan or by an agreement
evidencing the award made under the plan.
The Compensation Committee of our Board of Directors administers
the Broad-Based Stock Incentive Plan. The committee has broad
discretionary authority to construe and interpret the plan. The
committee may in its discretion provide financing to a
participant in a principal amount sufficient to pay the purchase
price of any award
and/or to
pay the amount of taxes required by law to be withheld with
respect to any award. Any such loan must be subject to all
applicable legal requirements and restrictions pertinent
thereto. Further, the committee may, through the terms of the
award or otherwise, provide for lapse of restrictions on an
option or restricted stock award, either immediately upon a
change of control of Western Digital (as defined in the plan),
or upon termination of the eligible employee’s employment
within 24 months following a change of control. The
committee may also provide for the exercise, payment or lapse of
restrictions on an award that is only effective if no provision
is made in the change of control transaction.
The Board of Directors or the Compensation Committee, subject to
rules of the New York Stock Exchange requiring stockholder
approval, may amend, alter or discontinue agreements evidencing
an award made under the plan. These amendments may include:
(i) reducing the exercise price of outstanding options; or
(ii) after the date of a change of control, impairing the
rights of any award holder, without such holder’s consent,
under any award granted prior to the date of any change of
control. No award, or any interest in an award may be
transferred in any manner, other than by will or the laws of
descent and distribution, unless the agreement evidencing an
award expressly states that it is transferable.
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