Exhibit 10.1
Maxtor Corporation
2005 Performance Incentive Plan
Effective May 13, 2005

 

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Contents

         
Article 1. Establishment, Purpose, and Duration
    1  
Article 2. Definitions
    1  
Article 3. Administration
    8  
Article 4. Shares Subject to this Plan and Maximum Awards
    10  
Article 5. Eligibility and Participation
    12  
Article 6. Stock Options
    12  
Article 7. Stock Appreciation Rights
    14  
Article 8. Restricted Stock and Restricted Stock Units
    16  
Article 9. Performance Awards
    18  
Article 10. Cash-Based Awards and Other Stock-Based Awards
    20  
Article 11. Transferability of Awards
    21  
Article 12. Performance Measures and Performance Goals
    22  
Article 13. Nonemployee Director Awards
    24  
Article 14. Dividend Equivalent Rights
    24  
Article 15. Beneficiary Designation
    24  
Article 16. Rights of Participants
    25  
Article 17. Change in Control
    25  
Article 18. Amendment, Modification, Suspension, and Termination
    27  
Article 19. Tax Withholding
    27  
Article 20. Successors
    28  
Article 21. Compliance with Code Section 409A
    28  
Article 22. General Provisions
    31  

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Maxtor Corporation
2005 Performance Incentive Plan
Article 1. Establishment, Purpose, and Duration
     1.1 Establishment. Maxtor Corporation, a Delaware corporation (hereinafter
referred to as the “Company”), establishes an incentive compensation plan to be
known as the 2005 Performance Incentive Plan (hereinafter referred to as the
“Plan”), as set forth in this document.
     This Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards, and Other Stock-Based
Awards.
     This Plan shall become effective upon stockholder approval (the “Effective
Date”) and shall remain in effect as provided in Section 1.3 hereof.
     1.2 Purpose of this Plan. The purpose of this Plan is to provide a means
whereby Employees, Directors, and Third Party Service Providers of the Company
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to devote their best
efforts to the business of the Company, thereby advancing the interests of the
Company and its stockholders. A further purpose of this Plan is to provide a
means through which the Company may attract able individuals to become Employees
or serve as Directors or Third Party Service Providers of the Company and to
provide a means whereby those individuals upon whom the responsibilities of the
successful administration and management of the Company rest can acquire and
maintain stock ownership, thereby strengthening their concern for the welfare of
the Company.
     1.3 Duration of this Plan. Unless sooner terminated as provided herein,
this Plan shall terminate ten (10) years from the Effective Date. After this
Plan is terminated, no Awards may be granted, but Awards previously granted
shall remain outstanding in accordance with their applicable terms and
conditions and this Plan’s terms and conditions.
Article 2. Definitions
     Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized.

  2.1   “Affiliate” means (a) an entity that directly, or indirectly through one
or more intermediary entities, controls the Company, (b) an entity that is
controlled by the Company directly, or indirectly through one or more
intermediary entities, or (c) except for the offer and sale pursuant to the Plan
of securities registered on Form S-8 under the Securities Act of 1933, an entity
that directly, or indirectly through one or more intermediary entities, is under
common control with the Company. For this purpose, the term “control” (including
the terms “controlled by” and “under common control with”) means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of the relevant entity, whether through the ownership of
voting securities, by contract or otherwise.

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  2.2   “Annual Award Limit” or “Annual Award Limits” have the meaning set forth
in Section 4.3.     2.3   “Award” means, individually or collectively, a grant
under this Plan of Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
Cash-Based Awards, or Other Stock-Based Awards, in each case subject to the
terms of this Plan.     2.4   “Award Agreement” means either (a) a written or
electronic agreement entered into by the Company and a Participant setting forth
the terms and conditions applicable to an Award granted under this Plan, or
(b) a written or electronic statement issued by the Company to a Participant
describing the terms and conditions of such Award.     2.5   “Beneficial Owner”
or “Beneficial Ownership” shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.     2.6
  “Board” or “Board of Directors” means the Board of Directors of the Company.  
  2.7   “Cash-Based Award” means an Award granted to a Participant as described
in Article 10.     2.8   “Change in Control” means the occurrence of any of the
following events:     (a)   Any Person becomes the Beneficial Owner of more than
fifty percent (50%) of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
Directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this Section 2.8, the following acquisitions shall not
constitute a Change in Control: (i) any acquisition by a Person who on the
Effective Date is the Beneficial Owner of more than fifty percent (50%) of the
Outstanding Company Voting Securities, (ii) any acquisition directly from the
Company, including without limitation, a public offering of securities,
(iii) any acquisition by the Company, (iv) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its subsidiaries, or (v) any acquisition by any corporation pursuant to a
transaction which complies with subparagraphs (i), (ii), and (iii) of
Section 2.8(c);     (b)   A change in the composition of the Board within any
twelve-month period, as a result of which individuals who constitute the Board
as of the Effective Date (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, provided that any individual
becoming a Director subsequent to the Effective Date whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the Directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election or removal of the Directors of the Company or other actual or
threatened solicitation of proxies of consents by or on behalf of a Person other
than the Board;

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  (c)   Consummation of a reorganization, merger, or consolidation to which the
Company is a party or a sale or other disposition of assets of the Company (the
“Transferred Assets”) that have a total gross fair market value equal to more
than fifty percent (50%) of the total gross fair market value of all of the
assets of the Company immediately prior to such sale or disposition (each such
event, a “Business Combination”), in each case unless, following such Business
Combination: (i) all or substantially all of the individuals and entities who
were the Beneficial Owners of Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of the combined voting power of the outstanding
voting securities entitled to vote generally in the election of directors of the
corporation resulting from the Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company
or the Transferred Assets either directly or through one or more subsidiaries)
(the “Successor Entity”) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the Outstanding
Company Voting Securities; and (ii) no Person (excluding any Successor Entity or
any employee benefit plan, or related trust, of the Company or such Successor
Entity) beneficially owns, directly or indirectly, more than fifty percent (50%)
of the combined voting power of the then outstanding voting securities of the
Successor Entity, except to the extent that such ownership existed prior to the
Business Combination; and (iii) at least a majority of the members of the board
of directors of the Successor Entity were members of the Incumbent Board
(including persons deemed to be members of the Incumbent Board by reason of the
proviso to paragraph (b) of this Section 2.8) at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or     (d)   Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.     2.9   “Code” means the
U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes
of this Plan, references to sections of the Code shall be deemed to include
references to any applicable regulations thereunder and any successor or similar
provision.     2.10   “Committee” means the Compensation Committee of the Board
or a subcommittee thereof, or any other committee designated by the Board to
administer this Plan. The members of the Committee shall be appointed from time
to time by and shall serve at the discretion of the Board. If no committee of
the Board has been appointed or is qualified to administer the Plan, the Board
shall exercise all of the powers of the Committee granted herein, and, in any
event, the Board may in its discretion exercise any or all of such powers.    
2.11   “Company” means Maxtor Corporation, a Delaware corporation, and any
successor thereto as provided in Article 20.     2.12   “Covered Employee” means
any Employee who is or may become a “covered employee,” as defined in Code
Section 162(m), or any successor statute, and who is designated, either as an
individual Employee or class of Employees, by the Committee no

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      later than the earlier of (i) the date ninety (90) days after the
beginning of the Performance Period, or (ii) the date on which twenty-five
percent (25%) of the Performance Period has elapsed, as a “Covered Employee”
under this Plan for such applicable Performance Period.     2.13   “Director”
means any individual who is a member of the Board of Directors of the Company.  
  2.14   “Dividend Equivalent Right” mean the right of a Participant, granted at
the discretion of the Committee or as otherwise provided by the Plan, to receive
a credit for the account of such Participant in an amount equal to the cash
dividends paid on one Share represented by an Award held by such Participant.  
  2.15   “Effective Date” has the meaning set forth in Section 1.1.     2.16  
“Employee” means any person designated as an employee on the payroll records of
the Company or an Affiliate. An Employee shall not include any individual during
any period he or she is classified or treated by the Company and/or an Affiliate
as an independent contractor, a consultant, or any employee of an employment,
consulting, or temporary agency or any other entity other than the Company or an
Affiliate, without regard to whether such individual is subsequently determined
to have been, or is subsequently retroactively reclassified as a common-law
employee of the Company or an Affiliate during such period.     2.17   “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time, or
any successor act thereto.     2.18   “Fair Market Value” or “FMV” means a price
that is based on the opening, closing, actual, high, low, or average selling
prices of a Share reported on the New York Stock Exchange or other established
stock exchange (or exchanges) or market system on the applicable date, the
preceding trading day, the next succeeding trading day, or an average of trading
days, as determined by the Committee in its discretion. Unless the Committee
determines otherwise, if the Shares are traded on the New York Stock Exchange or
the NASDAQ National Market System at the time a determination of the Fair Market
Value of a Share is required to be made hereunder, its Fair Market Value shall
be deemed to be equal to the closing sale price of a Share on the applicable
date (or on the most recent trading day if the Shares were not traded on the
applicable date). In the event Shares are not publicly traded at the time a
determination of their value is required to be made hereunder, the determination
of their Fair Market Value shall be made by the Committee in such manner as it
deems appropriate. Such definition(s) of FMV may be specified in each Award
Agreement and may differ depending on whether FMV is in reference to the grant,
exercise, vesting, settlement, or payout of an Award. The “Fair Market Value” of
property other than Shares shall be a value determined by the Committee, in its
discretion.     2.19   “Freestanding SAR” means an SAR that is granted
independently of any Options, as described in Article 7.

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  2.20   “Full Value Award” means an Award other than in the form of an ISO,
NQSO, or SAR, and which is settled by the issuance of Shares.     2.21   “Grant
Price” means the price established at the time of grant of an SAR and used to
determine whether there is any payment due upon exercise of the SAR.     2.22  
“Incentive Stock Option” or “ISO” means an Option to purchase Shares granted
under Article 6 to an Employee, that is designated as an Incentive Stock Option
and that is intended to meet the requirements of Code Section 422.     2.23  
“Insider” means an individual who is, on the relevant date, an officer, or
Director of the Company, or a more than ten percent (10%) Beneficial Owner of
any class of the Company’s equity securities that is registered pursuant to
Section 12 of the Exchange Act, as determined by the Board in accordance with
Section 16 of the Exchange Act.     2.24   “Nonemployee Director” means a
Director who is not an Employee.     2.25   “Nonemployee Director Award” means
any NQSO, SAR, or Full Value Award granted pursuant to Article 13, whether
singly, in combination, or in tandem, to a Participant who is a Nonemployee
Director pursuant to such applicable terms, conditions, and limitations as the
Board or Committee may establish in accordance with this Plan.     2.26  
“Nonqualified Stock Option” or “NQSO” means an Option that is not intended to
meet the requirements of Code Section 422 or that otherwise does not meet such
requirements.     2.27   “Option” means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Article 6.     2.28   “Option Price”
means the price at which a Share may be purchased by a Participant pursuant to
an Option.     2.29   “Other Stock-Based Award” means an equity-based or
equity-related Award not otherwise described by the terms of this Plan, granted
pursuant to Article 10.     2.30   “Participant” means any eligible individual
as set forth in Article 5 to whom an Award is granted.     2.31   “Performance
Award” means an Award of Performance Units or Performance Shares.     2.32  
“Performance Award Formula” means, for any Performance Award, a formula or table
established by the Committee pursuant to Article 9 which provides the basis for
computing the value of a Performance Award at one or more threshold levels of
attainment of the applicable performance goal(s) measured as of the end of the
applicable Performance Period.

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  2.33   “Performance-Based Compensation” means compensation under an Award that
satisfies the requirements of Code Section 162(m) for certain performance-based
compensation paid to Covered Employees.     2.34   “Performance Measures” mean
one or more measures of business or financial performance described in
Article 12 which are approved by the Company’s stockholders pursuant to this
Plan in order to qualify compensation payable under Awards based upon the
attainment of performance goals established with respect to such Performance
Measures as Performance-Based Compensation.     2.35   “Performance Period”
means the period of time at the end of which the attainment of one or more
performance goals is measured in order to determine the extent of the vesting of
an Award or the amount of the payment to be made upon the settlement of an
Award.     2.36   “Performance Share” means a bookkeeping unit granted to a
Participant pursuant to an Award described in Article 9, representing the right
to receive a value denominated in Shares and in an amount, determined at the
time such unit becomes payable, which is a function of the extent to which one
or more performance goals established with respect to the Award have been
achieved.     2.37   “Performance Unit” means a bookkeeping unit granted to a
Participant pursuant to an Award described in Article 9, representing the right
to receive a value denominated in money and in an amount, determined at the time
such unit becomes payable, which is a function of the extent to which one or
more performance goals established with respect to the Award have been achieved.
    2.38   “Period of Restriction” means the period when Restricted Stock or
Restricted Stock Units are subject to a substantial risk of forfeiture (based on
the passage of time, the achievement of performance goals, or upon the
occurrence of other events as determined by the Committee, in its discretion),
as provided in Article 8.     2.39   “Person” shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a “group” as defined in Section 13(d) thereof.     2.40
  “Plan” means the Maxtor Corporation 2005 Performance Incentive Plan.     2.41
  “Plan Year” means the Company’s fiscal year, as adopted from time to time.    
2.42   “Predecessor Plans” mean the Company’s Amended and Restated 1996 Stock
Option Plan, 1998 Restricted Stock Plan and the options granted by Quantum
Corporation and assumed by the Company in connection with its acquisition in
2001 of the Quantum Corporation hard drive business.     2.43   “Restricted
Stock” means one or more Shares granted to a Participant pursuant to an Award
described in Article 8.

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  2.44   “Restricted Stock Unit” means a bookkeeping unit granted to a
Participant pursuant to an Award described in Article 8, representing the right
to receive one Share or its equivalent in cash at a date following the date of
grant.     2.45   “Service” means a Participant’s employment or service with the
Company or an Affiliate as an Employee, a Nonemployee Director or a Third Party
Service Provider, whichever such capacity the Participant held on the date of
grant of the applicable Award or, if later, the date on which the Participant’s
Service commenced. Except as otherwise determined by the Committee, a
Participant’s Service shall be deemed to have terminated if the Participant
ceases to render Service in such initial capacity. A Participant’s Service shall
not be deemed to have terminated merely because of a change in the entity within
the group consisting of the Company and its Affiliates described in clauses
(a) and (b) of Section 2.1 for which the Participant renders Service in such
initial capacity, provided that there is no interruption or termination of the
Participant’s Service. However, except as otherwise determined by the Committee,
a Participant’s Service shall be deemed to have terminated if the Participant
ceases to render Service to an entity described in clauses (a) and (b) of
Section 2.1 and commences rendering Service to an entity described in clause
(c) of Section 2.1. A Participant’s Service shall not be deemed to have
terminated if the Participant takes any military leave, sick leave, or other
bona fide leave of absence approved by the Company. However, if any such leave
taken by a Participant exceeds ninety (90) days, then on the ninety-first (91st)
day following the commencement of such leave the Participant’s Service shall be
deemed to have terminated unless the Participant’s right to return to Service is
guaranteed by statute or contract. Notwithstanding the foregoing, unless
otherwise designated by the Company or required by law, a leave of absence shall
not be treated as Service for purposes of determining vesting under the
Participant’s Award Agreement. A Participant’s Service shall be deemed to have
terminated either upon an actual termination of Service or upon the entity to
which the Participant renders Service ceasing to be within the group consisting
of the Company and its Affiliates described in clauses (a) and (b) of Section
2.1. Subject to the foregoing, the Company, in its discretion, shall determine
whether the Participant’s Service has terminated and the effective date of such
termination.     2.46   “Share” means a share of common stock of the Company.  
  2.47   “Stock Appreciation Right” or “SAR” means a bookkeeping unit granted to
a Participant pursuant to an Award described in Article 7, representing the
right to receive payment of an amount equal to the excess, if any, of the Fair
Market Value of a Share on the date of exercise of such Award over the Grant
Price with respect to such Award.     2.48   “Tandem SAR” means an SAR that is
granted in connection with a related Option pursuant to Article 7, the exercise
of which shall require forfeiture of the right to purchase a Share under the
related Option (and when a Share is purchased under the Option, the Tandem SAR
shall similarly be canceled).     2.49   “Ten Percent Owner” means a Participant
who, at the time an Option is granted to the Participant, owns stock possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any parent or subsidiary corporation within the
meaning of Code Section 422(b)(6).

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  2.50   “Third Party Service Provider” means any consultant, agent, advisor, or
independent contractor who renders Service to the Company or an Affiliate that
(a) is not in connection with the offer and sale of the Company’s securities in
a capital raising transaction and (b) does not directly or indirectly promote or
maintain a market for the Company’s securities.

Article 3. Administration
     3.1 General. The Committee shall be responsible for administering this
Plan, subject to this Article 3 and the other provisions of this Plan. The
Committee may employ attorneys, consultants, accountants, agents, and other
individuals, any of whom may be an Employee, and the Committee, the Company, and
its officers and Directors shall be entitled to rely upon the advice, opinions,
or valuations of any such individuals. The Committee shall have full and
exclusive discretionary power to interpret the terms and the intent of this Plan
and any Award Agreement or other agreement or document ancillary to or in
connection with this Plan. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested individuals.
     3.2 Authority of the Committee. In addition to any other powers set forth
in the Plan and subject to the provisions of the Plan, the Committee shall have
the full and final power and authority, in its discretion:

  (a)   to determine eligibility for Awards, the persons to whom, and the time
or times at which, Awards shall be granted and the number of Shares, units or
monetary value to be subject to each Award;     (b)   to determine the type of
Award granted;     (c)   to determine the Fair Market Value of Shares or other
property;     (d)   to determine the terms, conditions and restrictions
applicable to each Award (which need not be identical) and any Shares acquired
pursuant thereto, including, without limitation, (i) the Grant Price, Option
Price or purchase price of Shares pursuant to any Award, (ii) the method of
payment for Shares purchased pursuant to any Award, (iii) the method for
satisfaction of any tax withholding obligation arising in connection with Award,
including by the withholding or delivery of Shares, (iv) the timing, terms and
conditions of the exercisability or vesting of any Award or any Shares acquired
pursuant thereto, (v) the Performance Measures, Performance Period, Performance
Award Formula and performance goals applicable to any Award and the extent to
which such performance goals have been attained, (vi) the time of the expiration
of any Award, (vii) the effect of the Participant’s termination of Service on
any of the foregoing, and (viii) all other terms, conditions and restrictions
applicable to any Award or Shares acquired pursuant thereto not inconsistent
with the terms of the Plan;

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  (e)   to determine whether an Award will be settled in Shares, cash, or in any
combination thereof;     (f)   to approve one or more forms of Award Agreement;
    (g)   to amend, modify, extend, cancel or renew any Award or to waive any
restrictions or conditions applicable to any Award or any Shares acquired
pursuant thereto;     (h)   to accelerate, continue, extend or defer the
exercisability or vesting of any Award or any shares acquired pursuant thereto,
including with respect to the period following a Participant’s termination of
Service;     (i)   without the consent of the affected Participant and
notwithstanding the provisions of any Award Agreement to the contrary, to
unilaterally substitute at any time an SAR providing for settlement solely in
Shares in place of any outstanding Option, provided that such SAR covers the
same number of Shares and provides for the same exercise price (subject in each
case to adjustment in accordance with Section 4.4) as the replaced Option and
otherwise provides substantially equivalent terms and conditions as the replaced
Option, as determined by the Committee;     (j)   to prescribe, amend or rescind
rules, guidelines and policies relating to the Plan, or to adopt sub-plans or
supplements to, or alternative versions of, the Plan, including, without
limitation, as the Committee deems necessary or desirable to comply with the
laws or regulations of or to accommodate the tax policy, accounting principles
or custom of, foreign jurisdictions whose citizens may be granted Awards; and  
  (k)   to correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award Agreement and to make all other
determinations and take such other actions with respect to the Plan or any Award
as the Committee may deem advisable to the extent not inconsistent with the
provisions of the Plan or applicable law.

     3.3 Delegation. The Committee may delegate to one or more of its members or
to one or more officers of the Company or its Affiliates or to one or more
agents or advisors such administrative duties or powers as it may deem
advisable, and the Committee or any individuals to whom it has delegated duties
or powers as aforesaid may employ one or more individuals to render advice with
respect to any responsibility the Committee or such individuals may have under
this Plan.
     3.4 Option or SAR Repricing. Without the affirmative vote of holders of a
majority of the Shares cast in person or by proxy at a meeting of the
stockholders of the Company at which a quorum representing a majority of all
outstanding Shares is present or represented by proxy, the Committee shall not
approve a program providing for either (a) the cancellation of outstanding
Options or SARs and the grant in substitution therefore of new Options or SARs
having a lower Option Price or Grant Price, respectively, or (b) the amendment
of outstanding Options or SARs to reduce the Option Price or Grant Price,
respectively, thereof. This Section shall not be construed to apply to “issuing
or assuming a stock option in a transaction to which section 424(a) applies,”
within the meaning of Code Section 424.

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Article 4. Shares Subject to this Plan and Maximum Awards
     4.1 Number of Shares Available for Awards.

  (a)   Subject to adjustment as provided in Section 4.4, the maximum number of
authorized but unissued or reacquired Shares available for issuance to
Participants under this Plan on or after the Effective Date (the “Share
Authorization”) shall be the sum of:

  (i)   Twenty-two million (22,000,000) Shares,     (ii)   the number of Shares
(not to exceed 5,800,000) which remained available for grant under the
Predecessor Plans as of the Effective Date,     (iii)   the number of Shares
(not to exceed 22,000,000) subject to that portion of any option or other award
outstanding pusuant to the Predecessor Plans as of the Effective Date which, on
or after such date, expires or is terminated or canceled for any reason without
having been exercised or settled, and

  (b)   Subject to the Share Authorization, the maximum number of Shares that
may be issued pursuant to ISOs shall be 27,800,000 Shares.     (c)   Subject to
adjustment as provided in Section 4.4 and subject to the Share Authorization:

  (i)   the number of Shares subject to Nonemployee Director Awards granted
pursuant to Article 13 during the term of the Plan shall not exceed 2,500,000
Shares; and     (ii)   no Nonemployee Director may be granted a Nonemployee
Director Award covering more than 120,000 Shares in any Plan Year; provided,
however, that (x) this annual limit on Nonemployee Director Awards shall be
increased to 180,000 Shares for any Nonemployee Director serving as Chairman or
Lead Director of the Board and (y) in the Plan Year in which an individual is
first appointed or elected to the Board as a Nonemployee Director, such
individual may be granted a Nonemployee Director Award covering up to an
additional 60,000 Shares (a “New Nonemployee Director Award”).

  (d)   Except with respect to a maximum of five percent (5%) of the Share
Authorization, any Full Value Awards which vest on the basis of the
Participant’s continued Service shall not provide for vesting which is any more
rapid than over a three (3) year period and any Full Value Awards which vest
upon the attainment of performance goals shall provide for a performance period
of at least twelve (12) months.

     4.2 Share Usage. Shares covered by an Award shall only be counted as used
to the extent they are actually issued and are not forfeited. Any Shares subject
to an Award which terminates by expiration, forfeiture, cancellation, or
otherwise without the issuance of such Shares, is settled in cash in lieu of
Shares, or is exchanged with the Committee’s permission, prior to the issuance
of Shares, for an Award not involving Shares, shall be available again for
issuance under this Plan. Moreover, if the Option Price of any Option granted
under this Plan or the tax withholding requirements with respect to any Award
granted under this Plan are satisfied by tendering Shares to

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the Company (by either actual delivery or by attestation), or if an SAR is
exercised, only the number of Shares issued, net of the Shares tendered, if any,
will be deemed delivered for purposes of determining the maximum number of
Shares remaining available for issuance under this Plan.
     4.3 Annual Award Limits. To the extent the Committee determines that an
Award to a Covered Employee shall be designed to qualify as Performance-Based
Compensation, the following limits (each an “Annual Award Limit” and,
collectively, “Annual Award Limits”) shall apply to grants of such Awards under
this Plan:

  (a)   Options: The maximum aggregate number of Shares subject to Options
granted in any one Plan Year to any one Participant shall not exceed two million
(2,000,000).     (b)   Stock Appreciation Rights: The maximum aggregate number
of Shares subject to SARs granted in any one Plan Year to any one Participant
shall not exceed two million (2,000,000).     (c)   Restricted Stock or
Restricted Stock Units: The maximum aggregate number of Shares subject to Awards
of Restricted Stock or Restricted Stock Units granted in any one Plan Year to
any one Participant shall not exceed one million (1,000,000).     (d)  
Performance Awards: The maximum aggregate number of Shares, or equal Fair Market
Value of such number of Shares determined as of the date of grant, subject to
Awards of Performance Units or Performance Shares granted to any one Participant
for each Plan Year contained in the Performance Period(s) applicable to such
Award(s) shall not exceed one million (1,000,000).     (e)   Cash-Based Awards:
The maximum aggregate amount awarded or credited with respect to Cash-Based
Awards granted to any one Participant for each Plan Year contained in the
Performance Period(s) applicable to such Award(s) shall not exceed five million
dollars ($5,000,000).     (f)   Other Stock-Based Awards. The maximum aggregate
number of Shares subject to Other Stock-Based Awards granted in any one Plan
Year to any one Participant shall not exceed one million (1,000,000).

     4.4 Adjustments in Authorized Shares. In the event of any corporate event
or transaction (including, but not limited to, a change in the Shares of the
Company or the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, stock dividend, stock split,
reverse stock split, split up, spin-off, or other distribution of stock or
property of the Company, combination of Shares, exchange of Shares, dividend in
kind, or other like change in capital structure or distribution (other than
normal cash dividends) to stockholders of the Company, or any similar corporate
event or transaction, the Committee, in its sole discretion, in order to prevent
dilution or enlargement of Participants’ rights under this Plan, shall
substitute or adjust, as applicable, the number and kind of Shares that may be
issued under this Plan or under particular forms of Awards, the number and kind
of Shares subject to outstanding Awards, the Option Price or Grant Price
applicable to outstanding Awards, the Annual Award Limits, and other value
determinations applicable to outstanding Awards.

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     The Committee, in its sole discretion, may also make appropriate
adjustments in the terms of any Awards under this Plan to reflect, or related
to, such changes or distributions and to modify any other terms of outstanding
Awards, including modifications of performance goals, Performance Award Formulas
and changes in the length of Performance Periods. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under this Plan.
     Subject to the provisions of Article 18, without affecting the number of
Shares reserved or available hereunder, the Committee may authorize the issuance
or assumption of benefits under this Plan in connection with any merger,
consolidation, acquisition of property or stock, or reorganization upon such
terms and conditions as it may deem appropriate, subject to compliance with Code
Sections 409A and 422 and any related guidance issued by the U.S. Treasury
Department, where applicable.
Article 5. Eligibility and Participation
     5.1 Eligibility. Individuals eligible to participate in this Plan include
all Employees, Directors, and Third Party Service Providers.
     5.2 Actual Participation. Subject to the provisions of this Plan, the
Committee may, from time to time, select from all eligible individuals, those
individuals to whom Awards shall be granted and shall determine, in its sole
discretion, the nature of, any and all terms permissible by law, and the amount
of each Award.
Article 6. Stock Options
     6.1 Grant of Options. Subject to the terms and provisions of this Plan,
Options may be granted to Participants in such number, upon such terms, and at
any time and from time to time as shall be determined by the Committee, in its
sole discretion; provided that ISOs may be granted only to eligible Employees of
the Company or of any parent or subsidiary corporation (as permitted by Code
Section 422).
     6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the maximum duration of the
Option, the number of Shares to which the Option pertains, the conditions upon
which an Option shall become vested and exercisable, and such other provisions
as the Committee shall determine which are not inconsistent with the terms of
this Plan. The Award Agreement also shall specify whether the Option is intended
to be an ISO or a NQSO.
     6.3 Option Price. The Option Price shall be determined by the Committee, in
its discretion, and shall be specified in the Award Agreement; provided,
however, that (a) the Option Price must be at least equal to one hundred percent
(100%) of the FMV of the Shares on the effective date of grant of the Option and
(b) no ISO granted to a Ten Percent Owner shall have an Option Price less than
one hundred ten percent (110%) of the FMV of the Shares on the effective date of
grant of the Option. Notwithstanding the foregoing, an Option (whether an ISO or
NQSO) may be granted with an Option Price lower than the minimum Option Price
set forth above if such Option is granted pursuant to an assumption or
substitution for another option in a manner that would qualify under the
provisions of Code Section 424(a).

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     6.4 Term of Options. Each Option granted to a Participant shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, that (a) no Option shall be exercisable later than the tenth (10th)
anniversary of the effective date of its grant and (b) no ISO granted to a Ten
Percent Owner shall be exercisable later than the fifth (5th) anniversary of the
effective date of its grant.
     6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant.
     6.6 Payment. Options granted under this Article 6 shall be exercised by the
delivery of a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by complying with
any alternative procedures which may be authorized by the Committee, setting
forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
     A condition of the issuance of the Shares as to which an Option shall be
exercised shall be the payment of the Option Price. The Option Price of any
Option shall be payable to the Company in full either: (a) in cash or its
equivalent; (b) by tendering (either by actual delivery or attestation)
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the Option Price (provided that except as otherwise determined
by the Committee, the Shares that are tendered must have been held by the
Participant for at least six (6) months (or such other period, if any, as the
Committee may permit) prior to their tender to satisfy the Option Price if
acquired directly or indirectly from the Company other than pursuant to an open
market purchase); (c) by a combination of (a) and (b); or (d) any other method
approved or accepted by the Committee in its sole discretion, including, without
limitation, if the Committee so determines, a cashless (broker-assisted)
exercise.
     Subject to any governing rules or regulations, as soon as practicable after
receipt of written notification of exercise and full payment (including
satisfaction of any applicable tax withholding), the Company shall issue or
cause to be issued the Shares acquired pursuant to such exercise and shall
deliver such Shares to or for the benefit of the Participant by means of one or
more of the following: (i) by delivering to the Participant evidence of book
entry Shares credited to the account of the Participant, (ii) by depositing such
Shares for the benefit of the Participant with any broker with which the
Participant has an account relationship, or (iii) by delivering such Shares to
the Participant in certificate form.
     Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.
     6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, minimum holding period requirements, restrictions under applicable
federal securities laws, under the requirements of any stock exchange or market
upon which such Shares are then listed and/or traded, or under any blue sky or
state securities laws applicable to such Shares.

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     6.8 Termination of Service. Each Award Agreement evidencing an Option shall
set forth the extent to which the Participant shall have the right to exercise
the Option following termination of the Participant’s Service. Such provisions
shall be determined in the sole discretion of the Committee, need not be uniform
among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.
     6.9 ISO Fair Market Value Limitation. To the extent that options designated
as ISOs (granted under all stock option plans of the Company or any parent or
subsidiary corporation, including the Plan) become exercisable by a Participant
for the first time during any calendar year for stock having an aggregate Fair
Market Value greater than $100,000 (or such other limit provided by Code
Section 422), the portion of such options which exceeds such amount shall be
treated as NQSOs. For purposes of this Section, options designated as ISOs shall
be taken into account in the order in which they were granted, and the Fair
Market Value of stock shall be determined as of the time the option with respect
to such stock is granted. If an Option is treated as an ISO in part and as an
NQSO in part by reason of the limitation set forth in this Section, the
Participant may designate which portion of such Option the Participant is
exercising. In the absence of such designation, the Participant shall be deemed
to have exercised the ISO portion of the Option first. Upon exercise, shares
issued pursuant to each such portion shall be separately identified.
Article 7. Stock Appreciation Rights
     7.1 Grant of SARs. Subject to the terms and conditions of this Plan, SARs
may be granted to Participants in such number, upon such terms, and at any time
and from time to time as shall be determined by the Committee, in its sole
discretion. The Committee may grant Freestanding SARs, Tandem SARs, or any
combination of these forms of SARs.
     7.2 Award Agreement. Each SAR Award shall be evidenced by an Award
Agreement that shall specify the Grant Price, the maximum duration of the SAR,
the number of Shares to which the SAR pertains, the conditions upon which the
SAR shall become vested and exercisable, and such other provisions as the
Committee shall determine which are not inconsistent with the terms of this
Plan.
     7.3 Grant Price. The Grant Price for each grant of a Freestanding SAR shall
be determined by the Committee and shall be specified in the Award Agreement;
provided, however, the Grant Price must be at least equal to one hundred percent
(100%) of the FMV of the Shares on the effective date of grant. The Grant Price
of Tandem SARs shall be equal to the Option Price of the related Option.
     7.4 Term of SARs. The term of an SAR granted under this Plan shall be
determined by the Committee, in its sole discretion; provided, however, that no
SAR shall be exercisable later than the tenth (10th) anniversary of the
effective date of its grant.
     7.5 Exercise of Freestanding SARs. Freestanding SARs granted under this
Article 7 shall be exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance approve, which terms and
restrictions need not be the same for each grant or for each Participant.

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     7.6 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
     Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (b) the value of
the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the excess of the Fair Market Value of the Shares subject to
the underlying ISO at the time the Tandem SAR is exercised over the Option Price
of the underlying ISO; and (c) the Tandem SAR may be exercised only when the
Fair Market Value of the Shares subject to the ISO exceeds the Option Price of
the ISO.
     7.7 Deemed Exercise of SARs. If, on the date on which an SAR would
otherwise terminate or expire, the SAR by its terms remains exercisable
immediately prior to such termination or expiration and, if so exercised, would
result in a payment to the holder of such SAR, then any portion of such SAR
which has not previously been exercised shall automatically be deemed to be
exercised as of such date with respect to such portion.
     7.8 Settlement of SAR Amount. Upon the exercise of an SAR, the Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:

  (a)   The excess of the Fair Market Value of a Share on the date of exercise
over the Grant Price; by     (b)   The number of Shares with respect to which
the SAR is exercised.

     Payment of such amount upon the exercise of SARs shall be made solely by
means of the issuance of Shares delivered to or for the benefit of the
Participant by one or more of the means described in Section 6.6.
     7.9 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an SAR granted
under this Article 7 as it may deem advisable, including, without limitation,
minimum holding period requirements, restrictions under applicable federal
securities laws, under the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded, or under any blue sky or state
securities laws applicable to such Shares.
     7.10 Termination of Service. Each Award Agreement evidencing an SAR shall
set forth the extent to which the Participant shall have the right to exercise
the SAR following termination of the Participant’s Service. Such provisions
shall be determined in the sole discretion of the Committee, need not be uniform
among all SARs issued pursuant to this Article 7, and may reflect distinctions
based on the reasons for termination.

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Article 8. Restricted Stock and Restricted Stock Units
     8.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the
terms and provisions of this Plan, including the provisions of Article 21 with
respect to Code Section 409A if applicable, Awards of Restricted Stock and/or
Restricted Stock Units may be granted to Participants in such number, upon such
terms, and at any time and from time to time as shall be determined by the
Committee, in its sole discretion.
     8.2 Award Agreement. Each Restricted Stock and/or Restricted Stock Unit
grant shall be evidenced by an Award Agreement that shall specify the purchase
price, if any, the Period(s) of Restriction, if any, the number of Shares of
Restricted Stock or the number of Restricted Stock Units granted, and such other
provisions as the Committee shall determine which are not inconsistent with the
terms of this Plan.
     8.3 Purchase Price. The purchase price, if any, for Shares issuable under
each Restricted Stock Award shall be established by the Committee, in its
discretion. No monetary payment (other than applicable tax withholding, if any)
shall be required as a condition of receiving a Restricted Stock Unit Award, the
consideration for which shall be services actually rendered to or for the
benefit of the Company or an Affiliate. Notwithstanding the foregoing, if
required by applicable state corporate law, the Participant shall furnish
consideration in the form of cash or past services rendered to or for the
benefit of the Company or an Affiliate having a value not less than the par
value of the Shares issued pursuant to a Restricted Stock or Restricted Stock
Unit Award.
     8.4 Purchase Period; Payment of Purchase Price. If the Committee determines
to grant a Participant the right to purchase Shares of Restricted Stock (a
“Purchase Right”), such Purchase Right shall be exercisable within a period
established by the Committee, which shall in no event exceed thirty (30) days
from the effective date of the grant of the Purchase Right. Except as otherwise
provided below, payment of the purchase price for the number of Shares purchased
pursuant to a Purchase Right shall be made (a) in cash or its equivalent, (b) by
such other consideration, including past services rendered to or for the benefit
of the Company or an Affiliate, as may be approved by the Committee from time to
time to the extent permitted by applicable law, or (c) by any combination
thereof. The Committee may at any time or from time to time grant Purchase
Rights which do not permit all of the foregoing forms of consideration to be
used in payment of the purchase price or which otherwise restrict one or more
forms of consideration.
     8.5 Vesting Restrictions. The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units
granted pursuant to this Plan as it may deem advisable including, without
limitation, restrictions based upon continued Service, the achievement of
specific performance goals, time-based restrictions on vesting following the
attainment of the performance goals, and/or other time-based restrictions. The
period during which Shares subject to an Award of Restricted Stock or Restricted
Stock Units remain subject to such conditions and/or restrictions shall be the
“Period of Restriction” with respect to such Shares. To the extent deemed
appropriate by the Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company’s possession until such
time as the Period of Restriction applicable to such Shares has lapsed.

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     Except as otherwise provided in this Article 8 and subject to the
satisfaction of any applicable tax withholding obligations, Shares of Restricted
Stock covered by each Restricted Stock Award shall become freely transferable by
the Participant after the Period of Restriction with respect to such Shares has
lapsed.
     8.6 Settlement of Restricted Stock Unit Awards. The Company shall issue to
a Participant on the date on which Restricted Stock Units subject to the
Participant’s Restricted Stock Unit Award vest or on such other date(s)
determined by the Committee, in its discretion, and set forth in the Award
Agreement one (1) Share for each Restricted Stock Unit then becoming vested or
otherwise to be settled on such date, subject to the withholding of applicable
taxes. If permitted by the Committee, and subject to the provisions of
Article 21 with respect to Code Section 409A, the Participant may elect to defer
receipt of all or any portion of the Shares issuable to the Participant pursuant
to this Section, and such deferred issuance date(s) elected by the Participant
shall be set forth in the Award Agreement. Shares issued in settlement of
Restricted Stock Unit Awards shall be delivered to or for the benefit of the
Participant by one or more of the means described in Section 6.6.
Notwithstanding the foregoing, the Committee, in its discretion, may provide for
settlement of any Restricted Stock Unit Award by payment to the Participant in
cash of an amount equal to the Fair Market Value on the payment date of the
Shares otherwise issuable to the Participant pursuant to this Section.
     8.7 Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 8.5, each certificate representing Shares of Restricted
Stock granted pursuant to this Plan may bear a legend such as the following or
as otherwise determined by the Committee in its sole discretion:
     The sale or transfer of Shares of stock represented by this certificate,
whether voluntary, involuntary, or by operation of law, is subject to certain
restrictions on transfer as set forth in the Maxtor Corporation 2005 Performance
Incentive Plan, and in the associated Award Agreement. A copy of this Plan and
such Award Agreement may be obtained from Maxtor Corporation.
     8.8 Voting Rights; Dividends and Distributions; Dividend Equivalent Rights.
Unless otherwise determined by the Committee and set forth in a Participant’s
Award Agreement, to the extent permitted or required by law, as determined by
the Committee, Participants holding Shares of Restricted Stock granted hereunder
may be granted the right to exercise full voting rights and to receive dividends
and other distributions paid with respect to those Shares during the Period of
Restriction. However, in the event of a dividend or distribution paid in Shares
or any other adjustment made upon a change in the capital structure of the
Company as described in Section 4.4, any and all new, substituted or additional
securities or other property (other than normal cash dividends) to which the
Participant is entitled by reason of the Participant’s Restricted Stock Award
shall be immediately subject to the same Period of Restriction as the Shares
subject to such Award with respect to which such dividends or distributions were
paid or adjustments were made. A Participant shall have no voting rights with
respect to any Restricted Stock Unit Award until the date of issuance of Shares
in settlement of such Award. The Committee may, in its discretion, grant
Dividend Equivalent Rights with respect to one or more Restricted Stock Unit
Awards, as provided in Section 14.
     8.9 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to Restricted Stock and Restricted
Stock Unit Awards granted under

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this Article 8 as it may deem advisable, including, without limitation, minimum
holding period requirements, restrictions under applicable federal securities
laws, under the requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, or under any blue sky or state securities
laws applicable to such Shares.
     8.10 Termination of Service. Each Award Agreement evidencing a Restricted
Stock or Restricted Stock Unit Award shall set forth the extent to which the
Participant shall have the right to retain Shares of Restricted Stock or
Restricted Stock Units following termination of the Participant’s Service. Such
provisions shall be determined in the sole discretion of the Committee, need not
be uniform among all Shares of Restricted Stock or Restricted Stock Units issued
pursuant to this Plan, and may reflect distinctions based on the reasons for
termination.
     8.11 Section 83(b) Election. The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon the Participant
making or refraining from making an election with respect to the Award under
Code Section 83(b). If a Participant makes an election pursuant to Code Section
83(b) concerning a Restricted Stock Award, the Participant shall be required to
file promptly a copy of such election with the Company.
Article 9. Performance Awards
     9.1 Grant of Performance Awards. Subject to the terms and provisions of
this Plan, including the provisions of Article 21 with respect to Code
Section 409A, if applicable, Performance Awards consisting of Performance Units
and/or Performance Shares may be granted to Participants in such number, upon
such terms, and at any time and from time to time as shall be determined by the
Committee, in its sole discretion.
     9.2 Award Agreement. Each Performance Award shall be evidenced by an Award
Agreement that shall specify the number of Performance Units and/or Performance
Shares subject to such Award and the additional terms and conditions of such
Award as the Committee shall determine which are not inconsistent with the terms
of this Plan.
     9.3 Initial Value of Performance Units or Performance Shares. Each
Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. The
Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the monetary value and/or number of
Shares that will be paid to the Participant in settlement of the Participant’s
Performance Award.
     9.4 Establishment of Performance Period, Performance Goals and Performance
Award Formula. In granting each Performance Award, the Committee shall establish
in writing the applicable Performance Period, Performance Award Formula and one
or more performance goals which, when measured at the end of the Performance
Period, shall determine on the basis of the Performance Award Formula the final
value of the Performance Award to be paid to the Participant. Unless otherwise
permitted in compliance with the requirements under Code Section 162(m), with
respect to each Performance Award intended to result in the payment of
Performance-Based Compensation, the Committee shall establish the performance
goal(s) on the basis of one or more Performance Measures described in Article 12
and the Performance Award Formula applicable to the

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Performance Award no later than the earlier of (a) the date ninety (90) days
after the commencement of the applicable Performance Period or (b) the date on
which 25% of the Performance Period has elapsed, and, in any event, at a time
when the outcome of the performance goals remains substantially uncertain. Once
established, the performance goals and Performance Award Formula applicable to a
Performance Award intended to result in the payment of Performance-Based
Compensation shall not be changed during the Performance Period. The Company
shall notify each Participant granted a Performance Award of the terms of such
Award, including the Performance Period, performance goal(s) and Performance
Award Formula.
     9.5 Determination of Final Value of Performance Awards. As soon as
practicable following the completion of the Performance Period applicable to a
Performance Award, the Committee shall certify in writing the extent to which
the applicable performance goals have been attained and the resulting final
value of the Performance Award earned by the Participant and to be paid upon its
settlement in accordance with the applicable Performance Award Formula.
     9.6 Discretionary Adjustment of Award Formula. In its discretion, the
Committee may, either at the time it grants a Performance Award or at any time
thereafter, provide for the positive or negative adjustment of the Performance
Award Formula applicable to any Performance Award not intended to result in
Performance-Based Compensation to reflect such Participant’s individual
performance in his or her position with the Company or such other factors as the
Committee may determine. If permitted under the Award Agreement evidencing a
Performance Award intended to result in Performance-Based Compensation, the
Committee shall have the discretion, on the basis of such criteria as may be
established by the Committee, to reduce some or all of the value of the
Performance Award that would otherwise be paid to the Participant upon its
settlement notwithstanding the attainment of any performance goal and the
resulting value of the Performance Award determined in accordance with the
Performance Award Formula. No such reduction may result in an increase in the
amount payable upon settlement of another Participant’s Performance Award that
is intended to result in Performance-Based Compensation.
     9.7 Settlement of Performance Awards. Subject to the provisions of
Article 21 with respect to Code Section 409A, as soon as practicable following
the Committee’s determination and certification in accordance with Sections 9.5
and 9.6 or on such other date(s) determined by the Committee, in its discretion,
and set forth in the Award Agreement, payment shall be made to each eligible
Participant of the final value of the Participant’s Performance Award. Payment
of such amount shall be made in the form of cash, Shares, or a combination
thereof as determined by the Committee. Unless otherwise provided in the Award
Agreement evidencing a Performance Award, payment shall be made in a lump sum.
If permitted by the Committee, and subject to the provisions of Article 21 with
respect to Code Section 409A, the Participant may elect to defer receipt of all
or any portion of the payment to be made to the Participant pursuant to this
Section, and such deferred payment date(s) elected by the Participant shall be
set forth in the Award Agreement.
     If payment is to be made in Shares, the number of such Shares shall be
determined by dividing the final value of the Performance Award by the value of
a Share determined by the method specified in the Award Agreement. Such methods
may include, without limitation, the closing market price on a specified date
(such as the settlement date) or an average of market prices over a series of
trading days. Shares issued in payment of any Performance Award may be fully
vested and freely transferable shares or may be Shares subject to a Period of
Restriction as provided in Section 8.5. Shares issued in settlement of
Performance Awards shall be delivered to or for the benefit of the Participant
by one or more of the means described in Section 6.6.

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     9.8 Voting Rights; Dividend Equivalent Rights. A Participant shall have no
voting rights with respect to Shares represented by a Performance Award until
the date of the issuance of such Shares, if any, in settlement of such Award.
The Committee may, in its discretion, grant Dividend Equivalent Rights with
respect to one or more Performance Share Awards, as provided in Section 14.
Dividend Equivalent Rights shall not be granted with respect to Performance
Units.
     9.9 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares issued in settlement of Performance Awards under this
Article 9 as it may deem advisable, including, without limitation, minimum
holding period requirements, restrictions under applicable federal securities
laws, under the requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, or under any blue sky or state securities
laws applicable to such Shares.
     9.10 Termination of Service. Each Award Agreement evidencing a Performance
Award shall set forth the extent to which the Participant shall have the right
to retain the Performance Award following termination of the Participant’s
Service. Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Performance Awards issued pursuant to
this Article 9, and may reflect distinctions based on the reasons for
termination.
Article 10. Cash-Based Awards and Other Stock-Based Awards
     10.1 Grant of Cash-Based Awards. Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may grant
Cash-Based Awards to Participants in such amounts and upon such terms, including
the achievement of specific performance goals, as the Committee may determine.
     10.2 Grant of Other Stock-Based Awards. The Committee may grant other types
of equity-based or equity-related Awards not otherwise described by the terms of
this Plan (including the grant or offer for sale of unrestricted Shares) in such
amounts and subject to such terms and conditions, as the Committee shall
determine. Such Awards may involve the transfer of actual Shares to
Participants, or payment in cash or otherwise of amounts based on the value of
Shares and may include, without limitation, Awards designed to comply with or
take advantage of the applicable local laws of jurisdictions other than the
United States.
     10.3 Award Agreement. Each Cash-Based Award and Other Stock-Based Award
shall be evidenced by an Award Agreement that shall specify the monetary value
or number of Shares subject to such Award and the additional terms and
conditions of such Award as the Committee shall determine which are not
inconsistent with the terms of this Plan.
     10.4 Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based
Award shall specify a monetary payment amount or payment range as determined by
the Committee. Each Other Stock-Based Award shall be expressed in terms of
Shares or units based on Shares, as determined by the Committee. The Committee
may establish performance goals with respect to any such Award in its
discretion. If the Committee exercises its discretion to establish performance
goals, the final value

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of Cash-Based Awards or Other Stock-Based Awards that will be paid to the
Participant will depend on the extent to which the performance goals are met.
The establishment of performance goals with respect to any Cash-Based Award or
Other Stock-Based Award intended to result in Performance-Based Compensation
shall comply the requirements applicable to Performance Awards set forth in
Section 9.4.
     10.5 Payment of Cash-Based Awards and Other Stock-Based Awards. Payment, if
any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be
made in accordance with the terms of the Award, in cash or Shares as the
Committee determines. The determination and certification of the final value
with respect to any Cash-Based Award or Other Stock-Based Award intended to
result in Performance-Based Compensation shall comply the requirements
applicable to Performance Awards set forth in Sections 9.5 and 9.6. To the
extent applicable, payment with respect to each Cash-Based Award and Other
Stock-Based Award shall be made in compliance with the provisions of Article 21
with respect to Code Section 409A. Shares issued in settlement of Cash-Based
Awards and Other Stock-Based Awards shall be delivered to or for the benefit of
the Participant by one or more of the means described in Section 6.6.
     10.6 Voting Rights; Dividend Equivalent Rights. A Participant shall have no
voting rights with respect to Shares represented by a Cash-Based Award or Other
Stock-Based Award until the date of the issuance of such Shares, if any, in
settlement of such Award. The Committee may, in its discretion, grant Dividend
Equivalent Rights with respect to one or more Other Stock-Based Awards, as
provided in Section 14. Dividend Equivalent Rights shall not be granted with
respect to Cash-Based Awards.
     10.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares issued in settlement of Cash-Based Awards and Other
Stock-Based Awards under this Article 10 as it may deem advisable, including,
without limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any stock exchange
or market upon which such Shares are then listed and/or traded, or under any
blue sky or state securities laws applicable to such Shares.
     10.8 Termination of Service. Each Award Agreement evidencing a Cash-Based
Award or Other Stock-Based Award shall set forth the extent to which the
Participant shall have the right to retain such Award following termination of
the Participant’s Service. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among all Cash-Based Awards or
Other Stock-Based Awards issued pursuant to this Article 10, and may reflect
distinctions based on the reasons for termination.
Article 11. Transferability of Awards
     11.1 Transferability. Except as provided in Section 11.2 below, during a
Participant’s lifetime, his or her Awards shall be exercisable only by the
Participant. Awards shall not be transferable other than by will or the laws of
descent and distribution; no Awards shall be subject, in whole or in part, to
attachment, execution, or levy of any kind; and any purported transfer in
violation hereof shall be null and void. The Committee may establish such
procedures as it deems appropriate for a Participant to designate one or more
beneficiaries to whom any amounts payable or Shares deliverable in the event of,
or following, the Participant’s death, may be provided.

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     11.2 Committee Action. The Committee may, in its discretion, determine that
notwithstanding Section 11.1, any or all Awards (other than ISOs) held by
Employees or Directors shall be transferable to and exercisable by such
transferees, and subject to such terms and conditions, as the Committee may deem
appropriate; provided, however, that only the Participant to which the Award had
been granted or a “family member” (as defined below in Section 11.3 below) of
such Participant may be a transferee of such Award. Such a determination may be
made at the time an Award is granted or at any time thereafter.
     11.3 Family Member. For purposes of Section 11.2, “family member” shall
mean a Participant’s child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the Participant’s household
(other than a tenant of the Participant), a trust in which these persons (or the
Participant) have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Participant) control the management of
assets, and any other entity in which these persons (or the Participant) own
more than fifty percent (50%) of the voting interests.
Article 12. Performance Measures and Performance Goals
     12.1 Performance Measures. Unless and until the Committee proposes for
stockholder vote and the stockholders approve a change in the general
Performance Measures set forth in this Article 12, the performance goals upon
which the payment or vesting of an Award to a Covered Employee that is intended
result in the payment of Performance-Based Compensation shall be based solely
upon one or more of the following Performance Measures:

  (a)   Revenue     (b)   Sales     (c)   Expenses     (d)   Net earnings or net
income (before or after taxes);     (e)   Earnings per share;     (f)   Net
sales or revenue growth;     (g)   Net operating profit;     (h)   Return
measures (including, but not limited to, return on assets, capital, invested
capital, equity, sales, or revenue);     (i)   Cash flow (including, but not
limited to, operating cash flow, free cash flow,cash flow return on equity, and
cash flow return on investment);     (j)   Earnings before or after any one or
more of: stock-based compensation expense, taxes, interest, depreciation, and
amortization;     (k)   Gross or operating margins;
    (l)   Productivity ratios;     (m)   Share price (including, but not limited
to, growth measures and total stockholder return);     (n)   Expense targets;  
  (o)   Margins;     (p)   Operating efficiency;     (q)   Market share;     (r)
  Customer satisfaction;     (s)   Working capital targets;

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  (t)   Economic value added or EVA® (net operating profit after tax minus the
sum of capital multiplied by the cost of capital);     (u)   Balance of cash,
cash equivalents and marketable securities;     (v)   Employee satisfaction;    
(w)   Employee retention;     (x)   Product development;     (y)   Completion of
a joint venture or other corporate transaction; and     (z)   Completion of an
identified special project.

     Performance Measures shall have the same meanings as used in the Company’s
financial statements, or, if such terms are not used in the Company’s financial
statements, they shall have the meaning applied pursuant to generally accepted
accounting principles, or as used generally in the Company’s industry. Any
Performance Measure(s) may be used to measure the performance of the Company
and/or one or more Affiliates as a whole or any business unit of the Company or
any Affiliate or any combination thereof, as the Committee may deem appropriate.
For purposes of the Plan, Performance Measures shall be calculated prior to the
accrual or payment during the same accounting period of any Award the payment of
which is based on the attainment of a performance goal established with respect
to such Performance Measure and subject to adjustment as provided in
Section 12.2 below.
     12.2 Evaluation of Performance Measures. The Committee may provide in any
such Award that the evaluation of one or more Performance Measures may include
or exclude any of the following events that occurs during a Performance Period:
(a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the
effect of changes in tax laws, accounting principles, or other laws or
provisions affecting reported results, (d) any reorganization and restructuring
programs, (e) extraordinary nonrecurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management’s discussion and analysis
of financial condition and results of operations appearing in the Company’s
annual report to stockholders for the applicable year, (f) acquisitions or
divestitures, and (g) foreign exchange gains and losses. To the extent such
inclusions or exclusions affect Awards to Covered Employees, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility.
     12.3 Performance Goals. Performance goals shall be established by the
Committee on the basis of targets to be attained with respect to one or more
Performance Measures. Such targets may include a minimum, maximum, target level
and intermediate levels of performance, with the final value of a Award
determined under by the level attained during the applicable Performance Period.
Targets may be stated as absolute values or as values determined relative to an
index, budget or other standard selected by the Committee, such as the
performance of a group of comparator companies, or a published or special index
that the Committee, in its sole discretion, deems appropriate. A target with
respect to the Performance Measure described in Section 12.1(m) above [Share
price] may be compared to various stock market indices. The Committee also has
the authority to provide for accelerated vesting of any Award based on the
achievement of performance goals pursuant to the Performance Measures specified
in this Article 12.
     12.4 Adjustment of Performance-Based Compensation. Awards that are intended
to qualify as Performance-Based Compensation may not be adjusted upward. The
Committee shall retain the discretion to adjust such Awards downward, either on
a formula or discretionary basis or any combination, as the Committee
determines.

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     12.5 Committee Discretion. In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
Performance Measures without obtaining stockholder approval of such changes, the
Committee shall have sole discretion to make such changes without obtaining
stockholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards that shall not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m) and base vesting on Performance Measures
other than those set forth in Section 12.1.
Article 13. Nonemployee Director Awards
     Nonemployee Directors may only be granted Nonemployee Director Awards under
the Plan in accordance with this Article 13 and Section 4.1(c). From time to
time, the Board or the Committee shall set the amount(s) and type(s) of
Nonemployee Director Awards that shall be granted to all Nonemployee Directors
on a periodic, nondiscriminatory basis pursuant to the Plan, as well as the
additional amount(s) and type(s) of Nonemployee Director Awards, if any, to be
awarded, also on a periodic, nondiscriminatory basis, in consideration of one or
more of the following: a Nonemployee Director’s service on one or more of the
committees of the Board, a Nonemployee Director’s service as the chair of a
committee of the Board, a Nonemployee Director’s service as Chairman or Lead
Director of the Board, or the initial election or appointment of an individual
to the Board as a Nonemployee Director. Subject to the limits set forth in
Section 4.1(c) and the foregoing, the Board or the Committee shall grant such
Nonemployee Director Awards and New Nonemployee Director Awards, as it shall
from time to time determine.
Article 14. Dividend Equivalent Rights
     The Committee may, in its discretion, grant Dividend Equivalent Rights
pursuant to the Award Agreement evidencing any Restricted Stock Unit Award,
Performance Share Award or Other Stock–Based Award with respect to the payment
of cash dividends on Shares during the period beginning on the date such Award
is granted and ending, with respect to particular Shares subject to the Award,
on the earlier of the date on which the Award is settled or the date on which it
is terminated. A Participant granted Dividend Equivalent Rights shall be
credited with whole bookkeeping units (each a “Dividend Equivalent Unit”) as of
the date of payment of such cash dividends on Shares. Each Dividend Equivalent
Unit shall have a value as of any date equal to the Fair Market Value of a Share
on such date. The number of Dividend Equivalent Units (rounded to the nearest
whole number) to be so credited shall be determined by dividing (a) the amount
of cash dividends paid on such date with respect to the number of Shares then
represented by the Award (including Dividend Equivalent Units previously
credited with respect to such Award) by (b) the Fair Market Value of a Share on
such date. Such Dividend Equivalent Units shall be subject to the same terms,
conditions and restrictions and shall be settled in the same manner and at the
same time (or as soon thereafter as practicable) as the Shares originally
subject to the Award.
Article 15. Beneficiary Designation
     Subject to compliance with applicable local law and procedures, each
Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of his death before he receives
any or all of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid or exercised by the
Participant’s executor, administrator, or legal representative.

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Article 16. Rights of Participants
     16.1 Employment/Service. Nothing in this Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company and/or its
Affiliates to terminate any Participant’s Service at any time or for any reason,
nor confer upon any Participant any right to continue his Service for any
specified period of time.
     Neither an Award nor any benefits arising under this Plan shall constitute
an employment contract with the Company and/or its Affiliates and, accordingly,
subject to Articles 3 and 18, this Plan and the benefits hereunder may be
terminated at any time in the sole and exclusive discretion of the Committee
without giving rise to any liability on the part of the Company and/or its
Affiliates.
     16.2 Participation. No individual shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
     16.3 Rights as a Stockholder. Except as otherwise provided herein, a
Participant shall have none of the rights of a stockholder with respect to
Shares covered by any Award until the Participant becomes the owner of such
Shares on the books and records of the Company or the Company’s transfer agent.
Article 17. Change in Control
     17.1 Effect of Change in Control on Options and SARs. Subject to the
provisions of Article 21 with respect to Code Section 409A if applicable, the
Committee may, in its sole discretion, provide for any one or more of the
following:

  (a)   Accelerated Vesting. The Committee may, in its sole discretion, provide
in any Award Agreement evidencing an Option or SAR for, or in the event of a
Change in Control may take such actions as it deems appropriate to provide for,
acceleration of the exercisability and vesting in connection with such Change in
Control of any or all outstanding Options and SARs and Shares acquired upon the
exercise of such Options and SARs upon such conditions, including termination of
the Participant’s Service prior to, upon, or following such Change in Control,
and to such extent as the Committee shall determine.     (b)   Assumption or
Substitution. In the event of a Change in Control, the surviving, continuing,
successor, or purchasing entity or parent thereof, as the case may be (the
“Acquiror”), may, without the consent of any Participant, either assume or
otherwise continue in full force and effect the Company’s rights and obligations
under any or all outstanding Options and SARs or substitute for any or all
outstanding Options and SARs substantially equivalent options and SARs (as the
case may be) for the Acquiror’s stock. Any Options or SARs which are neither
assumed or continued by the Acquiror in connection with the Change in Control
nor exercised as of the time of consummation of the Change in Control shall
terminate and cease to be outstanding effective as of the time of consummation
of the Change in Control.

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  (c)   Cash-Out. The Committee may, in its sole discretion and without the
consent of any Participant, determine that, upon the occurrence of a Change in
Control, each or any Option or SAR outstanding immediately prior to the Change
in Control shall be canceled in exchange for a payment with respect to each
vested Share (and each unvested Share, if so determined by the Committee and
agreed to by the Acquiror) subject to such canceled Option or SAR in (i) cash,
(ii) in Shares or stock of a corporation or other business entity a party to the
Change in Control, or (iii) other property which, in any such case, shall be in
an amount having a Fair Market Value equal to the excess (the “Spread”) of the
Fair Market Value of the consideration to be paid per Share in the Change in
Control over the Option Price under such Option or the Grant Price under such
SAR. In the event such determination is made by the Committee, the Spread
(reduced by applicable withholding taxes, if any) shall be paid to Participants
in respect of the vested portion of their canceled Options and SARs as soon as
practicable following the date of the Change in Control and in respect of the
unvested portion of their canceled Options and SARs in accordance with the
vesting schedule applicable to such Awards as in effect prior to the Change in
Control.

     17.2 Effect of Change in Control on Restricted Stock and Restricted Stock
Units. Subject to the provisions of Article 21 with respect to Code Section 409A
if applicable, the Committee may, in its sole discretion, provide in any Award
Agreement evidencing a Restricted Stock Award or Restricted Stock Unit Award
for, or in the event of a Change in Control may take such actions as it deems
appropriate to provide for, acceleration of the lapsing of the Period of
Restriction applicable to the Shares subject to such Award (and, in the case of
Restricted Stock Units, acceleration of the settlement of such Award) upon such
conditions, including termination of the Participant’s Service prior to, upon,
or following such Change in Control, and to such extent as the Committee shall
determine.
     17.3 Effect of Change in Control on Performance Awards. Subject to the
provisions of Article 21 with respect to Code Section 409A if applicable, the
Committee may, in its sole discretion, provide in any Award Agreement evidencing
a Performance Award for, or in the event of a Change in Control may take such
actions as it deems appropriate to provide for, acceleration of the vesting
and/or settlement of such Award upon such conditions, including termination of
the Participant’s Service prior to, upon, or following such Change in Control,
and to such extent as the Committee shall determine.
     17.4. Effect of Change in Control on Other Cash-Based Awards and Other
Stock-Based Awards. Subject to the provisions of Article 21 with respect to Code
Section 409A if applicable, the Committee may, in its sole discretion, provide
in any Award Agreement evidencing an Other Cash-Based Award or Other Stock-Based
Award for, or in the event of a Change in Control may take such actions as it
deems appropriate to provide for, acceleration of the vesting and/or settlement
of such Award upon such conditions, including termination of the Participant’s
Service prior to, upon, or following such Change in Control, and to such extent
as the Committee shall determine.

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     17.5. Effect of Change in Control on Nonemployee Director Awards. Subject
to the provisions of Article 21 with respect to Code Section 409A if applicable,
in the event of a Change in Control, each outstanding Nonemployee Director Award
shall become immediately exercisable and vested in full and shall be settled
effective as of the date of the Change in Control.
Article 18. Amendment, Modification, Suspension, and Termination
     18.1 Amendment, Modification, Suspension, and Termination. Subject to
Section 18.3, the Committee may, at any time and from time to time, alter,
amend, modify, suspend, or terminate this Plan and any Award Agreement in whole
or in part; provided, however, that no material amendment of this Plan shall be
made without stockholder approval if stockholder approval is required by law,
regulation, or stock exchange rule, including, but not limited to, the
Securities Exchange Act of 1934, as amended, the Internal Revenue Code of 1986,
as amended, and, if applicable, the New York Stock Exchange rules. No amendment,
suspension or termination of this Plan shall affect any then outstanding Award
unless expressly provided by the Committee.
     18.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.4 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under this Plan. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under this Plan.
     18.3 Awards Previously Granted. Notwithstanding any other provision of this
Plan to the contrary (other than Section 18.4), no termination, amendment,
suspension, or modification of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding such Award.
     18.4 Amendment to Conform to Law. Notwithstanding any other provision of
this Plan to the contrary, the Committee may, in its sole and absolute
discretion and without the consent of any Participant, amend the Plan or any
Award Agreement, to take effect retroactively or otherwise, as it deems
necessary or advisable for the purpose of conforming the Plan or such Award
Agreement to any present or future law relating to plans of this or similar
nature (including, but not limited to, Code Section 409A), and to the
administrative regulations and rulings promulgated thereunder.
Article 19. Tax Withholding
     19.1 Tax Withholding in General. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
the minimum statutory amount to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of this Plan. The Company shall have no
obligation to deliver Shares or to make any payment in cash under this Plan
unless and until the tax withholding obligations of the Company and its
Affiliates have been satisfied by the Participant.

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     19.2 Share Withholding. The Company shall have the right, but not the
obligation, to deduct from the Shares issuable to a Participant upon the
exercise or settlement of an Award, or to accept from the Participant the tender
of, a number of whole Shares having a Fair Market Value on the date the tax is
to be determined equal to all or any part of the tax withholding obligations of
the Company and its Affiliates. The Fair Market Value of any Shares withheld or
tendered to satisfy any such tax withholding obligations shall not exceed the
amount determined by the applicable minimum statutory withholding rates. All
Participant elections permitted by the Company pursuant to this Section shall be
irrevocable, made in writing, and signed by the Participant, and shall be
subject to any restrictions or limitations that the Company, in its sole
discretion, deems appropriate.
Article 20. Successors
     All obligations of the Company under this Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
Article 21. Compliance with Code Section 409A
     21.1 Awards Subject to Code Section 409A. The provisions of this Article 21
shall apply to any Award or portion thereof that is or becomes subject to Code
Section 409A. Awards subject to Code Section 409A include, without limitation:

  (a)   Any NQSO or SAR that permits the deferral of compensation other than the
deferral of recognition of income until the exercise of the Award.     (b)   Any
Restricted Stock Unit Award, Performance Award, Cash-Based Award or Other
Stock-Based Award that either (i) provides by its terms for settlement of all or
any portion of the Award on one or more dates following the Short-Term Deferral
Period (as defined below) or (ii) permits or requires the Participant to elect
one or more dates on which the Award will be settled.

     Subject to any applicable U.S. Treasury Regulations promulgated pursuant to
Code Section 409A or other applicable guidance, the term “Short-Term Deferral
Period” means the period ending on the later of (i) the date that is two and
one-half months from the end of the Plan Year in which the applicable portion of
the Award is no longer subject to a substantial risk of forfeiture or (ii) the
date that is two and one-half months from the end of the Participant’s taxable
year in which the applicable portion of the Award is no longer subject to a
substantial risk of forfeiture. For this purpose, the term “substantial risk of
forfeiture” shall have the meaning set forth in any applicable U.S. Treasury
Regulations promulgated pursuant to Code Section 409A or other applicable
guidance.
     21.2 Deferral and/or Distribution Elections. Except as otherwise permitted
or required by Section 409A or any applicable U.S. Treasury Regulations
promulgated pursuant to Code Section 409A or other applicable guidance, the
following rules shall apply to any deferral and/or distribution elections (each,
an “Election”) that may be permitted or required by the Committee pursuant to an
Award subject to Code Section 409A:

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     (a) All Elections must be in writing and specify the amount of the
distribution in settlement of an Award being deferred, as well as the time and
form of distribution as permitted by this Plan.
     (b) All Elections shall be made by the end of the Participant’s taxable
year prior to the year in which services commence for which an Award may be
granted to such Participant; provided, however, that if the Award qualifies as
“performance-based compensation” for purposes of Code Section 409A and is based
on services performed over a period of at least twelve (12) months, then the
Election may be made no later than six (6) months prior to the end of such
period.
     (c) Elections shall continue in effect until a written election to revoke
or change such Election is received by the Company, except that a written
election to revoke or change such Election must be made prior to the last day
for making an Election determined in accordance with paragraph (b) above or as
permitted by Section 21.3.
     21.3 Subsequent Elections. Any Award subject to Code Section 409A which
permits a subsequent Election to delay the distribution or change the form of
distribution in settlement of such Award shall comply with the following
requirements:
     (a) No subsequent Election may take effect until at least twelve
(12) months after the date on which the subsequent Election is made;
     (b) Each subsequent Election related to a distribution in settlement of an
Award not described in Section 21.4(b), 21.4 (c), or 21.4 (f) must result in a
delay of the distribution for a period of not less than five (5) years from the
date such distribution would otherwise have been made; and
     (c) No subsequent Election related to a distribution pursuant to
Section 21.4 (d) shall be made less than twelve (12) months prior to the date of
the first scheduled payment under such distribution.
     21.4 Distributions Pursuant to Deferral Elections. No distribution in
settlement of an Award subject to Code Section 409A may commence earlier than:
     (a) Separation from service (as determined by the Secretary of the United
States Treasury);
     (b) The date the Participant becomes Disabled (as defined below);
     (c) Death;
     (d) A specified time (or pursuant to a fixed schedule) that is either
(i) specified by the Committee upon the grant of an Award and set forth in the
Award Agreement evidencing such Award or (ii) specified by the Participant in an
Election complying with the requirements of Section 21.2 and/or 21.3, as
applicable;
     (e) To the extent provided by the Secretary of the U.S. Treasury, a change
in the ownership or effective control or the Company or in the ownership of a
substantial portion of the assets of the Company; or
     (f) The occurrence of an Unforeseeable Emergency (as defined below).

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     Notwithstanding anything else herein to the contrary, to the extent that a
Participant is a “Specified Employee” (as defined in Code
Section 409A(a)(2)(B)(i)) of the Company, no distribution pursuant to
Section 21.4(a) in settlement of an Award subject to Code Section 409A may be
made before the date which is six (6) months after such Participant’s date of
separation from service, or, if earlier, the date of the Participant’s death.
     21.5 Unforeseeable Emergency. The Committee shall have the authority to
provide in any Award subject to Code Section 409A for distribution in settlement
of all or a portion of such Award in the event that a Participant establishes,
to the satisfaction of the Committee, the occurrence of an Unforeseeable
Emergency. In such event, the amount(s) distributed with respect to such
Unforeseeable Emergency cannot exceed the amounts necessary to satisfy such
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of such distribution(s), after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship). All distributions with respect to an Unforeseeable
Emergency shall be made in a lump sum as soon as practicable following the
Committee’s determination that an Unforeseeable Emergency has occurred.
     The occurrence of an Unforeseeable Emergency shall be judged and determined
by the Committee. The Committee’s decision with respect to whether an
Unforeseeable Emergency has occurred and the manner in which, if at all, the
distribution in settlement of an Award shall be altered or modified, shall be
final, conclusive, and not subject to approval or appeal.
     21.6 Disabled. The Committee shall have the authority to provide in any
Award subject to Code Section 409A for distribution in settlement of such Award
in the event that the Participant becomes Disabled. A Participant shall be
considered “Disabled” if either:
     (a) the Participant is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, or
     (b) the Participant is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, receiving
income replacement benefits for a period of not less than three (3) months under
an accident and health plan covering employees of the Participant’s employer.
     All distributions payable by reason of a Participant becoming Disabled
shall be paid in a lump sum or in periodic installments as established by the
Participant’s Election, commencing as soon as practicable following the date the
Participant becomes Disabled. If the Participant has made no Election with
respect to distributions upon becoming Disabled, all such distributions shall be
paid in a lump sum as soon as practicable following the date the Participant
becomes Disabled.

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     21.7 Death. If a Participant dies before complete distribution of amounts
payable upon settlement of an Award subject to Code Section 409A, such
undistributed amounts shall be distributed to his or her beneficiary under the
distribution method for death established by the Participant’s Election as soon
as administratively possible following receipt by the Committee of satisfactory
notice and confirmation of the Participant’s death. If the Participant has made
no Election with respect to distributions upon death, all such distributions
shall be paid in a lump sum as soon as practicable following the date of the
Participant’s death.
     21.8 No Acceleration of Distributions. Notwithstanding anything to the
contrary herein, this Plan does not permit the acceleration of the time or
schedule of any distribution under this Plan, except as provided by Code
Section 409A and/or the Secretary of the U.S. Treasury.
Article 22. General Provisions
     22.1 Forfeiture Events.

  (a)   The Committee may specify in an Award Agreement that the Participant’s
rights, payments, and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture, or recoupment upon the occurrence of
certain specified events, in addition to any otherwise applicable vesting or
performance conditions of an Award. Such events may include, but shall not be
limited to, termination of Service for cause or otherwise, violation of material
Company and/or Affiliate policies, breach of noncompetition, confidentiality, or
other restrictive covenants that may apply to the Participant, or other conduct
by the Participant that is detrimental to the business or reputation of the
Company and/or its Affiliates.     (b)   If the Company is required to prepare
an accounting restatement due to the material noncompliance of the Company, as a
result of misconduct, with any financial reporting requirement under the
securities laws, any Participant who knowingly or through gross negligence
engaged in the misconduct, or who knowingly or through gross negligence failed
to prevent the misconduct, and any Participant who is one of the individuals
subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of
2002, shall reimburse the Company the amount of any payment in settlement of an
Award earned or accrued during the twelve- (12-) month period following the
first public issuance or filing with the United States Securities and Exchange
Commission (whichever first occurred) of the financial document embodying such
financial reporting requirement.

     22.2 Legends; Stop Transfer Instructions. Certificates for Shares may
include any legend and the Company may issue any stop transfer instructions with
respect to Shares which the Committee deems appropriate to reflect any
restrictions on transfer of such Shares.
     22.3 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural. Use of the term
“or” is not intended to be exclusive, unless the context clearly requires
otherwise.

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     22.4 Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
     22.5 Requirements of Law. The granting of Awards and the issuance of Shares
under this Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
     22.6 Delivery of Title. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under this Plan prior to:

  (a)   Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and     (b)   Completion of any
registration or other qualification of the Shares under any applicable national
or foreign law or ruling of any governmental body that the Company determines to
be necessary or advisable.

     22.7 Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
     22.8 Investment Representations. The Committee may require any individual
receiving Shares pursuant to an Award under this Plan to represent and warrant
in writing that the individual is acquiring the Shares for investment and
without any present intention to sell or distribute such Shares.
     22.9 Employees Based Outside of the United States. Notwithstanding any
provision of this Plan to the contrary, in order to comply with the laws in
other countries in which the Company and/or its Affiliates operate or have
Employees, Directors, or Third Party Service Providers, the Committee, in its
sole discretion, shall have the power and authority to:

  (a)   Determine which Affiliates shall be covered by this Plan;     (b)  
Determine which Employees and/or Directors or Third Party Service Providers
outside the United States are eligible to participate in this Plan;     (c)  
Modify the terms and conditions of any Award granted to Employees and/or
Directors or Third Party Service Providers outside the United States to comply
with applicable foreign laws;     (d)   Establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be
necessary or advisable. Any subplans and modifications to Plan terms and
procedures established under this Section 22.9 by the Committee shall be
attached to this Plan document as appendices; and

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  (e)   Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approval requirements.

     Notwithstanding the above, the Committee may not take any actions
hereunder, and no Awards shall be granted, that would violate applicable law.
     22.10 Uncertificated Shares. To the extent that this Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may be effected on a noncertificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange.
     22.11 Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company and/or its Affiliates may
make to aid it in meeting its obligations under this Plan. Nothing contained in
this Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company and any Participant, beneficiary, legal representative, or any other
individual. To the extent that any person acquires a right to receive payments
from the Company and/or its Affiliates under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company or an
Affiliate, as the case may be. All payments to be made hereunder shall be paid
from the general funds of the Company or an Affiliate, as the case may be, and
no special or separate fund shall be established and no segregation of assets
shall be made to assure payment of such amounts except as expressly set forth in
this Plan.
     22.12 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award. The Committee shall determine
whether cash, Awards, or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.
     22.13 Retirement and Welfare Plans. Neither Awards made under this Plan nor
Shares or cash paid pursuant to such Awards may be included as “compensation”
for purposes of computing the benefits payable to any Participant under the
Company’s or any Affiliate’s retirement plans (both qualified and non-qualified)
or welfare benefit plans unless such other plan expressly provides that such
compensation shall be taken into account in computing a Participant’s benefit.
     22.14 Nonexclusivity of this Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or Committee to
adopt such other compensation arrangements as it may deem desirable for any
Participant.
     22.15 No Constraint on Corporate Action. Nothing in this Plan shall be
construed to: (a) limit, impair, or otherwise affect the Company’s or an
Affiliate’s right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets; or (b) limit the right or power of the Company or an
Affiliate to take any action which such entity deems to be necessary or
appropriate.
     22.16 Governing Law. The Plan and each Award Agreement shall be governed by
the laws of the State of California, excluding any conflicts or choice of law
rule or principle that might otherwise

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refer construction or interpretation of this Plan to the substantive law of
another jurisdiction. Unless otherwise provided in the Award Agreement,
recipients of an Award under this Plan are deemed to submit to the exclusive
jurisdiction and venue of the federal or state courts of California, to resolve
any and all issues that may arise out of or relate to this Plan or any related
Award Agreement.
     22.17 Indemnification. Subject to requirements of Delaware law, each
individual who is or shall have been a member of the Board, or a Committee
appointed by the Board, or an officer of the Company to whom authority was
delegated in accordance with Article 3, shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under this Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company’s approval, or paid by him in satisfaction
of any judgement in any such action, suit, or proceeding against him, provided
he shall give the Company an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend it on his own behalf,
unless such loss, cost, liability, or expense is a result of his own willful
misconduct or except as expressly provided by statute.
     The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such individuals may be entitled under the
Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

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MAXTOR CORPORATION
RESTRICTED STOCK AGREEMENT
(For Persons Subject to Section 16 of the Exchange Act)
     Maxtor Corporation has granted to the Participant named in the Notice of
Grant of Restricted Stock (the “Notice”) to which this Restricted Stock
Agreement (the “Agreement”) is attached an Award consisting of Shares subject to
the terms and conditions set forth in the Notice and this Agreement. The Award
has been granted pursuant to the Maxtor Corporation 2005 Performance Incentive
Plan (the “Plan”), as amended to the Date of Grant, the provisions of which are
incorporated herein by reference. By signing the Notice, the Participant:
(a) acknowledges receipt of and represents that the Participant has read and is
familiar with the Notice, this Agreement, the Plan and a prospectus for the Plan
in the form most recently registered with the Securities and Exchange Commission
(the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and
conditions of the Notice, this Agreement and the Plan and (c) agrees to accept
as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Notice, this Agreement or the
Plan.
     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
     2. Administration.
          All questions of interpretation concerning the Notice and this
Agreement shall be determined by the Committee. All determinations by the
Committee shall be final and binding upon all persons having an interest in the
Award. Any officer of the Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.
     3. The Award.
          3.1 Grant and Issuance of Shares. On the Date of Grant, the
Participant shall acquire and the Company shall issue, subject to the provisions
of this Agreement, a number of Shares equal to the Total Number of Shares set
forth in the Notice. As a condition to the issuance of the Shares, the
Participant shall execute and deliver to the Company along with the Notice the
Assignment Separate from Certificate duly endorsed (with date and number of
Shares blank) in the form attached to the Notice.

 

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          3.2 No Monetary Payment Required. The Participant is not required to
make any monetary payment (other than applicable tax withholding, if any) as a
condition to receiving the Shares, the consideration for which shall be past
services actually rendered and/or future services to be rendered to the Company
and/or its Affiliates or for their benefit. Notwithstanding the foregoing, if
required by applicable state corporate law, the Participant shall furnish
consideration in the form of cash or past services rendered or for the benefit
of the Company and/or its Affiliates having not less than the par value of the
Shares issued pursuant to the Award.
          3.3 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
the Shares with the Company’s transfer agent, including any successor transfer
agent, to be held in book entry form during the term of the Escrow pursuant to
Section 6. Except as provided by the preceding sentence, a certificate for the
Shares shall be registered in the name of the Participant, or, if applicable, in
the names of the heirs of the Participant.
          3.4 Issuance of Shares in Compliance with Law. The issuance of the
Shares shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. No Shares shall
be issued hereunder if their issuance would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Shares
may then be listed. The inability of the Company to obtain from any regulatory
body having jurisdiction the authority, if any, deemed by the Company’s legal
counsel to be necessary to the lawful issuance of any Shares shall relieve the
Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained. As a condition to
the issuance of the Shares, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance
with any applicable law or regulation and to make any representation or warranty
with respect thereto as may be requested by the Company.
     4. Period of Restriction/Vesting of Shares.
          The Shares shall vest and become Vested Shares as provided in the
Notice; provided however, that Shares that would otherwise become Vested Shares
on a date on which a sale of such Shares by the Participant would violate the
Insider Trading Policy of the Company shall, not withstanding the vesting
schedule set forth in the Notice, become Vested Shares on the next day on which
such sale would not violate the Insider Trading Policy. For purposes of this
Section, “Insider Trading Policy” means the written policy of the Company
pertaining to the sale, transfer or other disposition of the Company’s equity
securities by members of the Board, officers or other employees who may possess
material, non-public information regarding the Company, as in effect at the time
of a disposition of any Shares. No additional Shares will become Vested Shares
following the Participant’s termination of Service for any reason.

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     5. Company Reacquisition Right.
          In the event that (a) the Participant’s Service terminates for any
reason or no reason, with or without cause, or (b) the Participant, the
Participant’s legal representative, or other holder of the Shares, attempts to
sell, exchange, transfer, pledge, or otherwise dispose of (other than pursuant
to a Change in Control) any Shares which are not Vested Shares (“Unvested
Shares”), the Company shall automatically reacquire the Unvested Shares and the
Participant shall not be entitled to any payment therefor (the “Company
Reacquisition Right”).
     6. Escrow.
          6.1 Appointment of Agent. To ensure that Shares subject to the Company
Reacquisition Right will be available for reacquisition, the Participant and the
Company hereby appoint the Secretary of the Company, or any other person
designated by the Company, as their agent and as attorney-in-fact for the
Participant (the “Agent”) to hold any and all Unvested Shares and to sell,
assign and transfer to the Company any such Unvested Shares reacquired by the
Company pursuant to the Company Reacquisition Right. The Participant understands
that appointment of the Agent is a material inducement to make this Agreement
and that such appointment is coupled with an interest and is irrevocable. The
Agent shall not be personally liable for any act the Agent may do or omit to do
hereunder as escrow agent, agent for the Company, or attorney in fact for the
Participant while acting in good faith and in the exercise of the Agent’s own
good judgment, and any act done or omitted by the Agent pursuant to the advice
of the Agent’s own attorneys shall be conclusive evidence of such good faith.
The Agent may rely upon any letter, notice or other document executed by any
signature purporting to be genuine and may resign at any time.
          6.2 Establishment of Escrow. The Participant authorizes the Company to
deposit the Unvested Shares with the Company’s transfer agent to be held in book
entry form, as provided in Section 3.3, and the Participant agrees to deliver to
and deposit with the Agent each certificate, if any, evidencing the Shares and
an Assignment Separate from Certificate with respect to such book entry shares
and each such certificate duly endorsed (with date and number of Shares blank)
in the form attached to the Notice, to be held by the Agent under the terms and
conditions of this Section 6 (the “Escrow”). Upon the occurrence of a Change in
Control or a change, as described in Section 8, in the character or amount of
any outstanding stock of the corporation the stock of which is subject to the
provisions of this Agreement, any and all new, substituted or additional
securities or other property to which the Participant is entitled by reason of
his or her ownership of the Shares that remain, following such Change in Control
or change described in Section 8, subject to the Company Reacquisition Right
shall be immediately subject to the Escrow to the same extent as the Shares
immediately before such event. The Company shall bear the expenses of the
Escrow.
          6.3 Delivery of Shares to Participant. The Escrow shall continue with
respect to any Shares for so long as such Shares remain subject to the Company
Reacquisition Right. Upon termination of the Reacquisition Right with respect to
Shares, the Company shall so notify the Agent and direct the Agent to deliver
such number of Shares to the Participant. As soon as practicable after receipt
of such notice, the Agent shall cause to be delivered to the Participant the
Shares specified by such notice, and the Escrow shall terminate with respect to
such Shares.

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     7. Tax Matters.
          7.1 Tax Withholding.
               (a) In General. At the time the Notice is executed, or at any
time thereafter as requested by the Company and/or its Affiliates, the
Participant hereby authorizes withholding from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for,
any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Company and/or its Affiliates, if any, which
arise in connection with the Award, including, without limitation, obligations
arising upon (a) the transfer of Shares to the Participant, (b) the lapsing of
any restriction with respect to any Shares, (c) the filing of an election to
recognize tax liability, or (d) the transfer by the Participant of any Shares.
The Company shall have no obligation to deliver the Shares or to release any
Shares from the Escrow established pursuant to Section 6 until the tax
withholding obligations of the Company and/or its Affiliates have been satisfied
by the Participant.
               (b) Withholding in Shares. The Participant may satisfy all or any
portion of the Company’s and/or its Affiliates’ tax withholding obligations by
requesting the Company to withhold a number of whole, Vested Shares otherwise
deliverable to the Participant or by tendering to the Company a number of whole,
Vested Shares or vested shares acquired otherwise than pursuant to the Award
having, in any such case, a fair market value, as determined by the Company as
of the date on which the tax withholding obligations arise, not in excess of the
amount of such tax withholding obligations determined by the applicable minimum
statutory withholding rates. Any adverse consequences to the Participant
resulting from the procedure permitted under this Section, including, without
limitation, tax consequences, shall be the sole responsibility of the
Participant.
          7.2 Election Under Section 83(b) of the Code.
               (a) The Participant understands that Section 83 of the Code taxes
as ordinary income the difference between the amount paid for the Shares, if
anything, and the fair market value of the Shares as of the date on which the
Shares are “substantially vested,” within the meaning of Section 83. In this
context, “substantially vested” means that the right of the Company to reacquire
the Shares pursuant to the Company Reacquisition Right has lapsed. The
Participant understands that he or she may elect to have his or her taxable
income determined at the time he or she acquires the Shares rather than when and
as the Company Reacquisition Right lapses by filing an election under Section
83(b) of the Code with the Internal Revenue Service no later than thirty
(30) days after the date of acquisition of the Shares. The Participant
understands that failure to make a timely filing under Section 83(b) will result
in his or her recognition of ordinary income, as the Company Reacquisition Right
lapses, on the difference between the purchase price, if anything, and the fair
market value of the Shares at the time such restrictions lapse. The Participant
further understands, however, that if Shares with respect to which an election
under Section 83(b) has been made are forfeited to the Company pursuant to its

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Company Reacquisition Right, such forfeiture will be treated as a sale on which
there is realized a loss equal to the excess (if any) of the amount paid (if
any) by the Participant for the forfeited Shares over the amount realized (if
any) upon their forfeiture. If the Participant has paid nothing for the
forfeited Shares and has received no payment upon their forfeiture, the
Participant understands that he or she will be unable to recognize any loss on
the forfeiture of the Shares even though the Participant incurred a tax
liability by making an election under Section 83(b).
               (b) The Participant understands that he or she should consult
with his or her tax advisor regarding the advisability of filing with the
Internal Revenue Service an election under Section 83(b) of the Code, which must
be filed no later than thirty (30) days after the date of the acquisition of the
Shares pursuant to this Agreement. Failure to file an election under Section
83(b), if appropriate, may result in adverse tax consequences to the
Participant. The Participant acknowledges that he or she has been advised to
consult with a tax advisor regarding the tax consequences to the Participant of
the acquisition of Shares hereunder. ANY ELECTION UNDER SECTION 83(b) THE
PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON
WHICH THE PARTICIPANT ACQUIRES THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED.
THE PARTICIPANT ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS
THE PARTICIPANT’S SOLE RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.
               (c) The Participant will notify the Company in writing if the
Participant files an election pursuant to Section 83(b) of the Code. The Company
intends, in the event it does not receive from the Participant evidence of such
filing, to claim a tax deduction for any amount which would otherwise be taxable
to the Participant in the absence of such an election.
     8. Adjustments in Authorized Shares.
          In the event of any corporate event or transaction (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company, combination
of Shares, exchange of Shares, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, or any similar corporate event or transaction, the Committee, in
its sole discretion, in order to prevent dilution or enlargement of
Participants’ rights under this Award, shall substitute or adjust, as
applicable, the number and kind of Shares that may be issued under this Award.
Any fractional share resulting from an adjustment pursuant to this Section 8
shall be rounded down to the nearest whole number. Such adjustments shall be
determined by the Committee, and its determination shall be final, binding and
conclusive.

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     9. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any Shares subject to the Award until the date of the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment shall be made for
dividends, distributions or other rights for which the record date is prior to
the date the Shares are issued, except as provided in Section 8. Subject the
provisions of this Agreement, the Participant shall exercise all rights and
privileges of a stockholder of the Company with respect to Shares deposited in
the Escrow pursuant to Section 6. If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between the Company and/or its Affiliates
and the Participant, the Participant’s employment is “at will” and is for no
specified term. Nothing in this Agreement shall confer upon the Participant any
right to continue in the Service of the Company and/or its Affiliates or
interfere in any way with any right of the Company and/or its Affiliates to
terminate the Participant’s Service at any time.
     10. Legends.
          The Company may at any time place legends referencing the Company
Reacquisition Right and any applicable federal, state or foreign securities law
restrictions on all certificates representing Shares issued pursuant to this
Agreement. The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing the Shares in the
possession of the Participant in order to carry out the provisions of this
Section. Unless otherwise specified by the Company, legends placed on such
certificates may include, but shall not be limited to, the following:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET
FORTH IN AN AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THIS CORPORATION.”
     11. Transfers in Violation of Agreement.
          No Shares may be sold, exchanged, transferred, assigned, pledged,
hypothecated or otherwise disposed of, including by operation of law, in any
manner which violates any of the provisions of this Agreement and, except
pursuant to a Change in Control, until the date on which such shares become
Vested Shares, and any such attempted disposition shall be void. The Company
shall not be required (a) to transfer on its books any Shares which will have
been transferred in violation of any of the provisions set forth in this
Agreement or (b) to treat as owner of such Shares or to accord the right to vote
as such owner or to pay dividends to any transferee to whom such Shares will
have been so transferred. In order to enforce its rights under this Section, the
Company shall be authorized to give a stop transfer instruction with respect to
the Shares to the Company’s transfer agent.

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     12. Miscellaneous Provisions.
          12.1 Amendment. The Committee may amend this Agreement at any time;
provided, however, that no such amendment may adversely affect the Participant’s
rights under this Agreement without the consent of the Participant. No amendment
or addition to this Agreement shall be effective unless in writing.
          12.2 Nontransferability of the Award. Rights to acquire Shares
pursuant to this Award shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights
with respect to the Award shall be exercisable during the Participant’s lifetime
only by the Participant or the Participant’s guardian or legal representative.
          12.3 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
          12.4 Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.
          12.5 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by the Company and/or its Affiliates, or upon
deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with
postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature to the Notice or at such other address as such
party may designate in writing from time to time to the other party.
               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Notice, this
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. In addition, the parties may deliver electronically any notices
called for in connection with the Escrow. Such means of electronic delivery may
include but do not necessarily include the delivery of a link to a Company
intranet or the internet site of a third party involved in administering the
Plan, the delivery of the document via e-mail or such other means of electronic
delivery specified by the Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 12.5(a) of this Agreement and consents to
the electronic delivery of the Plan documents and notices in connection with the
Escrow, as described in Section 12.5(a). The Participant acknowledges that he or
she may receive from the Company a

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paper copy of any documents delivered electronically at no cost to the
Participant by contacting the Chief Financial Officer of the Company by
telephone or in writing. The Participant further acknowledges that the
Participant will be provided with a paper copy of any documents if the attempted
electronic delivery of such documents fails. Similarly, the Participant
understands that the Participant must provide the Company or any designated
third party administrator with a paper copy of any documents if the attempted
electronic delivery of such documents fails. The Participant may revoke his or
her consent to the electronic delivery of documents described in 12.5(a) or may
change the electronic mail address to which such documents are to be delivered
(if Participant has provided an electronic mail address) at any time by
notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant
understands that he or she is not required to consent to electronic delivery of
documents described in Section 12.5(a).
          12.6 Integrated Agreement. The Notice, this Agreement and the Plan,
together with the Superseding Agreement, if any, shall constitute the entire
understanding and agreement of the Participant and the Company and/or its
Affiliates with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations,
or warranties among the Participant and the Company and/or its Affiliates with
respect to such subject matter other than those as set forth or provided for
herein or therein. To the extent contemplated herein or therein, the provisions
of the Notice and the Agreement shall survive any settlement of the Award and
shall remain in full force and effect.
          12.7 Applicable Law. This Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.
          12.8 Counterparts. The Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

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MAXTOR CORPORATION
RESTRICTED STOCK AGREEMENT
     Maxtor Corporation has granted to the Participant named in the Notice of
Grant of Restricted Stock (the “Notice”) to which this Restricted Stock
Agreement (the “Agreement”) is attached an Award consisting of Shares subject to
the terms and conditions set forth in the Notice and this Agreement. The Award
has been granted pursuant to the Maxtor Corporation 2005 Performance Incentive
Plan (the “Plan”), as amended to the Date of Grant, the provisions of which are
incorporated herein by reference. By signing the Notice, the Participant:
(a) acknowledges receipt of and represents that the Participant has read and is
familiar with the Notice, this Agreement, the Plan and a prospectus for the Plan
in the form most recently registered with the Securities and Exchange Commission
(the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and
conditions of the Notice, this Agreement and the Plan and (c) agrees to accept
as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Notice, this Agreement or the
Plan.
     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
     2. Administration.
          All questions of interpretation concerning the Notice and this
Agreement shall be determined by the Committee. All determinations by the
Committee shall be final and binding upon all persons having an interest in the
Award. Any officer of the Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.
     3. The Award.
          3.1 Grant and Issuance of Shares. On the Date of Grant, the
Participant shall acquire and the Company shall issue, subject to the provisions
of this Agreement, a number of Shares equal to the Total Number of Shares set
forth in the Notice. As a condition to the issuance of the Shares, the
Participant shall execute and deliver to the Company along with the Notice the
Assignment Separate from Certificate duly endorsed (with date and number of
Shares blank) in the form attached to the Notice.

 

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          3.2 No Monetary Payment Required. The Participant is not required to
make any monetary payment (other than applicable tax withholding, if any) as a
condition to receiving the Shares, the consideration for which shall be past
services actually rendered and/or future services to be rendered to the Company
and/or its Affiliates or for their benefit. Notwithstanding the foregoing, if
required by applicable state corporate law, the Participant shall furnish
consideration in the form of cash or past services rendered or for the benefit
of the Company and/or its Affiliates having not less than the par value of the
Shares issued pursuant to the Award.
          3.3 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
the Shares with the Company’s transfer agent, including any successor transfer
agent, to be held in book entry form during the term of the Escrow pursuant to
Section 6. Except as provided by the preceding sentence, a certificate for the
Shares shall be registered in the name of the Participant, or, if applicable, in
the names of the heirs of the Participant.
          3.4 Issuance of Shares in Compliance with Law. The issuance of the
Shares shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. No Shares shall
be issued hereunder if their issuance would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Shares
may then be listed. The inability of the Company to obtain from any regulatory
body having jurisdiction the authority, if any, deemed by the Company’s legal
counsel to be necessary to the lawful issuance of any Shares shall relieve the
Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained. As a condition to
the issuance of the Shares, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance
with any applicable law or regulation and to make any representation or warranty
with respect thereto as may be requested by the Company.
     4. Period of Restriction/Vesting of Shares.
          The Shares shall vest and become Vested Shares as provided in the
Notice; provided however, that Shares that would otherwise become Vested Shares
on a date on which a sale of such Shares by the Participant would violate the
Insider Trading Policy of the Company shall, not withstanding the vesting
schedule set forth in the Notice, become Vested Shares on the next day on which
such sale would not violate the Insider Trading Policy. For purposes of this
Section, “Insider Trading Policy” means the written policy of the Company
pertaining to the sale, transfer or other disposition of the Company’s equity
securities by members of the Board, officers or other employees who may possess
material, non-public information regarding the Company, as in effect at the time
of a disposition of any Shares. No additional Shares will become Vested Shares
following the Participant’s termination of Service for any reason.

2

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     5. Company Reacquisition Right.
          In the event that (a) the Participant’s Service terminates for any
reason or no reason, with or without cause, or (b) the Participant, the
Participant’s legal representative, or other holder of the Shares, attempts to
sell, exchange, transfer, pledge, or otherwise dispose of (other than pursuant
to a Change in Control) any Shares which are not Vested Shares (“Unvested
Shares”), the Company shall automatically reacquire the Unvested Shares and the
Participant shall not be entitled to any payment therefor (the “Company
Reacquisition Right”).
     6. Escrow.
          6.1 Appointment of Agent. To ensure that Shares subject to the Company
Reacquisition Right will be available for reacquisition, the Participant and the
Company hereby appoint the Secretary of the Company, or any other person
designated by the Company, as their agent and as attorney-in-fact for the
Participant (the “Agent”) to hold any and all Unvested Shares and to sell,
assign and transfer to the Company any such Unvested Shares reacquired by the
Company pursuant to the Company Reacquisition Right. The Participant understands
that appointment of the Agent is a material inducement to make this Agreement
and that such appointment is coupled with an interest and is irrevocable. The
Agent shall not be personally liable for any act the Agent may do or omit to do
hereunder as escrow agent, agent for the Company, or attorney in fact for the
Participant while acting in good faith and in the exercise of the Agent’s own
good judgment, and any act done or omitted by the Agent pursuant to the advice
of the Agent’s own attorneys shall be conclusive evidence of such good faith.
The Agent may rely upon any letter, notice or other document executed by any
signature purporting to be genuine and may resign at any time.
          6.2 Establishment of Escrow. The Participant authorizes the Company to
deposit the Unvested Shares with the Company’s transfer agent to be held in book
entry form, as provided in Section 0, and the Participant agrees to deliver to
and deposit with the Agent each certificate, if any, evidencing the Shares and
an Assignment Separate from Certificate with respect to such book entry shares
and each such certificate duly endorsed (with date and number of Shares blank)
in the form attached to the Notice, to be held by the Agent under the terms and
conditions of this Section 0 (the “Escrow”). Upon the occurrence of a Change in
Control or a change, as described in Section 0, in the character or amount of
any outstanding stock of the corporation the stock of which is subject to the
provisions of this Agreement, any and all new, substituted or additional
securities or other property to which the Participant is entitled by reason of
his or her ownership of the Shares that remain, following such Change in Control
or change described in Section 0, subject to the Company Reacquisition Right
shall be immediately subject to the Escrow to the same extent as the Shares
immediately before such event. The Company shall bear the expenses of the
Escrow.
          6.3 Delivery of Shares to Participant. The Escrow shall continue with
respect to any Shares for so long as such Shares remain subject to the Company
Reacquisition Right. Upon termination of the Reacquisition Right with respect to
Shares, the Company shall so notify the Agent and direct the Agent to deliver
such number of Shares to the Participant. As soon as practicable after receipt
of such notice, the Agent shall cause to be delivered to the

3

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Participant the Shares specified by such notice, and the Escrow shall terminate
with respect to such Shares.
     7. Tax Matters.
          7.1 Tax Withholding.
               (a) In General. At the time the Notice is executed, or at any
time thereafter as requested by the Company and/or its Affiliates, the
Participant hereby authorizes withholding from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for,
any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Company and/or its Affiliates, if any, which
arise in connection with the Award, including, without limitation, obligations
arising upon (a) the transfer of Shares to the Participant, (b) the lapsing of
any restriction with respect to any Shares, (c) the filing of an election to
recognize tax liability, or (d) the transfer by the Participant of any Shares.
The Company shall have no obligation to deliver the Shares or to release any
Shares from the Escrow established pursuant to Section 0 until the tax
withholding obligations of the Company and/or its Affiliates have been satisfied
by the Participant.
               (b) Withholding in Shares. The Company, in its discretion, shall
have the right, but not the obligation, to permit or require the Participant to
satisfy all or any portion of the Company’s and/or its Affiliates’ tax
withholding obligations by withholding a number of whole, Vested Shares
otherwise deliverable to the Participant or to accept from the Participant the
tender of a number of whole, Vested Shares or vested shares acquired otherwise
than pursuant to the Award having, in any such case, a fair market value, as
determined by the Company as of the date on which the tax withholding
obligations arise, not in excess of the amount of such tax withholding
obligations determined by the applicable minimum statutory withholding rates.
Any adverse consequences to the Participant resulting from the procedure
permitted under this Section, including, without limitation, tax consequences,
shall be the sole responsibility of the Participant.
          7.2 Election Under Section 83(b) of the Code.
               (a) The Participant understands that Section 83 of the Code taxes
as ordinary income the difference between the amount paid for the Shares, if
anything, and the fair market value of the Shares as of the date on which the
Shares are “substantially vested,” within the meaning of Section 83. In this
context, “substantially vested” means that the right of the Company to reacquire
the Shares pursuant to the Company Reacquisition Right has lapsed. The
Participant understands that he or she may elect to have his or her taxable
income determined at the time he or she acquires the Shares rather than when and
as the Company Reacquisition Right lapses by filing an election under Section
83(b) of the Code with the Internal Revenue Service no later than thirty
(30) days after the date of acquisition of the Shares. The Participant
understands that failure to make a timely filing under Section 83(b) will result
in his or her recognition of ordinary income, as the Company Reacquisition Right
lapses, on the difference between the purchase price, if anything, and the fair
market value of the Shares at the time such restrictions lapse. The Participant
further understands, however, that if Shares with respect to which an

4

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election under Section 83(b) has been made are forfeited to the Company pursuant
to its Company Reacquisition Right, such forfeiture will be treated as a sale on
which there is realized a loss equal to the excess (if any) of the amount paid
(if any) by the Participant for the forfeited Shares over the amount realized
(if any) upon their forfeiture. If the Participant has paid nothing for the
forfeited Shares and has received no payment upon their forfeiture, the
Participant understands that he or she will be unable to recognize any loss on
the forfeiture of the Shares even though the Participant incurred a tax
liability by making an election under Section 83(b).
               (b) The Participant understands that he or she should consult
with his or her tax advisor regarding the advisability of filing with the
Internal Revenue Service an election under Section 83(b) of the Code, which must
be filed no later than thirty (30) days after the date of the acquisition of the
Shares pursuant to this Agreement. Failure to file an election under Section
83(b), if appropriate, may result in adverse tax consequences to the
Participant. The Participant acknowledges that he or she has been advised to
consult with a tax advisor regarding the tax consequences to the Participant of
the acquisition of Shares hereunder. ANY ELECTION UNDER SECTION 83(b) THE
PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON
WHICH THE PARTICIPANT ACQUIRES THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED.
THE PARTICIPANT ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS
THE PARTICIPANT’S SOLE RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.
               (c) The Participant will notify the Company in writing if the
Participant files an election pursuant to Section 83(b) of the Code. The Company
intends, in the event it does not receive from the Participant evidence of such
filing, to claim a tax deduction for any amount which would otherwise be taxable
to the Participant in the absence of such an election.
     8. Adjustments in Authorized Shares.
          In the event of any corporate event or transaction (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company, combination
of Shares, exchange of Shares, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, or any similar corporate event or transaction, the Committee, in
its sole discretion, in order to prevent dilution or enlargement of
Participants’ rights under this Award, shall substitute or adjust, as
applicable, the number and kind of Shares that may be issued under this Award.
Any fractional share resulting from an adjustment pursuant to this Section 8
shall be rounded down to the nearest whole number. Such adjustments shall be
determined by the Committee, and its determination shall be final, binding and
conclusive.

5

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     9. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any Shares subject to the Award until the date of the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment shall be made for
dividends, distributions or other rights for which the record date is prior to
the date the Shares are issued, except as provided in Section 0. Subject the
provisions of this Agreement, the Participant shall exercise all rights and
privileges of a stockholder of the Company with respect to Shares deposited in
the Escrow pursuant to Section 0. If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between the Company and/or its Affiliates
and the Participant, the Participant’s employment is “at will” and is for no
specified term. Nothing in this Agreement shall confer upon the Participant any
right to continue in the Service of the Company and/or its Affiliates or
interfere in any way with any right of the Company and/or its Affiliates to
terminate the Participant’s Service at any time.
     10. Legends.
          The Company may at any time place legends referencing the Company
Reacquisition Right and any applicable federal, state or foreign securities law
restrictions on all certificates representing Shares issued pursuant to this
Agreement. The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing the Shares in the
possession of the Participant in order to carry out the provisions of this
Section. Unless otherwise specified by the Company, legends placed on such
certificates may include, but shall not be limited to, the following:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET
FORTH IN AN AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THIS CORPORATION.”
     11. Transfers in Violation of Agreement.
          No Shares may be sold, exchanged, transferred, assigned, pledged,
hypothecated or otherwise disposed of, including by operation of law, in any
manner which violates any of the provisions of this Agreement and, except
pursuant to a Change in Control, until the date on which such shares become
Vested Shares, and any such attempted disposition shall be void. The Company
shall not be required (a) to transfer on its books any Shares which will have
been transferred in violation of any of the provisions set forth in this
Agreement or (b) to treat as owner of such Shares or to accord the right to vote
as such owner or to pay dividends to any transferee to whom such Shares will
have been so transferred. In order to enforce its rights under this Section, the
Company shall be authorized to give a stop transfer instruction with respect to
the Shares to the Company’s transfer agent.

6

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     12. Miscellaneous Provisions.
          12.1 Amendment. The Committee may amend this Agreement at any time;
provided, however, that no such amendment may adversely affect the Participant’s
rights under this Agreement without the consent of the Participant. No amendment
or addition to this Agreement shall be effective unless in writing.
          12.2 Nontransferability of the Award. Rights to acquire Shares
pursuant to this Award shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights
with respect to the Award shall be exercisable during the Participant’s lifetime
only by the Participant or the Participant’s guardian or legal representative.
          12.3 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
          12.4 Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.
          12.5 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by the Company and/or its Affiliates, or upon
deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with
postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature to the Notice or at such other address as such
party may designate in writing from time to time to the other party.
               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Notice, this
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. In addition, the parties may deliver electronically any notices
called for in connection with the Escrow. Such means of electronic delivery may
include but do not necessarily include the delivery of a link to a Company
intranet or the internet site of a third party involved in administering the
Plan, the delivery of the document via e-mail or such other means of electronic
delivery specified by the Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 0 of this Agreement and consents to the
electronic delivery of the Plan documents and notices in connection with the
Escrow, as described in Section 0. The Participant acknowledges that he or she
may receive from the Company a paper copy of any

7

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documents delivered electronically at no cost to the Participant by contacting
the Chief Financial Officer of the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. Similarly, the Participant understands that the Participant
must provide the Company or any designated third party administrator with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 0 or may change the electronic mail
address to which such documents are to be delivered (if Participant has provided
an electronic mail address) at any time by notifying the Company of such revoked
consent or revised e-mail address by telephone, postal service or electronic
mail. Finally, the Participant understands that he or she is not required to
consent to electronic delivery of documents described in Section 0.
          12.6 Integrated Agreement. The Notice, this Agreement and the Plan,
together with the Superseding Agreement, if any, shall constitute the entire
understanding and agreement of the Participant and the Company and/or its
Affiliates with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations,
or warranties among the Participant and the Company and/or its Affiliates with
respect to such subject matter other than those as set forth or provided for
herein or therein. To the extent contemplated herein or therein, the provisions
of the Notice and the Agreement shall survive any settlement of the Award and
shall remain in full force and effect.
          12.7 Applicable Law. This Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.
          12.8 Counterparts. The Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

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MAXTOR CORPORATION
RESTRICTED STOCK UNITS AGREEMENT
(For Non-U.S. Participants)
     Maxtor Corporation has granted to the Participant named in the Notice of
Grant of Restricted Stock Units (the “Notice”) to which this Restricted Stock
Units Agreement (the “Agreement”) is attached an Award consisting of Restricted
Stock Units subject to the terms and conditions set forth in the Notice and this
Agreement. The Award has been granted pursuant to the Maxtor Corporation 2005
Performance Incentive Plan (the “Plan”), as amended to the Date of Grant, the
provisions of which are incorporated herein by reference. By signing the Notice,
the Participant: (a) acknowledges receipt of and represents that the Participant
has read and is familiar with the Notice, this Agreement, the Plan and a
prospectus for the Plan in the form most recently registered with the Securities
and Exchange Commission (the “Plan Prospectus”), (b) accepts the Award subject
to all of the terms and conditions of the Notice, this Agreement and the Plan
and (c) agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Notice,
this Agreement or the Plan.
     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.
               (a) “Dividend Equivalent Units” mean additional Restricted Stock
Units credited pursuant to Section 4.3.
               (b) “Units” mean the Restricted Stock Units originally granted
pursuant to the Award and the Dividend Equivalent Units credited pursuant to the
award, as both shall be adjusted from time to time pursuant to Section 10.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
     2. Certain Conditions of the Award.
          2.1 Compliance with Local Law. The Participant agrees that the
Participant will not acquire Shares pursuant to the Award or transfer, assign,
sell or otherwise deal with such Shares except in compliance with Local Law.
          2.2 Employment Conditions. In accepting the Award, the Participant
acknowledges that:

 

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               (a) Any notice period mandated under Local Law shall not be
treated as Service for the purpose of determining the vesting of the Award; and
the Participant’s right to receive Shares in settlement of the Award after
termination of Service, if any, will be measured by the date of termination of
the Participant’s active Service and will not be extended by any notice period
mandated under Local Law. Subject to the foregoing and the provisions of the
Plan, the Company, in its sole discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such termination.
               (b) The Plan is established voluntarily by the Company. It is
discretionary in nature and it may be modified, amended, suspended or terminated
by the Company at any time, unless otherwise provided in the Plan and this
Agreement.
               (c) The grant of the Award is voluntary and occasional and does
not create any contractual or other right to receive future grants of Award, or
benefits in lieu of Award, even if Award have been granted repeatedly in the
past.
               (d) All decisions with respect to future Award grants, if any,
will be at the sole discretion of the Company.
               (e) The Participant’s participation in the Plan shall not create
a right to further Service with the Company or any Affiliate and shall not
interfere with the ability of the Company or any Affiliate to terminate the
Participant’s Service at any time, with or without cause.
               (f) The Participant is voluntarily participating in the Plan.
               (g) The Award is an extraordinary item that does not constitute
compensation of any kind for Service of any kind rendered to the Company or any
Affiliate, and which is outside the scope of the Participant’s employment
contract, if any.
               (h) The Award is not part of normal or expected compensation or
salary for any purpose, including, but not limited to, calculating any
severance, resignation, termination, redundancy, end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments.
               (i) In the event that the Participant is not an employee of the
Company, the Award grant will not be interpreted to form an employment contract
or relationship with the Company; and furthermore the Award grant will not be
interpreted to form an employment contract with any Affiliate.
               (j) The future value of the underlying Shares is unknown and
cannot be predicted with certainty. If the Participant obtains Shares upon
settlement of the Award, the value of those Shares may increase or decrease.
               (k) No claim or entitlement to compensation or damages arises
from termination of the Award or diminution in value of the Award or Shares
acquired upon

2

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settlement of the Award resulting from termination of the Participant’s Service
(for any reason whether or not in breach of Local Law) and the Participant
irrevocably releases the Company and each Affiliate from any such claim that may
arise. If, notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen then, by signing this Agreement, the
Participant shall be deemed irrevocably to have waived the Participant’s
entitlement to pursue such a claim.
          2.3 Data Privacy Consent.
               (a) The Participant hereby explicitly and unambiguously consents
to the collection, use and transfer, in electronic or other form, of the
Participant’s personal data as described in this document by and among the
members of a group consisting of the Company and each Affiliate for the
exclusive purpose of implementing, administering and managing the Participant’s
participation in the Plan.
               (b) The Participant understands that the Company (including each
Affiliate) hold certain personal information about the Participant, including,
but not limited to, the Participant’s name, home address and telephone number,
date of birth, social insurance number or other identification number, salary,
nationality, job title, any Shares or directorships held in the Company, details
of all Awards or any other entitlement to Shares awarded, canceled, exercised,
vested, unvested or outstanding in the Participant’s favor, for the purpose of
implementing, administering and managing the Plan (“Data”). The Participant
understands that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients
may be located in the Participant’s country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
the Participant’s country. The Participant understands that he or she may
request a list with the names and addresses of any potential recipients of the
Data by contacting the Participant’s local human resources representative. The
Participant authorizes the recipients to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Participant’s participation in the
Plan, including any requisite transfer of such Data as may be required to a
broker or other third party with whom the Participant may elect to deposit any
shares acquired upon settlement of the Award. The Participant understands that
Data will be held only as long as is necessary to implement, administer and
manage the Participant’s participation in the Plan. The Participant understands
that he or she may, at any time, view Data, request additional information about
the storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing the Participant’s local human resources representative. The
Participant understands, however, that refusing or withdrawing the Participant’s
consent may affect the Participant’s ability to participate in the Plan. For
more information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant understands that he or she may contact
the Participant’s local human resources representative.

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     3. Administration.
          All questions of interpretation concerning the Notice and this
Agreement shall be determined by the Committee. All determinations by the
Committee shall be final and binding upon all persons having an interest in the
Award. Any officer of the Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.
     4. The Award.
          4.1 Grant of Restricted Stock Units. On the Date of Grant, the
Participant shall acquire, subject to the provisions of this Agreement, the
Number of Restricted Stock Units set forth in the Notice, subject to adjustment
as provided in Section 4.3 and Section 10. Each Unit represents a right to
receive on a date determined in accordance with the Notice and this Agreement
one (1) Share.
          4.2 No Monetary Payment Required. The Participant is not required to
make any monetary payment (other than applicable tax withholding, if any) as a
condition to receiving the Units or Shares issued upon settlement of the Units,
the consideration for which shall be past services actually rendered and/or
future services to be rendered to the Company and/or its Affiliates or for their
benefit. Notwithstanding the foregoing, if required by applicable state
corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to or for the benefit of the Company and/or its
Affiliates having a value not less than the par value of the Shares issued
pursuant to the Award.
          4.3 Dividend Equivalent Units. On the date that the Company pays a
cash dividend to holders of Shares generally, the Participant shall be credited
with a number of additional whole Dividend Equivalents Units determined by
dividing (a) the product of (i) the dollar amount of the cash dividend paid per
Share on such date and (ii) the total number of Restricted Stock Units and
Dividend Equivalent Units previously credited to the Participant pursuant to the
Award and which have not been settled or forfeited pursuant to the Company
Reacquisition Right (as defined below) as of such date, by (b) the Fair Market
Value per Share on such date. Any resulting fractional Dividend Equivalent Unit
shall be rounded to the nearest whole number. Such additional Dividend
Equivalent Units shall be subject to the same terms and conditions and shall be
settled or forfeited in the same manner and at the same time as the Restricted
Stock Units originally subject to the Award with respect to which they have been
credited.
     5. Period of Restriction/Vesting of Units.
          The Units shall vest and become Vested Units as provided in the
Notice.

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     6. Company Reacquisition Right.
          In the event that the Participant’s Service terminates for any reason
or no reason, with or without cause, the Participant shall forfeit and the
Company shall automatically reacquire all Units which are not, as of the time of
such termination, Vested Units, and the Participant shall not be entitled to any
payment therefor (the “Company Reacquisition Right”).
     7. Settlement of the Award.
          7.1 Issuance of Shares. Subject to the provisions of Section 7.3
below, the Company shall issue to the Participant, on the Settlement Date with
respect to each Unit to be settled on such date, one (1) Share; provided
however, that if such Settlement Date is a date on which a sale by the
Participant of the Share to be issued in settlement of such Unit would violate
the Insider Trading Policy of the Company, then the Settlement Date with respect
to such Unit shall be the earlier of (a) the next day on which such sale would
not violate the Insider Trading Policy or (b) the date that is two and one-half
(21/2) months from the end of the calendar year in which such Unit became a
Vested Unit. For purposes of this Section, “Insider Trading Policy” means the
written policy of the Company pertaining to the sale, transfer or other
disposition of the Company’s equity securities by members of the Board, officers
or other employees who may possess material, non-public information regarding
the Company, as in effect at the time of a disposition of any Shares. Shares
issued in settlement of Units shall not be subject to any restriction on
transfer other than any such restriction as may be required pursuant to
Section 7.3.
          7.2 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all Shares
acquired by the Participant pursuant to the settlement of the Award. Except as
provided by the preceding sentence, a certificate for the Shares as to which the
Award is settled shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
          7.3 Restrictions on Grant of the Award and Issuance of Shares. The
grant of the Award and issuance of Shares upon settlement of the Award shall be
subject to compliance with all applicable requirements of United States federal
or state law or Local Law with respect to such securities. No Shares may be
issued hereunder if the issuance of such Shares would constitute a violation of
any applicable federal, state or foreign securities laws, including Local Law,
or other law or regulations or the requirements of any stock exchange or market
system upon which the Shares may then be listed. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’ ’ s legal counsel to be necessary to the lawful issuance
of any Shares subject to the Award shall relieve the Company of any liability in
respect of the failure to issue such Shares as to which such requisite authority
shall not have been obtained. As a condition to the settlement of the Award, the
Company may require the Participant to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.
          7.4 Fractional Shares. The Company shall not be required to issue
fractional shares upon the settlement of the Award.

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     8. Tax Withholding.
          Regardless of any action taken by the Company or any Affiliate with
respect to any or all income tax, social insurance, payroll tax, payment on
account or other tax-related withholding (the “Tax Obligations”), the
Participant acknowledges that the ultimate liability for all Tax Obligations
legally due by the Participant is and remains the Participant’s responsibility
and that the Company (a) makes no representations or undertakings regarding the
treatment of any Tax Obligations in connection with any aspect of the Award,
including the grant, vesting or settlement of the Award, the subsequent sale of
Shares acquired pursuant to such settlement, or the receipt of any dividends and
(b) does not commit to structure the terms of the grant or any other aspect of
the Award to reduce or eliminate the Participant’s liability for Tax
Obligations. At the time of settlement of the Award, the Participant shall pay
or make adequate arrangements satisfactory to the Company to satisfy all
withholding obligations of the Company and any Affiliate. In this regard, at the
time the Award is settled, in whole or in part, or at any time thereafter as
requested by the Company or any Affiliate, the Participant hereby authorizes
withholding of all applicable Tax Obligations from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for
withholding of all applicable Tax Obligations, if any, by the Company and each
Affiliate which arise in connection with the Award. Alternatively, or in
addition, if permissible under applicable law, including Local Law, the Company
or an Affiliate may (i) sell or arrange for the sale of Shares acquired by the
Participant to satisfy the Tax Obligations, and/or (ii) withhold in Shares,
provided that only the amount of shares necessary to satisfy the minimum
withholding amount required by applicable law, including Local Law, is withheld.
Finally, the Participant shall pay to the Company or any Affiliate any amount of
the Tax Obligations that any such company may be required to withhold as a
result of the Participant’s participation in the Plan that cannot be satisfied
by the means previously described. The Company shall have no obligation to
process the settlement of the Award or to deliver Shares until the Tax
Obligations as described in this Section have been satisfied by the Participant.
     9. Effect of Change in Control on Award.
          In the event of a Change in Control, the Award, with respect to those
Units which are then Vested Units, shall be settled in accordance with Section 7
upon the consummation of the Change in Control.
     10. Adjustments in Authorized Shares.
     In the event of any corporate event or transaction (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company, combination
of Shares, exchange of Shares, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, or

6

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any similar corporate event or transaction, the Committee, in its sole
discretion, in order to prevent dilution or enlargement of Participants’ rights
under this Award, shall make appropriate and proportionate adjustments in the
number of Units subject to the Award and/or the number and kind of Shares to be
issued in settlement of the Award. Any fractional share resulting from an
adjustment pursuant to this Section shall be rounded down to the nearest whole
number. Such adjustments shall be determined by the Committee, and its
determination shall be final, binding and conclusive.
     11. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any Shares which may be issued in settlement of this Award until the date of the
issuance of the Shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date the Shares are issued, except as provided
in Section 4.3 and Section 10. If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between the Company and/or its Affiliates
and the Participant, the Participant’s employment is “at will” and is for no
specified term. Nothing in this Agreement shall confer upon the Participant any
right to continue in the Service of the Company and/or its Affiliates or
interfere in any way with any right of the Company and/or its Affiliates to
terminate the Participant’s Service at any time.
     12. Legends.
          The Company may at any time place legends referencing any applicable
federal, state or foreign securities law, including Local Law, restrictions on
all certificates representing Shares issued pursuant to this Agreement. The
Participant shall, at the request of the Company, promptly present to the
Company any and all certificates representing the Shares in the possession of
the Participant in order to carry out the provisions of this Section.
     13. Miscellaneous Provisions.
          13.1 Amendment. The Committee may amend this Agreement at any time;
provided, however, that no such amendment may adversely affect the Participant’s
rights under this Agreement without the consent of the Participant, except to
the extent such amendment is necessary to comply with applicable law, including,
but not limited to, Section 409A of the Code. No amendment or addition to this
Agreement shall be effective unless in writing.
          13.2 Nontransferability of the Award. Prior the issuance of Shares on
the applicable Settlement Date, neither this Award nor any Units subject to this
Award shall be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. All rights with respect to the Award
shall be exercisable during the Participant’s lifetime only by the Participant
or the Participant’s guardian or legal representative.

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          13.3 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
          13.4 Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.
          13.5 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by the Company and/or its Affiliates, or upon
deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with
postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature to the Notice or at such other address as such
party may designate in writing from time to time to the other party.
               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Notice, this
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the internet
site of a third party involved in administering the Plan, the delivery of the
document via e-mail or such other means of electronic delivery specified by the
Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 13.5(a) of this Agreement and consents to
the electronic delivery of the Plan documents as described in Section 13.5(a).
The Participant acknowledges that he or she may receive from the Company a paper
copy of any documents delivered electronically at no cost to the Participant by
contacting the Chief Financial Officer of the Company by telephone or in
writing. The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents if the attempted electronic delivery
of such documents fails. Similarly, the Participant understands that the
Participant must provide the Company or any designated third party administrator
with a paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 13.5(a) or may change the electronic
mail address to which such documents are to be delivered (if Participant has
provided an electronic mail address) at any time by notifying the Company of
such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant understands that he or she is not
required to consent to electronic delivery of documents described in
Section 13.5(a).

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          13.6 Integrated Agreement. The Notice, this Agreement and the Plan,
together with the Superseding Agreement, if any, shall constitute the entire
understanding and agreement of the Participant and the Company and/or its
Affiliates with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations,
or warranties among the Participant and the Company and/or its Affiliates with
respect to such subject matter other than those as set forth or provided for
herein or therein. To the extent contemplated herein or therein, the provisions
of the Notice and the Agreement shall survive any settlement of the Award and
shall remain in full force and effect.
          13.7 Applicable Law. This Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties as evidenced by this Agreement,
the parties hereby submit to and consent to the jurisdiction of the State of
California and agree that such litigation shall be conducted only in the courts
of the County of Santa Clara, California, or the federal courts of the United
States for the Northern District of California, and no other courts, where this
Agreement is made and/or performed.
          13.8 Counterparts. The Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

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MAXTOR CORPORATION
RESTRICTED STOCK UNITS AGREEMENT
     Maxtor Corporation has granted to the Participant named in the Notice of
Grant of Restricted Stock Units (the “Notice”) to which this Restricted Stock
Units Agreement (the “Agreement”) is attached an Award consisting of Restricted
Stock Units subject to the terms and conditions set forth in the Notice and this
Agreement. The Award has been granted pursuant to the Maxtor Corporation 2005
Performance Incentive Plan (the “Plan”), as amended to the Date of Grant, the
provisions of which are incorporated herein by reference. By signing the Notice,
the Participant: (a) acknowledges receipt of and represents that the Participant
has read and is familiar with the Notice, this Agreement, the Plan and a
prospectus for the Plan in the form most recently registered with the Securities
and Exchange Commission (the “Plan Prospectus”), (b) accepts the Award subject
to all of the terms and conditions of the Notice, this Agreement and the Plan
and (c) agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Notice,
this Agreement or the Plan.
     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.
               (a) “Dividend Equivalent Units” mean additional Restricted Stock
Units credited pursuant to Section 3.3.
               (b) “Units” mean the Restricted Stock Units originally granted
pursuant to the Award and the Dividend Equivalent Units credited pursuant to the
award, as both shall be adjusted from time to time pursuant to Section 9.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
     2. Administration.
          All questions of interpretation concerning the Notice and this
Agreement shall be determined by the Committee. All determinations by the
Committee shall be final and binding upon all persons having an interest in the
Award. Any officer of the Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

 

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     3. The Award.
          3.1 Grant of Restricted Stock Units. On the Date of Grant, the
Participant shall acquire, subject to the provisions of this Agreement, the
Number of Restricted Stock Units set forth in the Notice, subject to adjustment
as provided in Section 3.3 and Section 9. Each Unit represents a right to
receive on a date determined in accordance with the Notice and this Agreement
one (1) Share.
          3.2 No Monetary Payment Required. The Participant is not required to
make any monetary payment (other than applicable tax withholding, if any) as a
condition to receiving the Units or Shares issued upon settlement of the Units,
the consideration for which shall be past services actually rendered and/or
future services to be rendered to the Company and/or its Affiliates or for their
benefit. Notwithstanding the foregoing, if required by applicable state
corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to or for the benefit of the Company and/or its
Affiliates having a value not less than the par value of the Shares issued
pursuant to the Award.
          3.3 Dividend Equivalent Units. On the date that the Company pays a
cash dividend to holders of Shares generally, the Participant shall be credited
with a number of additional whole Dividend Equivalents Units determined by
dividing (a) the product of (i) the dollar amount of the cash dividend paid per
Share on such date and (ii) the total number of Restricted Stock Units and
Dividend Equivalent Units previously credited to the Participant pursuant to the
Award and which have not been settled or forfeited pursuant to the Company
Reacquisition Right (as defined below) as of such date, by (b) the Fair Market
Value per Share on such date. Any resulting fractional Dividend Equivalent Unit
shall be rounded to the nearest whole number. Such additional Dividend
Equivalent Units shall be subject to the same terms and conditions and shall be
settled or forfeited in the same manner and at the same time as the Restricted
Stock Units originally subject to the Award with respect to which they have been
credited.
     4. Period of Restriction/Vesting of Units.
          The Units shall vest and become Vested Units as provided in the
Notice.
     5. Company Reacquisition Right.
          In the event that the Participant’s Service terminates for any reason
or no reason, with or without cause, the Participant shall forfeit and the
Company shall automatically reacquire all Units which are not, as of the time of
such termination, Vested Units, and the Participant shall not be entitled to any
payment therefor (the “Company Reacquisition Right”).
     6. Settlement of the Award.
          6.1 Issuance of Shares. Subject to the provisions of Section 6.3
below, the Company shall issue to the Participant, on the Settlement Date with
respect to each Unit to be settled on such date, one (1) Share; provided
however, that if such Settlement Date is a date on

2

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which a sale by the Participant of the Share to be issued in settlement of such
Unit would violate the Insider Trading Policy of the Company, then the
Settlement Date with respect to such Unit shall be the earlier of (a) the next
day on which such sale would not violate the Insider Trading Policy or (b) the
date that is two and one-half (21/2) months from the end of the calendar year in
which such Unit became a Vested Unit. For purposes of this Section, “Insider
Trading Policy” means the written policy of the Company pertaining to the sale,
transfer or other disposition of the Company’s equity securities by members of
the Board, officers or other employees who may possess material, non-public
information regarding the Company, as in effect at the time of a disposition of
any Shares. Shares issued in settlement of Units shall not be subject to any
restriction on transfer other than any such restriction as may be required
pursuant to Section 6.3.
          6.2 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all Shares
acquired by the Participant pursuant to the settlement of the Award. Except as
provided by the preceding sentence, a certificate for the Shares as to which the
Award is settled shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
          6.3 Restrictions on Grant of the Award and Issuance of Shares. The
grant of the Award and issuance of Shares upon settlement of the Award shall be
subject to compliance with all applicable requirements of federal, state or
foreign law with respect to such securities. No Shares may be issued hereunder
if the issuance of such Shares would constitute a violation of any applicable
federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Shares may
then be listed. The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Company’ ’ s legal
counsel to be necessary to the lawful issuance of any Shares subject to the
Award shall relieve the Company of any liability in respect of the failure to
issue such Shares as to which such requisite authority shall not have been
obtained. As a condition to the settlement of the Award, the Company may require
the Participant to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.
          6.4 Fractional Shares. The Company shall not be required to issue
fractional shares upon the settlement of the Award.
     7. Tax Withholding.
          7.1 In General. At the time the Notice is executed, or at any time
thereafter as requested by the Company and/or its Affiliates, the Participant
hereby authorizes withholding from payroll and any other amounts payable to the
Participant, and otherwise agrees to make adequate provision for, any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company and/or its Affiliates, if any, which arise in
connection with the Award or the issuance of Shares in settlement thereof. The
Company shall have no obligation to deliver Shares until the tax withholding
obligations of the Company have been satisfied by the Participant.

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          7.2 Withholding in Shares. The Company, it its discretion, shall have
the right, but not the obligation, to permit or require the Participant to
satisfy all or any portion of the Company’s and/or its Affiliates’ tax
withholding obligations by withholding a number of whole Shares otherwise
deliverable to the Participant in settlement of the Award having a fair market
value, as determined by the Company as of the date on which the tax withholding
obligations arise, not in excess of the amount of such tax withholding
obligations determined by the applicable minimum statutory withholding rates.
Any adverse consequences to the Participant resulting from the procedure
permitted under this Section, including, without limitation, tax consequences,
shall be the sole responsibility of the Participant.
     8. Effect of Change in Control on Award.
          In the event of a Change in Control, the Award, with respect to those
Units which are then Vested Units, shall be settled in accordance with Section 6
upon the consummation of the Change in Control.
     9. Adjustments in Authorized Shares.
          In the event of any corporate event or transaction (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company, combination
of Shares, exchange of Shares, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, or any similar corporate event or transaction, the Committee, in
its sole discretion, in order to prevent dilution or enlargement of
Participants’ rights under this Award, shall make appropriate and proportionate
adjustments in the number of Units subject to the Award and/or the number and
kind of Shares to be issued in settlement of the Award. Any fractional share
resulting from an adjustment pursuant to this Section 9 shall be rounded down to
the nearest whole number. Such adjustments shall be determined by the Committee,
and its determination shall be final, binding and conclusive.
     10. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any Shares which may be issued in settlement of this Award until the date of the
issuance of the Shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date the Shares are issued, except as provided
in Section 3.3 and Section 9. If the Participant is an Employee, the Participant
understands and acknowledges that, except as otherwise provided in a separate,
written employment agreement between the Company and/or its Affiliates and the
Participant, the Participant’s employment is “at will” and is for no specified
term. Nothing in this Agreement shall confer upon the Participant any right to
continue in the Service of the Company and/or its Affiliates or interfere in any
way with any right of the Company and/or its Affiliates to terminate the
Participant’s Service at any time.

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     11. Legends.
          The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing Shares issued pursuant to this Agreement. The Participant shall, at
the request of the Company, promptly present to the Company any and all
certificates representing the Shares in the possession of the Participant in
order to carry out the provisions of this Section.
     12. Miscellaneous Provisions.
          12.1 Amendment. The Committee may amend this Agreement at any time;
provided, however, that no such amendment may adversely affect the Participant’s
rights under this Agreement without the consent of the Participant, except to
the extent such amendment is necessary to comply with applicable law, including,
but not limited to, Section 409A of the Code. No amendment or addition to this
Agreement shall be effective unless in writing.
          12.2 Nontransferability of the Award. Prior the issuance of Shares on
the applicable Settlement Date, neither this Award nor any Units subject to this
Award shall be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. All rights with respect to the Award
shall be exercisable during the Participant’s lifetime only by the Participant
or the Participant’s guardian or legal representative.
          12.3 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
          12.4 Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.
          12.5 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by the Company and/or its Affiliates, or upon
deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with
postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature to the Notice or at such other address as such
party may designate in writing from time to time to the other party.

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               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Notice, this
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the internet
site of a third party involved in administering the Plan, the delivery of the
document via e-mail or such other means of electronic delivery specified by the
Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 12.5(a) of this Agreement and consents to
the electronic delivery of the Plan documents as described in Section 12.5(a).
The Participant acknowledges that he or she may receive from the Company a paper
copy of any documents delivered electronically at no cost to the Participant by
contacting the Chief Financial Officer of the Company by telephone or in
writing. The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents if the attempted electronic delivery
of such documents fails. Similarly, the Participant understands that the
Participant must provide the Company or any designated third party administrator
with a paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 12.5(a) or may change the electronic
mail address to which such documents are to be delivered (if Participant has
provided an electronic mail address) at any time by notifying the Company of
such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant understands that he or she is not
required to consent to electronic delivery of documents described in
Section 12.5(a).
          12.6 Integrated Agreement. The Notice, this Agreement and the Plan,
together with the Superseding Agreement, if any, shall constitute the entire
understanding and agreement of the Participant and the Company and/or its
Affiliates with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations,
or warranties among the Participant and the Company and/or its Affiliates with
respect to such subject matter other than those as set forth or provided for
herein or therein. To the extent contemplated herein or therein, the provisions
of the Notice and the Agreement shall survive any settlement of the Award and
shall remain in full force and effect.
          12.7 Applicable Law. This Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.
          12.8 Counterparts. The Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

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MAXTOR CORPORATION
RESTRICTED STOCK UNITS AGREEMENT
(FOR PERSONS SUBJECT TO SECTION 16 OF THE EXCHANGE ACT)
     Maxtor Corporation has granted to the Participant named in the Notice of
Grant of Restricted Stock Units (the “NOTICE”) to which this Restricted Stock
Units Agreement (the “AGREEMENT”) is attached an Award consisting of Restricted
Stock Units subject to the terms and conditions set forth in the Notice and this
Agreement. The Award has been granted pursuant to the Maxtor Corporation 2005
Performance Incentive Plan (the “PLAN”), as amended to the Date of Grant, the
provisions of which are incorporated herein by reference. By signing the Notice,
the Participant: (a) acknowledges receipt of and represents that the Participant
has read and is familiar with the Notice, this Agreement, the Plan and a
prospectus for the Plan in the form most recently registered with the Securities
and Exchange Commission (the “PLAN PROSPECTUS”), (b) accepts the Award subject
to all of the terms and conditions of the Notice, this Agreement and the Plan
and (c) agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Notice,
this Agreement or the Plan.
     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.
               (a) “Dividend Equivalent Units” mean additional Restricted Stock
Units credited pursuant to Section 3.3.
               (b) “Units” mean the Restricted Stock Units originally granted
pursuant to the Award and the Dividend Equivalent Units credited pursuant to the
award, as both shall be adjusted from time to time pursuant to Section 9.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
     2.  Administration.
          All questions of interpretation concerning the Notice and this
Agreement shall be determined by the Committee. All determinations by the
Committee shall be final and binding upon all persons having an interest in the
Award. Any officer of the Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

 

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     3. The Award.
          3.1 Grant of Restricted Stock Units. On the Date of Grant, the
Participant shall acquire, subject to the provisions of this Agreement, the
Number of Restricted Stock Units set forth in the Notice, subject to adjustment
as provided in Section 3.3 and Section 9. Each Unit represents a right to
receive on a date determined in accordance with the Notice and this Agreement
one (1) Share.
          3.2 No Monetary Payment Required. The Participant is not required to
make any monetary payment (other than applicable tax withholding, if any) as a
condition to receiving the Units or Shares issued upon settlement of the Units,
the consideration for which shall be past services actually rendered and/or
future services to be rendered to the Company and/or its Affiliates or for their
benefit. Notwithstanding the foregoing, if required by applicable state
corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to or for the benefit of the Company and/or its
Affiliates having a value not less than the par value of the Shares issued
pursuant to the Award.
          3.3 Dividend Equivalent Units. On the date that the Company pays a
cash dividend to holders of Shares generally, the Participant shall be credited
with a number of additional whole Dividend Equivalents Units determined by
dividing (a) the product of (i) the dollar amount of the cash dividend paid per
Share on such date and (ii) the total number of Restricted Stock Units and
Dividend Equivalent Units previously credited to the Participant pursuant to the
Award and which have not been settled or forfeited pursuant to the Company
Reacquisition Right (as defined below) as of such date, by (b) the Fair Market
Value per Share on such date. Any resulting fractional Dividend Equivalent Unit
shall be rounded to the nearest whole number. Such additional Dividend
Equivalent Units shall be subject to the same terms and conditions and shall be
settled or forfeited in the same manner and at the same time as the Restricted
Stock Units originally subject to the Award with respect to which they have been
credited.
     4. Period of Restriction/Vesting of Units.
          The Units shall vest and become Vested Units as provided in the
Notice.
     5.  Company Reacquisition Right.
          In the event that the Participant’s Service terminates for any reason
or no reason, with or without cause, the Participant shall forfeit and the
Company shall automatically reacquire all Units which are not, as of the time of
such termination, Vested Units, and the Participant shall not be entitled to any
payment therefor (the “COMPANY REACQUISITION RIGHT”).
     6.  Settlement of the Award.
          6.1 Issuance of Shares. Subject to the provisions of Section 6.3
below, the Company shall issue to the Participant, on the Settlement Date with
respect to each Unit to be settled on such date, one (1) Share; provided
however, that if such Settlement Date is a date on

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which a sale by the Participant of the Share to be issued in settlement of such
Unit would violate the Insider Trading Policy of the Company, then the
Settlement Date with respect to such Unit shall be the earlier of (a) the next
day on which such sale would not violate the Insider Trading Policy or (b) the
date that is two and one-half (2 1/2) months from the end of the calendar year
in which such Unit became a Vested Unit. For purposes of this Section, “INSIDER
TRADING POLICY” means the written policy of the Company pertaining to the sale,
transfer or other disposition of the Company’s equity securities by members of
the Board, officers or other employees who may possess material, non-public
information regarding the Company, as in effect at the time of a disposition of
any Shares. Shares issued in settlement of Units shall not be subject to any
restriction on transfer other than any such restriction as may be required
pursuant to Section 6.3.
          6.2 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all Shares
acquired by the Participant pursuant to the settlement of the Award. Except as
provided by the preceding sentence, a certificate for the Shares as to which the
Award is settled shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
          6.3 Restrictions on Grant of the Award and Issuance of Shares. The
grant of the Award and issuance of Shares upon settlement of the Award shall be
subject to compliance with all applicable requirements of federal, state or
foreign law with respect to such securities. No Shares may be issued hereunder
if the issuance of such Shares would constitute a violation of any applicable
federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Shares may
then be listed. The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Company“s legal counsel
to be necessary to the lawful issuance of any Shares subject to the Award shall
relieve the Company of any liability in respect of the failure to issue such
Shares as to which such requisite authority shall not have been obtained. As a
condition to the settlement of the Award, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate,
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Company.
          6.4 Fractional Shares. The Company shall not be required to issue
fractional shares upon the settlement of the Award.
     7. Tax Withholding.
          7.1 In General. At the time the Notice is executed, or at any time
thereafter as requested by the Company and/or its Affiliates, the Participant
hereby authorizes withholding from payroll and any other amounts payable to the
Participant, and otherwise agrees to make adequate provision for, any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company and/or its Affiliates, if any, which arise in
connection with the Award or the issuance of Shares in settlement thereof. The
Company shall have no obligation to deliver Shares until the tax withholding
obligations of the Company have been satisfied by the Participant.

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          7.2 Withholding in Shares. The Participant may satisfy all or any
portion of the Company’s and/or its Affiliates’ tax withholding obligations by
requesting the Company to withhold a number of whole Shares otherwise
deliverable to the Participant in settlement of the Award having a fair market
value, as determined by the Company as of the date on which the tax withholding
obligations arise, not in excess of the amount of such tax withholding
obligations determined by the applicable minimum statutory withholding rates.
Any adverse consequences to the Participant resulting from the procedure
permitted under this Section, including, without limitation, tax consequences,
shall be the sole responsibility of the Participant.
     8.  Effect of Change in Control on Award.
          In the event of a Change in Control, the Award, with respect to those
Units which are then Vested Units, shall be settled in accordance with Section 6
upon the consummation of the Change in Control.
     9.  Adjustments in Authorized Shares.
          In the event of any corporate event or transaction (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company, combination
of Shares, exchange of Shares, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, or any similar corporate event or transaction, the Committee, in
its sole discretion, in order to prevent dilution or enlargement of
Participants’ rights under this Award, shall make appropriate and proportionate
adjustments in the number of Units subject to the Award and/or the number and
kind of Shares to be issued in settlement of the Award. Any fractional share
resulting from an adjustment pursuant to this Section 9 shall be rounded down to
the nearest whole number. Such adjustments shall be determined by the Committee,
and its determination shall be final, binding and conclusive.
     10. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any Shares which may be issued in settlement of this Award until the date of the
issuance of the Shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date the Shares are issued, except as provided
in Section 3.3 and Section 9. If the Participant is an Employee, the Participant
understands and acknowledges that, except as otherwise provided in a separate,
written employment agreement between the Company and/or its Affiliates and the
Participant, the Participant’s employment is “at will” and is for no specified
term. Nothing in this Agreement shall confer upon the Participant any right to
continue in the Service of the Company and/or its Affiliates or interfere in any
way with any right of the Company and/or its Affiliates to terminate the
Participant’s Service at any time.

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     11.  Legends.
          The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing Shares issued pursuant to this Agreement. The Participant shall, at
the request of the Company, promptly present to the Company any and all
certificates representing the Shares in the possession of the Participant in
order to carry out the provisions of this Section.
     12.  Miscellaneous Provisions.
          12.1 Amendment. The Committee may amend this Agreement at any time;
provided, however, that no such amendment may adversely affect the Participant’s
rights under this Agreement without the consent of the Participant, except to
the extent such amendment is necessary to comply with applicable law, including,
but not limited to, Section 409A of the Code. No amendment or addition to this
Agreement shall be effective unless in writing.
          12.2 Nontransferability of the Award. Prior the issuance of Shares on
the applicable Settlement Date, neither this Award nor any Units subject to this
Award shall be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. All rights with respect to the Award
shall be exercisable during the Participant’s lifetime only by the Participant
or the Participant’s guardian or legal representative.
          12.3 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
          12.4 Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.
          12.5 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by the Company and/or its Affiliates, or upon
deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with
postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature to the Notice or at such other address as such
party may designate in writing from time to time to the other party.

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               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Notice, this
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the internet
site of a third party involved in administering the Plan, the delivery of the
document via e-mail or such other means of electronic delivery specified by the
Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 12.5(a) of this Agreement and consents to
the electronic delivery of the Plan documents as described in Section 12.5(a).
The Participant acknowledges that he or she may receive from the Company a paper
copy of any documents delivered electronically at no cost to the Participant by
contacting the Chief Financial Officer of the Company by telephone or in
writing. The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents if the attempted electronic delivery
of such documents fails. Similarly, the Participant understands that the
Participant must provide the Company or any designated third party administrator
with a paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 12.5(a) or may change the electronic
mail address to which such documents are to be delivered (if Participant has
provided an electronic mail address) at any time by notifying the Company of
such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant understands that he or she is not
required to consent to electronic delivery of documents described in Section
12.5(a).
          12.6 Integrated Agreement. The Notice, this Agreement and the Plan,
together with the Superseding Agreement, if any, shall constitute the entire
understanding and agreement of the Participant and the Company and/or its
Affiliates with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations,
or warranties among the Participant and the Company and/or its Affiliates with
respect to such subject matter other than those as set forth or provided for
herein or therein. To the extent contemplated herein or therein, the provisions
of the Notice and the Agreement shall survive any settlement of the Award and
shall remain in full force and effect.
          12.7 Applicable Law. This Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.
          12.8 Counterparts. The Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

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MAXTOR CORPORATION
STOCK OPTION AGREEMENT
     Maxtor Corporation has granted to the individual (the “Participant”) named
in the Notice of Grant of Stock Option (the “Notice”) to which this Stock Option
Agreement (the “Option Agreement”) is attached an option (the “Option”) to
purchase certain Shares upon the terms and conditions set forth in the Notice
and this Option Agreement. The Option has been granted pursuant to and shall in
all respects be subject to the terms and conditions of the Maxtor Corporation
2005 Performance Incentive Plan (the “Plan”), as amended to the Date of Grant,
the provisions of which are incorporated herein by reference. By signing the
Notice, the Participant: (a) acknowledges receipt of and represents that the
Participant has read and is familiar with the Notice, this Option Agreement, the
Plan and a prospectus for the Plan in the form most recently registered with the
Securities and Exchange Commission (the “Plan Prospectus”), (b) accepts the
Option subject to all of the terms and conditions of the Notice, this Option
Agreement and the Plan and (c) agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising
under the Notice, the Plan or this Option Agreement.
     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise.
     2. Tax Status of Option.
          This Option is intended to be a Nonqualified Stock Option and shall
not be treated as an Incentive Stock Option within the meaning of Section 422(b)
of the Code.
     3. Administration.
          All questions of interpretation concerning this Option Agreement shall
be determined by the Committee. All determinations by the Committee shall be
final and binding upon all persons having an interest in the Option. Any officer
of the Company shall have the authority to act on behalf of the Company with
respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

 

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     4. Exercise of the Option.
          4.1 Right to Exercise. Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Vesting Date and prior to the
termination of the Option (as provided in Section 6) in an amount not to exceed
the number of Vested Shares less the number of Shares previously acquired upon
exercise of the Option. In no event shall the Option be exercisable for more
Shares than the Number of Option Shares, as adjusted pursuant to Section 9.
          4.2 Method of Exercise. Exercise of the Option shall be by means of
electronic or written notice (the “Exercise Notice”) in a form authorized by the
Company. An electronic Exercise Notice must be digitally signed or authenticated
by the Participant in such manner as required by the notice and transmitted to
the Chief Financial Officer of the Company or other authorized representative of
the Company (including a third-party administrator designated by the Company).
In the event that the Participant is not authorized or is unable to provide an
electronic Exercise Notice, the Option shall be exercised by a written Exercise
Notice addressed to the Company, which shall be signed by the Participant and
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Chief Financial Officer of the Company, or other authorized
representative of the Company (including a third-party administrator designated
by the Company). Each Exercise Notice, whether electronic or written, must state
the Participant’s election to exercise the Option, the number of whole Shares
for which the Option is being exercised and such other representations and
agreements as to the Participant’s investment intent with respect to such Shares
as may be required pursuant to the provisions of this Option Agreement. Further,
each Exercise Notice must be received by the Company prior to the termination of
the Option as set forth in Section 6 and must be accompanied by full payment of
the aggregate Option Price for the number of Shares being purchased. The Option
shall be deemed to be exercised upon receipt by the Company of such electronic
or written Exercise Notice and the aggregate Option Price.
          4.3 Payment of Option Price.
               (a) Forms of Consideration Authorized. Except as otherwise
provided below, payment of the aggregate Option Price for the number of Shares
for which the Option is being exercised shall be made (i) in cash or by check or
cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of whole Shares owned by the Participant having a Fair Market Value not less
than the aggregate Option Price, (iii) by means of a Cashless Exercise, as
defined in Section 4.3(b), or (iv) by any combination of the foregoing.
               (b) Limitations on Forms of Consideration.
                    (i) Tender of Shares. Notwithstanding the foregoing, the
Option may not be exercised by tender to the Company, or attestation to the
ownership, of Shares to the extent such tender or attestation would constitute a
violation of the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock. If required by the Company, the Option may
not be exercised by tender to the Company, or attestation to the

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ownership, of Shares unless such shares either have been owned by the
Participant for more than six (6) months or such other period, if any, required
by the Company (and not used for another option exercise by attestation during
such period) or were not acquired, directly or indirectly, from the Company.
               (ii) Cashless Exercise. A “Cashless Exercise” means the delivery
of a properly executed notice together with irrevocable instructions to a broker
in a form acceptable to the Company providing for the assignment to the Company
of the proceeds of a sale or loan with respect to some or all of the Shares
acquired upon the exercise of the Option pursuant to a program or procedure
approved by the Company (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from time to time
by the Board of Governors of the Federal Reserve System). The Company reserves,
at any and all times, the right, in the Company’s sole and absolute discretion,
to establish, decline to approve or terminate any such program or procedure,
including with respect to the Participant, notwithstanding that such program or
procedure may be available to others.
          4.4 Tax Withholding. At the time the Option is exercised, in whole or
in part, or at any time thereafter as requested by the Company, the Participant
hereby authorizes withholding from payroll and any other amounts payable to the
Participant, and otherwise agrees to make adequate provision for (including by
means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company and/or its Affiliates, if any, which arise in
connection with the Option. The Option is not exercisable unless the tax
withholding obligations of the Company and/or its Affiliates are satisfied.
Accordingly, the Company shall have no obligation to deliver Shares until the
tax withholding obligations of the Company and/or its Affiliates have been
satisfied by the Participant.
          4.5 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all shares
acquired by the Participant pursuant to the exercise of the Option. Except as
provided by the preceding sentence, a certificate for the Shares as to which the
Option is exercised shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
          4.6 Restrictions on Grant of the Option and Issuance of Shares. The
grant of the Option and the issuance of Shares upon exercise of the Option shall
be subject to compliance with all applicable requirements of federal, state or
foreign law with respect to such securities. The Option may not be exercised if
the issuance of Shares upon exercise would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Shares
may then be listed. In addition, the Option may not be exercised unless (i) a
registration statement under the Securities Act of 1933, as amended, (the
“Securities Act”) shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (ii) in the
opinion of legal counsel to the Company, the shares issuable upon exercise of
the Option may be issued in accordance with the terms of an applicable exemption
from the

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registration requirements of the Securities Act. THE PARTICIPANT IS CAUTIONED
THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE
SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the
exercise of the Option, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.
          4.7 Fractional Shares. The Company shall not be required to issue
fractional Shares upon the exercise of the Option.
     5. Nontransferability of the Option.
          During the lifetime of the Participant, the Option shall be
exercisable only by the Participant or the Participant’s guardian or legal
representative. The Option shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. Following
the death of the Participant, the Option, to the extent provided in Section 7,
may be exercised by the Participant’s legal representative or by any person
empowered to do so under the deceased Participant’s will or under the then
applicable laws of descent and distribution.
     6. Termination of the Option.
          The Option shall terminate and may no longer be exercised after the
first to occur of (a) the close of business on the Option Expiration Date,
(b) the close of business on the last date for exercising the Option following
termination of the Participant’s Service as described in Section 7, or (c) a
Change in Control to the extent provided in Section 8.
     7. Effect of Termination of Service.
          7.1 Option Exercisability. The Option shall terminate immediately upon
the Participant’s termination of Service to the extent that it is then unvested
and shall be exercisable after the Participant’s termination of Service to the
extent it is then vested only during the applicable time period as determined
below and thereafter shall terminate.
               (a) Disability. If the Participant’s Service terminates because
of the permanent and total disability of the Participant within the meaning of
Section 22(e)(3) of the Code (“Disability”), the Option, to the extent
unexercised and exercisable for Vested Shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant (or the
Participant’s guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option Expiration Date.

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               (b) Death. If the Participant’s Service terminates because of the
death of the Participant, the Option, to the extent unexercised and exercisable
for Vested Shares on the date on which the Participant’s Service terminated, may
be exercised by the Participant’s legal representative or other person who
acquired the right to exercise the Option by reason of the Participant’s death
at any time prior to the expiration of twelve (12) months after the date on
which the Participant’s Service terminated, but in any event no later than the
Option Expiration Date. The Participant’s Service shall be deemed to have
terminated on account of death if the Participant dies within three (3) months
after the Participant’s termination of Service.
               (c) Other Termination of Service. If the Participant’s Service
terminates for any reason, except Disability or death, the Option, to the extent
unexercised and exercisable for Vested Shares by the Participant on the date on
which the Participant’s Service terminated, may be exercised by the Participant
at any time prior to the expiration of ninety (90) days after the date on which
the Participant’s Service terminated, but in any event no later than the Option
Expiration Date.
          7.2 Extension if Exercise Prevented by Law. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Participant
is notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.
          7.3 Extension if Participant Subject to Section 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in
Section 7.1 of Shares acquired upon the exercise of the Option would subject the
Participant to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such Shares by the Participant would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Participant’s termination of Service, or (iii) the Option Expiration
Date.
     8. Change in Control.
          8.1 Effect of Change in Control. In the event of a Change in Control,
the surviving, continuing, successor, or purchasing entity or parent thereof, as
the case may be (the “Acquiror”), may, without the consent of the Participant,
either assume or otherwise continue in full force and effect the Company’s
rights and obligations under the Option or substitute for the Option a
substantially equivalent option for the Acquiror’s stock. In the event the
Acquiror elects not to so assume or continue the Company’s rights and
obligations under the Option or substitute for the Option in connection with the
Change in Control, any unexercised portion of the Option shall become
immediately exercisable and vested in full as of the time of consummation of the
Change in Control, provided that the Participant’s Service has not terminated
prior to such date. Any exercise of the Option that was permissible solely by
reason of this Section shall be conditioned upon the consummation of the Change
in Control. The Option shall terminate and cease to be outstanding effective as
of the time of consummation of the Change in Control to the extent that the
Option is neither assumed by the Acquiror in connection with the Change in
Control nor exercised as of the date of the Change in Control.

5

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          8.2 Federal Excise Tax Under Section 4999 of the Code.
               (a) Excess Parachute Payment. In the event that any acceleration
of vesting pursuant to this Agreement and any other payment or benefit received
or to be received by the Participant would subject the Participant to any excise
tax pursuant to Section 4999 of the Code due to the characterization of such
acceleration of vesting, payment or benefit as an excess parachute payment under
Section 280G of the Code, the Participant may elect, in his or her sole
discretion, to reduce the amount of any acceleration of vesting called for under
this Agreement in order to avoid such characterization.
               (b) Determination by Independent Accountants. To aid the
Participant in making any election called for under Section 8.1(a), upon the
occurrence of any event that might reasonably be anticipated to give rise to the
acceleration of vesting under Section 8.1 (an “Event”), the Company shall
promptly request a determination in writing by independent public accountants
selected by the Company (the “Accountants”). Unless the Company and the
Participant otherwise agree in writing, the Accountants shall determine and
report to the Company and the Participant within twenty (20) days of the date of
the Event the amount of such acceleration of vesting, payments and benefits
which would produce the greatest after-tax benefit to the Participant. For the
purposes of such determination, the Accountants may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code. The Company and the Participant shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make their required determination. The Company shall bear all fees and expenses
the Accountants may reasonably charge in connection with their services
contemplated by this Section.
     9. Adjustments in Authorized Shares.
          In the event of any corporate event or transaction (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company, combination
of Shares, exchange of Shares, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, or any similar corporate event or transaction, the Committee, in
its sole discretion, in order to prevent dilution or enlargement of
Participants’ rights under this Option, shall make appropriate adjustments in
the number, Option Price and kind of Shares subject to the Option. Any
fractional share resulting from an adjustment pursuant to this Section 9 shall
be rounded down to the nearest whole number, and in no event may the purchase
price of the Option be decreased to an amount less than the par value, if any,
of the stock subject to the Option. Such adjustments shall be determined by the
Committee, and its determination shall be final, binding and conclusive.

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     10. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any Shares covered by the Option until the date of the issuance of the Shares
for which the Option has been exercised (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date the Shares are issued,
except as provided in Section 9. If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between the Company and the Participant,
the Participant’s employment is “at will” and is for no specified term. Nothing
in this Option Agreement shall confer upon the Participant any right to continue
in the Service of the Company and/or its Affiliates or interfere in any way with
any right of the Company and/or its Affiliates to terminate the Participant’s
Service as a Director, an Employee or Consultant, as the case may be, at any
time.
     11. Legends.
          The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Option Agreement.
The Participant shall, at the request of the Company, promptly present to the
Company any and all certificates representing Shares acquired pursuant to the
Option in the possession of the Participant in order to carry out the provisions
of this Section 11.
     12. Miscellaneous Provisions.
          12.1 Termination or Amendment. The Committee may terminate or amend
the Plan or the Option at any time; provided, however, that except as provided
in Section 8 in connection with a Change in Control, no such termination or
amendment may adversely affect the Option or any unexercised portion hereof
without the consent of the Participant unless such termination or amendment is
necessary to comply with any applicable law or government regulation. No
amendment or addition to this Option Agreement shall be effective unless in
writing.
          12.2 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
          12.3 Binding Effect. Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
          12.4 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) upon personal delivery, electronic

7

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delivery at the e-mail address, if any, provided for the Participant by the
Company and/or its Affiliates, or upon deposit in the U.S. Post Office or
foreign postal service, by registered or certified mail, or with a nationally
recognized overnight courier service, with postage and fees prepaid, addressed
to the other party at the address of such party set forth in the Notice or at
such other address as such party may designate in writing from time to time to
the other party.
               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Notice, this Option
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. In addition, the Participant may deliver electronically the
Exercise Notice called for by Section 4.2 to the Company or to such third party
involved in administering the Plan as the Company may designate from time to
time. Such means of electronic delivery may include but do not necessarily
include the delivery of a link to a Company intranet or the internet site of a
third party involved in administering the Plan, the delivery of the document via
e-mail or such other means of electronic delivery specified by the Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 12.4(a) of this Option Agreement and
consents to the electronic delivery of the Plan documents and the delivery of
the Exercise Notice, as described in Section 12.4(a). The Participant
acknowledges that he or she may receive from the Company a paper copy of any
documents delivered electronically at no cost to the Participant by contacting
the Chief Financial Officer of the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. Similarly, the Participant understands that the Participant
must provide the Company or any designated third party administrator with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 12.4(a) or may change the electronic
mail address to which such documents are to be delivered (if Participant has
provided an electronic mail address) at any time by notifying the Company of
such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant understands that he or she is not
required to consent to electronic delivery of documents described in
Section 12.4(a).
          12.5 Integrated Agreement. The Notice, this Option Agreement and the
Plan, together with the Superseding Agreement, if any, shall constitute the
entire understanding and agreement of the Participant and the Company and/or its
Affiliates with respect to the subject matter contained herein and supersede any
prior agreements, understandings, restrictions, representations, or warranties
among the Participant and the Company and/or its Affiliates with respect to such
subject matter. To the extent contemplated herein, the provisions of the Notice,
the Option Agreement and the Plan shall survive any exercise of the Option and
shall remain in full force and effect.
          12.6 Applicable Law. This Option Agreement shall be governed by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.
          12.7 Counterparts. The Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

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Participant:                                                             
Date:                                                             
NONQUALIFIED STOCK OPTION EXERCISE NOTICE
Maxtor Corporation
Attention: Chief Financial Officer
500 McCarthy Boulevard
Milpitas, CA 95035
Ladies and Gentlemen:
     1. Option. I was granted a nonqualified stock option (the “Option”) to
purchase shares of the common stock (the “Shares”) of Maxtor Corporation (the
“Company”) pursuant to the Company’s 2005 Performance Incentive Plan (the
“Plan”), my Notice of Grant of Stock Option (the “Notice”) and my Stock Option
Agreement (the “Option Agreement”) as follows:

     
Date of Grant:
                                          
 
   
Number of Option Shares:
                                          
 
   
Option Price per Share:
  $                                        

     2. Exercise of Option. I hereby elect to exercise the Option to purchase
the following number of Shares, all of which are Vested Shares in accordance
with the Notice and the Option Agreement:

     
Total Shares Purchased:
                                          
 
   
Total Option Price (Total Shares X Price per Share)
  $                                        

     3. Payments. I enclose payment in full of the total option price for the
Shares in the following form(s), as authorized by my Option Agreement:

     
TM Cash:
  $                    
 
   
                    
   
 
   
TM Check:
  $                                        
 
   
TM Tender of Company Shares:
  Contact Plan Administrator
 
   
TM 1Cashless Exercise (same-day sale):
  Contact Plan Administrator

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     4. Tax Withholding. I authorize payroll withholding and otherwise will make
adequate provision for the federal, state, local and foreign tax withholding
obligations of the Company, if any, in connection with the Option. I enclose
payment in full of my withholding taxes, if any, as follows:
(Contact Plan Administrator for amount of tax due.)

     
TM Cash:
  $                    
 
   
                    
   
 
   
TM Check:
  $                                        

     5. Participant Information.

     
My address is:
   
 
   
 
   
 
   

     
My Social Security Number is:
   
 
   

     6. Binding Effect. I agree that the Shares are being acquired in accordance
with and subject to the terms, provisions and conditions of the Notice, the
Option Agreement and the Plan, to all of which I hereby expressly assent. This
Agreement shall inure to the benefit of and be binding upon my heirs, executors,
administrators, successors and assigns.

     
 
  Very truly yours,
 
   
 
   
 
   
 
  (Signature)

Receipt of the above is hereby acknowledged.
MAXTOR CORPORATION
By: ________________________________________
Title: _______________________________________
Dated: ______________________________________

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MAXTOR CORPORATION
STOCK OPTION AGREEMENT
(For Non-U.S. Participants)
     Maxtor Corporation has granted to the individual (the “Participant”) named
in the Notice of Grant of Stock Option (the “Notice”) to which this Stock Option
Agreement (the “Option Agreement”) is attached an option (the “Option”) to
purchase certain Shares upon the terms and conditions set forth in the Notice
and this Option Agreement. The Option has been granted pursuant to and shall in
all respects be subject to the terms and conditions of the Maxtor Corporation
2005 Performance Incentive Plan (the “Plan”), as amended to the Date of Grant,
the provisions of which are incorporated herein by reference. By signing the
Notice, the Participant: (a) acknowledges receipt of and represents that the
Participant has read and is familiar with the Notice, this Option Agreement, the
Plan and a prospectus for the Plan in the form most recently registered with the
Securities and Exchange Commission (the “Plan Prospectus”), (b) accepts the
Option subject to all of the terms and conditions of the Notice, this Option
Agreement and the Plan and (c) agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising
under the Notice, the Plan or this Option Agreement.
     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise.
     2. Certain Conditions of the Option.
          2.1 Compliance with Local Law. The Participant agrees that the
Participant will not acquire Shares pursuant to the Option or transfer, assign,
sell or otherwise deal with such Shares except in compliance with Local Law.
          2.2 Employment Conditions. In accepting the Option, the Participant
acknowledges that:
               (a) Any notice period mandated under Local Law shall not be
treated as Service for the purpose of determining the vesting of the Option; and
the Participant’s right to exercise the Option after termination of Service, if
any, will be measured by the date of termination of the Participant’s active
Service and will not be extended by any notice period mandated under Local Law.
Subject to the foregoing and the provisions of the Plan, the Company, in its
sole discretion, shall determine whether the Participant’s Service has
terminated and the effective date of such termination.

 

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               (b) The Plan is established voluntarily by the Company. It is
discretionary in nature and it may be modified, amended, suspended or terminated
by the Company at any time, unless otherwise provided in the Plan and this
Option Agreement.
               (c) The grant of the Option is voluntary and occasional and does
not create any contractual or other right to receive future grants of Options,
or benefits in lieu of Options, even if Options have been granted repeatedly in
the past.
               (d) All decisions with respect to future Option grants, if any,
will be at the sole discretion of the Company.
               (e) The Participant’s participation in the Plan shall not create
a right to further Service with the Company or any Affiliate and shall not
interfere with the ability of the Company or any Affiliate to terminate the
Participant’s Service at any time, with or without cause.
               (f) The Participant is voluntarily participating in the Plan.
               (g) The Option is an extraordinary item that does not constitute
compensation of any kind for Service of any kind rendered to the Company or any
Affiliate, and which is outside the scope of the Participant’s employment
contract, if any.
               (h) The Option is not part of normal or expected compensation or
salary for any purpose, including, but not limited to, calculating any
severance, resignation, termination, redundancy, end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments.
               (i) In the event that the Participant is not an employee of the
Company, the Option grant will not be interpreted to form an employment contract
or relationship with the Company; and furthermore the Option grant will not be
interpreted to form an employment contract with any Affiliate.
               (j) The future value of the underlying Shares is unknown and
cannot be predicted with certainty. If the underlying Shares do not increase in
value, the Option will have no value. If the Participant exercises the Option
and obtains Shares, the value of those Shares acquired upon exercise may
increase or decrease in value, even below the Option Price.
               (k) No claim or entitlement to compensation or damages arises
from termination of the Option or diminution in value of the Option or Shares
purchased through exercise of the Option resulting from termination of the
Participant’s Service (for any reason whether or not in breach of Local Law) and
the Participant irrevocably releases the Company and each Affiliate from any
such claim that may arise. If, notwithstanding the foregoing, any such claim is
found by a court of competent jurisdiction to have arisen then, by signing this
Option Agreement, the Participant shall be deemed irrevocably to have waived the
Participant’s entitlement to pursue such a claim.

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          2.3 Data Privacy Consent.
               (a) The Participant hereby explicitly and unambiguously consents
to the collection, use and transfer, in electronic or other form, of the
Participant’s personal data as described in this document by and among the
members of a group consisting of the Company and each Affiliate for the
exclusive purpose of implementing, administering and managing the Participant’s
participation in the Plan.
               (b) The Participant understands that the Company (including each
Affiliate) hold certain personal information about the Participant, including,
but not limited to, the Participant’s name, home address and telephone number,
date of birth, social insurance number or other identification number, salary,
nationality, job title, any Shares or directorships held in the Company, details
of all Options or any other entitlement to Shares awarded, canceled, exercised,
vested, unvested or outstanding in the Participant’s favor, for the purpose of
implementing, administering and managing the Plan (“Data”). The Participant
understands that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients
may be located in the Participant’s country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
the Participant’s country. The Participant understands that he or she may
request a list with the names and addresses of any potential recipients of the
Data by contacting the Participant’s local human resources representative. The
Participant authorizes the recipients to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Participant’s participation in the
Plan, including any requisite transfer of such Data as may be required to a
broker or other third party with whom the Participant may elect to deposit any
shares acquired upon exercise of the Option. The Participant understands that
Data will be held only as long as is necessary to implement, administer and
manage the Participant’s participation in the Plan. The Participant understands
that he or she may, at any time, view Data, request additional information about
the storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing the Participant’s local human resources representative. The
Participant understands, however, that refusing or withdrawing the Participant’s
consent may affect the Participant’s ability to participate in the Plan. For
more information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant understands that he or she may contact
the Participant’s local human resources representative.
     3. Administration.
          All questions of interpretation concerning this Option Agreement shall
be determined by the Committee. All determinations by the Committee shall be
final and binding upon all persons having an interest in the Option. Any officer
of the Company shall have the authority to act on behalf of the Company with
respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

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     4. Exercise of the Option.
          4.1 Right to Exercise. Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Vesting Date and prior to the
termination of the Option (as provided in Section 6) in an amount not to exceed
the number of Vested Shares less the number of Shares previously acquired upon
exercise of the Option. In no event shall the Option be exercisable for more
Shares than the Number of Option Shares, as adjusted pursuant to Section 9.
          4.2 Method of Exercise. Exercise of the Option shall be by means of
electronic or written notice (the “Exercise Notice”) in a form authorized by the
Company. An electronic Exercise Notice must be digitally signed or authenticated
by the Participant in such manner as required by the notice and transmitted to
the Chief Financial Officer of the Company or other authorized representative of
the Company (including a third-party administrator designated by the Company).
In the event that the Participant is not authorized or is unable to provide an
electronic Exercise Notice, the Option shall be exercised by a written Exercise
Notice addressed to the Company, which shall be signed by the Participant and
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Chief Financial Officer of the Company, or other authorized
representative of the Company (including a third-party administrator designated
by the Company). Each Exercise Notice, whether electronic or written, must state
the Participant’s election to exercise the Option, the number of whole Shares
for which the Option is being exercised and such other representations and
agreements as to the Participant’s investment intent with respect to such Shares
as may be required pursuant to the provisions of this Option Agreement. Further,
each Exercise Notice must be received by the Company prior to the termination of
the Option as set forth in Section 6 and must be accompanied by full payment of
the aggregate Option Price for the number of Shares being purchased. The Option
shall be deemed to be exercised upon receipt by the Company of such electronic
or written Exercise Notice and the aggregate Option Price.
          4.3 Payment of Option Price.
               (a) Forms of Consideration Authorized. Except as otherwise
provided below, payment of the aggregate Option Price for the number of Shares
for which the Option is being exercised shall be made (i) in cash or by check or
cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of whole Shares owned by the Participant having a Fair Market Value not less
than the aggregate Option Price, (iii) by means of a Cashless Exercise, as
defined in Section 4.3(b), or (iv) by any combination of the foregoing.
               (b) Limitations on Forms of Consideration.
                    (i) Tender of Shares. Notwithstanding the foregoing, the
Option may not be exercised by tender to the Company, or attestation to the
ownership, of Shares to the extent such tender or attestation would constitute a
violation of the provisions of any law,

4

--------------------------------------------------------------------------------

 

regulation or agreement restricting the redemption of the Company’s stock. If
required by the Company, the Option may not be exercised by tender to the
Company, or attestation to the ownership, of Shares unless such shares either
have been owned by the Participant for more than six (6) months or such other
period, if any, required by the Company (and not used for another option
exercise by attestation during such period) or were not acquired, directly or
indirectly, from the Company.
                    (ii) Cashless Exercise. A “Cashless Exercise” means the
delivery of a properly executed notice together with irrevocable instructions to
a broker in a form acceptable to the Company providing for the assignment to the
Company of the proceeds of a sale or loan with respect to some or all of the
Shares acquired upon the exercise of the Option pursuant to a program or
procedure approved by the Company (including, without limitation, through an
exercise complying with the provisions of Regulation T as promulgated from time
to time by the Board of Governors of the Federal Reserve System). The Company
reserves, at any and all times, the right, in the Company’s sole and absolute
discretion, to establish, decline to approve or terminate any such program or
procedure, including with respect to the Participant, notwithstanding that such
program or procedure may be available to others.
          4.4 Tax Withholding. Regardless of any action taken by the Company or
any Affiliate with respect to any or all income tax, social insurance, payroll
tax, payment on account or other tax-related withholding (the “Tax
Obligations”), the Participant acknowledges that the ultimate liability for all
Tax Obligations legally due by the Participant is and remains the Participant’s
responsibility and that the Company (a) makes no representations or undertakings
regarding the treatment of any Tax Obligations in connection with any aspect of
the Option, including the grant, vesting or exercise of the Option, the
subsequent sale of Shares acquired pursuant to such exercise, or the receipt of
any dividends and (b) does not commit to structure the terms of the grant or any
other aspect of the Option to reduce or eliminate the Participant’s liability
for Tax Obligations. At the time of exercise of the Option, the Participant
shall pay or make adequate arrangements satisfactory to the Company to satisfy
all withholding obligations of the Company and any Affiliate. In this regard, at
the time the Option is exercised, in whole or in part, or at any time thereafter
as requested by the Company or any Affiliate, the Participant hereby authorizes
withholding of all applicable Tax Obligations from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for
withholding of all applicable Tax Obligations, if any, by the Company and each
Affiliate which arise in connection with the Option. Alternatively, or in
addition, if permissible under applicable law, including Local Law, the Company
or an Affiliate may (i) sell or arrange for the sale of Shares acquired by the
Participant to satisfy the Tax Obligations, and/or (ii) withhold in Shares,
provided that only the amount of shares necessary to satisfy the minimum
withholding amount required by applicable law, including Local Law, is withheld.
Finally, the Participant shall pay to the Company or any Affiliate any amount of
the Tax Obligations that any such company may be required to withhold as a
result of the Participant’s participation in the Plan that cannot be satisfied
by the means previously described. The Company shall have no obligation to
process the exercise of the Option or to deliver Shares until the Tax
Obligations as described in this Section have been satisfied by the Participant.

5

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          4.5 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all shares
acquired by the Participant pursuant to the exercise of the Option. Except as
provided by the preceding sentence, a certificate for the Shares as to which the
Option is exercised shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
          4.6 Restrictions on Grant of the Option and Issuance of Shares. The
grant of the Option and the issuance of Shares upon exercise of the Option shall
be subject to compliance with all applicable requirements of United States
federal or state law or Local Law with respect to such securities. The Option
may not be exercised if the issuance of Shares upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws, including
Local Law, or other law or regulations or the requirements of any stock exchange
or market system upon which the Shares may then be listed. In addition, the
Option may not be exercised unless (i) a registration statement under the
Securities Act of 1933, as amended, (the “Securities Act”) shall at the time of
exercise of the Option be in effect with respect to the shares issuable upon
exercise of the Option or (ii) in the opinion of legal counsel to the Company,
the shares issuable upon exercise of the Option may be issued in accordance with
the terms of an applicable exemption from the registration requirements of the
Securities Act. THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE
EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE
PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE
OPTION IS VESTED. The inability of the Company to obtain from any regulatory
body having jurisdiction the authority, if any, deemed by the Company’s legal
counsel to be necessary to the lawful issuance and sale of any shares subject to
the Option shall relieve the Company of any liability in respect of the failure
to issue or sell such shares as to which such requisite authority shall not have
been obtained. As a condition to the exercise of the Option, the Company may
require the Participant to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.
          4.7 Fractional Shares. The Company shall not be required to issue
fractional Shares upon the exercise of the Option.
     5. Nontransferability of the Option.
          During the lifetime of the Participant, the Option shall be
exercisable only by the Participant or the Participant’s guardian or legal
representative. The Option shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. Following
the death of the Participant, the Option, to the extent provided in Section 7,
may be exercised by the Participant’s legal representative or by any person
empowered to do so under the deceased Participant’s will or under the then
applicable laws of descent and distribution.

6

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     6. Termination of the Option.
          The Option shall terminate and may no longer be exercised after the
first to occur of (a) the close of business on the Option Expiration Date,
(b) the close of business on the last date for exercising the Option following
termination of the Participant’s Service as described in Section 7, or (c) a
Change in Control to the extent provided in Section 8.
     7. Effect of Termination of Service.
          7.1 Option Exercisability. The Option shall terminate immediately upon
the Participant’s termination of Service to the extent that it is then unvested
and shall be exercisable after the Participant’s termination of Service to the
extent it is then vested only during the applicable time period as determined
below and thereafter shall terminate.
               (a) Disability. If the Participant’s Service terminates because
of the permanent and total disability of the Participant within the meaning of
Section 22(e)(3) of the Code (“Disability”), the Option, to the extent
unexercised and exercisable for Vested Shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant (or the
Participant’s guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option Expiration Date.
               (b) Death. If the Participant’s Service terminates because of the
death of the Participant, the Option, to the extent unexercised and exercisable
for Vested Shares on the date on which the Participant’s Service terminated, may
be exercised by the Participant’s legal representative or other person who
acquired the right to exercise the Option by reason of the Participant’s death
at any time prior to the expiration of twelve (12) months after the date on
which the Participant’s Service terminated, but in any event no later than the
Option Expiration Date. The Participant’s Service shall be deemed to have
terminated on account of death if the Participant dies within three (3) months
after the Participant’s termination of Service.
               (c) Other Termination of Service. If the Participant’s Service
terminates for any reason, except Disability or death, the Option, to the extent
unexercised and exercisable for Vested Shares by the Participant on the date on
which the Participant’s Service terminated, may be exercised by the Participant
at any time prior to the expiration of ninety (90) days after the date on which
the Participant’s Service terminated, but in any event no later than the Option
Expiration Date.
          7.2 Extension if Exercise Prevented by Law. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Participant
is notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.
          7.3 Extension if Participant Subject to Section 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in
Section 7.1 of Shares acquired

7

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upon the exercise of the Option would subject the Participant to suit under
Section 16(b) of the Exchange Act, the Option shall remain exercisable until the
earliest to occur of (i) the tenth (10th) day following the date on which a sale
of such Shares by the Participant would no longer be subject to such suit,
(ii) the one hundred and ninetieth (190th) day after the Participant’s
termination of Service, or (iii) the Option Expiration Date.
     8. Change in Control.
          8.1 Effect of Change in Control. In the event of a Change in Control,
the surviving, continuing, successor, or purchasing entity or parent thereof, as
the case may be (the “Acquiror”), may, without the consent of the Participant,
either assume or otherwise continue in full force and effect the Company’s
rights and obligations under the Option or substitute for the Option a
substantially equivalent option for the Acquiror’s stock. In the event the
Acquiror elects not to so assume or continue the Company’s rights and
obligations under the Option or substitute for the Option in connection with the
Change in Control, any unexercised portion of the Option shall become
immediately exercisable and vested in full as of the time of consummation of the
Change in Control, provided that the Participant’s Service has not terminated
prior to such date. Any exercise of the Option that was permissible solely by
reason of this Section shall be conditioned upon the consummation of the Change
in Control. The Option shall terminate and cease to be outstanding effective as
of the time of consummation of the Change in Control to the extent that the
Option is neither assumed by the Acquiror in connection with the Change in
Control nor exercised as of the date of the Change in Control.
          8.2 Federal Excise Tax Under Section 4999 of the Code.
               (a) Excess Parachute Payment. In the event that any acceleration
of vesting pursuant to this Agreement and any other payment or benefit received
or to be received by the Participant would subject the Participant to any excise
tax pursuant to Section 4999 of the Code due to the characterization of such
acceleration of vesting, payment or benefit as an excess parachute payment under
Section 280G of the Code, the Participant may elect, in his or her sole
discretion, to reduce the amount of any acceleration of vesting called for under
this Agreement in order to avoid such characterization.
               (b) Determination by Independent Accountants. To aid the
Participant in making any election called for under Section 8.2(a), upon the
occurrence of any event that might reasonably be anticipated to give rise to the
acceleration of vesting under Section 8.1 (an “Event”), the Company shall
promptly request a determination in writing by independent public accountants
selected by the Company (the “Accountants”). Unless the Company and the
Participant otherwise agree in writing, the Accountants shall determine and
report to the Company and the Participant within twenty (20) days of the date of
the Event the amount of such acceleration of vesting, payments and benefits
which would produce the greatest after-tax benefit to the Participant. For the
purposes of such determination, the Accountants may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code. The Company and the Participant shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make their required determination. The Company shall bear all fees and expenses
the Accountants may reasonably charge in connection with their services
contemplated by this Section.

8

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     9. Adjustments in Authorized Shares.
          In the event of any corporate event or transaction (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company, combination
of Shares, exchange of Shares, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, or any similar corporate event or transaction, the Committee, in
its sole discretion, in order to prevent dilution or enlargement of
Participants’ rights under this Option, shall make appropriate adjustments in
the number, Option Price and kind of Shares subject to the Option. Any
fractional share resulting from an adjustment pursuant to this Section 9 shall
be rounded down to the nearest whole number, and in no event may the purchase
price of the Option be decreased to an amount less than the par value, if any,
of the stock subject to the Option. Such adjustments shall be determined by the
Committee, and its determination shall be final, binding and conclusive.
     10. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any Shares covered by the Option until the date of the issuance of the Shares
for which the Option has been exercised (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date the Shares are issued,
except as provided in Section 9. If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between the Company and the Participant,
the Participant’s employment is “at will” and is for no specified term. Nothing
in this Option Agreement shall confer upon the Participant any right to continue
in the Service of the Company and/or its Affiliates or interfere in any way with
any right of the Company and/or its Affiliates to terminate the Participant’s
Service as a Director, an Employee or Consultant, as the case may be, at any
time.
     11. Legends.
          The Company may at any time place legends referencing any applicable
federal, state or foreign securities law, including Local Law, restrictions on
all certificates representing shares of stock subject to the provisions of this
Option Agreement. The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing Shares acquired
pursuant to the Option in the possession of the Participant in order to carry
out the provisions of this Section 11.

9

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     12. Miscellaneous Provisions.
          12.1 Termination or Amendment. The Committee may terminate or amend
the Plan or the Option at any time; provided, however, that except as provided
in Section 8 in connection with a Change in Control, no such termination or
amendment may adversely affect the Option or any unexercised portion hereof
without the consent of the Participant unless such termination or amendment is
necessary to comply with any applicable law or government regulation. No
amendment or addition to this Option Agreement shall be effective unless in
writing.
          12.2 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
          12.3 Binding Effect. Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
          12.4 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) upon personal delivery, electronic delivery at the e-mail
address, if any, provided for the Participant by the Company and/or its
Affiliates, or upon deposit in the U.S. Post Office or foreign postal service,
by registered or certified mail, or with a nationally recognized overnight
courier service, with postage and fees prepaid, addressed to the other party at
the address of such party set forth in the Notice or at such other address as
such party may designate in writing from time to time to the other party.
               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Notice, this Option
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. In addition, the Participant may deliver electronically the
Exercise Notice called for by Section 4.2 to the Company or to such third party
involved in administering the Plan as the Company may designate from time to
time. Such means of electronic delivery may include but do not necessarily
include the delivery of a link to a Company intranet or the internet site of a
third party involved in administering the Plan, the delivery of the document via
e-mail or such other means of electronic delivery specified by the Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 12.4(a) of this Option Agreement and
consents to the electronic delivery of the Plan documents and the delivery of
the Exercise Notice, as described in Section 12.4(a). The Participant
acknowledges that he or she may receive from the Company a paper copy of any
documents delivered electronically at no cost to the Participant by contacting
the Chief Financial Officer of the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a
paper copy of any documents if the

10

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attempted electronic delivery of such documents fails. Similarly, the
Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the
attempted electronic delivery of such documents fails. The Participant may
revoke his or her consent to the electronic delivery of documents described in
Section 12.4(a) or may change the electronic mail address to which such
documents are to be delivered (if Participant has provided an electronic mail
address) at any time by notifying the Company of such revoked consent or revised
e-mail address by telephone, postal service or electronic mail. Finally, the
Participant understands that he or she is not required to consent to electronic
delivery of documents described in Section 12.4(a).
          12.5 Integrated Agreement. The Notice, this Option Agreement and the
Plan, together with the Superseding Agreement, if any, shall constitute the
entire understanding and agreement of the Participant and the Company and/or its
Affiliates with respect to the subject matter contained herein and supersede any
prior agreements, understandings, restrictions, representations, or warranties
among the Participant and the Company and/or its Affiliates with respect to such
subject matter. To the extent contemplated herein, the provisions of the Notice,
the Option Agreement and the Plan shall survive any exercise of the Option and
shall remain in full force and effect.
          12.6 Applicable Law. This Option Agreement shall be governed by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties as evidenced by this Option
Agreement, the parties hereby submit to and consent to the jurisdiction of the
State of California and agree that such litigation shall be conducted only in
the courts of the County of Santa Clara, California, or the federal courts of
the United States for the Northern District of California, and no other courts,
where this Option Agreement is made and/or performed.
          12.7 Counterparts. The Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

11

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Participant:                                         
Date:                                         
NONQUALIFIED STOCK OPTION EXERCISE NOTICE
Maxtor Corporation
Attention: Chief Financial Officer
500 McCarthy Boulevard
Milpitas, CA 95035
Ladies and Gentlemen:
     1. Option. I was granted a nonqualified stock option (the “Option”) to
purchase shares of the common stock (the “Shares”) of Maxtor Corporation (the
“Company”) pursuant to the Company’s 2005 Performance Incentive Plan (the
“Plan”), my Notice of Grant of Stock Option (the “Notice”) and my Stock Option
Agreement (the “Option Agreement”) as follows:

                 
 
  Date of Grant:                      
 
               
 
  Number of Option Shares:                      
 
               
 
  Option Price per Share:   $        
 
           

     2. Exercise of Option. I hereby elect to exercise the Option to purchase
the following number of Shares, all of which are Vested Shares in accordance
with the Notice and the Option Agreement:

                 
 
  Total Shares Purchased:                      
 
               
 
  Option Price per Share:   $        
 
           

     3. Payments. I enclose payment in full of the total option price for the
Shares in the following form(s), as authorized by my Option Agreement:

         
 
  TM Cash:   $                     
 
       
 
                          
 
       
 
  TM Check:   $                                         
 
       
 
  TM Tender of Company Shares:   Contact Plan Administrator
 
       
 
  TM Cashless Exercise (same-day sale):   Contact Plan Administrator

1

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     4. Tax Withholding. I authorize payroll withholding and otherwise will make
adequate provision for the federal, state, local and foreign tax withholding
obligations of the Company, if any, in connection with the Option. I enclose
payment in full of my withholding taxes, if any, as follows:
(Contact Plan Administrator for amount of tax due.)

         
 
  TM Cash:   $                     
 
       
 
                          
 
       
 
  TM Check:   $                                         

     5. Participant Information.

               
 
  My address is:                      
 
                         
 
                  My Social Security Number is:    
 
             

     6. Binding Effect. I agree that the Shares are being acquired in accordance
with and subject to the terms, provisions and conditions of the Notice, the
Option Agreement and the Plan, to all of which I hereby expressly assent. This
Agreement shall inure to the benefit of and be binding upon my heirs, executors,
administrators, successors and assigns.

             
 
          Very truly yours,  
 
           
 
          (Signature)
 
            Receipt of the above is hereby acknowledged.        
 
            MAXTOR CORPORATION        
 
           
By:
           
 
           
 
           
Title:
           
 
           
 
           
Dated:
           
 
           

2

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MAXTOR CORPORATION
NOTICE OF GRANT OF STOCK OPTION
(For Non-U.S. Participants)
The Participant has been granted an option (the “Option”) to purchase certain
Shares of Maxtor Corporation pursuant to the Maxtor Corporation 2005 Performance
Incentive Plan (the “Plan”), as follows:

         
Participant:
       
 
       
Date of Grant:
       
 
       
Number of Option Shares:
       
 
       
Option Price:
  $    
 
        Initial Vesting Date:   The date one (1) year after [vesting
commencement date]
 
        Option Expiration Date:   The date ten (10) years after the Date of
Grant
 
        Tax Status of Option:   [Reserved]
 
        Local Law:   The laws, rules and regulations of [Name of Country], of
which the Participant is a resident.
 
        Vested Shares:   Except as provided in the Stock Option Agreement, the
number of Vested Shares (disregarding any resulting fractional share) as of any
date is determined by multiplying the Number of Option Shares by the “Vested
Percentage” determined as of such date as follows:

              Vested Percentage
Prior to Initial Vesting Date
    0 %
 
       
On Initial Vesting Date, provided the Participant’s Service has not terminated
prior to such date
    25 %
 
       
Plus
       
 
       
For each additional full calendar quarter of the Participant’s continuous
Service from Initial Vesting Date until the Vested Percentage equals 100% an
additional
    6.25 %

     
Superseding Agreement:
  [None]
 
   
 
  The terms and conditions of the foregoing Superseding Agreement to which the
Participant is a party shall, notwithstanding any provision of the Stock Option
Agreement to the contrary, supersede any inconsistent term or condition set
forth in the Stock Option Agreement to the extent intended by such Superseding
Agreement.

MAXTOR CORPORATION
                                                            
Dr. C.S. Park
Chairman of the Board of Directors
And Chief Executive Officer

 

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MAXTOR CORPORATION
NOTICE OF GRANT OF STOCK OPTION
The Participant has been granted an option (the "Option") to purchase certain
Shares of Maxtor Corporation pursuant to the Maxtor Corporation 2005 Performance
Incentive Plan (the "Plan"), as follows:

         
Participant:
       
 
       
Date of Grant:
       
 
       
Number of Option Shares:
       
 
       
Option Price:
  $    
 
        Initial Vesting Date:   The date one (1) year after [vesting
commencement date]
 
        Option Expiration Date:   The date ten (10) years after the Date of
Grant
 
        Tax Status of Option:   [Reserved]
 
        Vested Shares:   Except as provided in the Stock Option Agreement, the
number of Vested Shares (disregarding any resulting fractional share) as of any
date is determined by multiplying the Number of Option Shares by the "Vested
Percentage” determined as of such date as follows:

              Vested Percentage
Prior to Initial Vesting Date.
    0 %
 
       
On Initial Vesting Date, provided the Participant’s Service has not terminated
prior to such date
    25 %
 
       
Plus
       
 
       
For each additional full calendar quarter of the Participant’s continuous
Service from Initial Vesting Date until the Vested Percentage equals 100% an
additional
    6.25 %

     
Superseding Agreement:
  [None]
 
   
 
  The terms and conditions of the foregoing Superseding Agreement to which the
Participant is a party shall, notwithstanding any provision of the Stock Option
Agreement to the contrary, supersede any inconsistent term or condition set
forth in the Stock Option Agreement to the extent intended by such Superseding
Agreement.

MAXTOR CORPORATION
By:                                                            
Dr. C.S. Park
Chairman of the Board of Directors
And Chief Executive Officer

 

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MAXTOR CORPORATION
NOTICE OF GRANT OF RESTRICTED STOCK
The Participant has been granted an award (the “Award”) pursuant to the Maxtor
Corporation 2005 Performance Incentive Plan (the “Plan”) of certain Shares of
Maxtor Corporation, as follows:

         
Participant:
       
 
       
 
       
Date of Grant:
       
 
       
 
       
Total Number of Shares:
       
 
       
 
        Vested Shares:   Except as provided in the Restricted Stock Agreement
and provided that the Participant’s Service has not terminated prior to the
relevant date, the number of Vested Shares shall cumulatively increase on each
respective date set forth below by the number of shares set forth opposite such
date, as follows:

                                              Cumulative       Vesting Date    
No. Shares Vesting     No. Vested Shares  
 
                       

     
Superseding Agreement:
  [None] [Maxtor Corporation Executive Retention and Severance Plan]
 
   
 
  The terms and conditions of the foregoing Superseding Agreement to which the
Participant is a party shall, notwithstanding any provision of the Restricted
Stock Agreement to the contrary, supersede any inconsistent term or condition
set forth in the Restricted Stock Agreement to the extent intended by such
Superseding Agreement.

By their signatures below, the Company and the Participant agree that the Award
is governed by this Notice and by the provisions of the Plan and the Restricted
Stock Agreement, both of which are attached to and made a part of this document,
and the Superseding Agreement, if any. The Participant acknowledges receipt of
copies of the Plan, the Restricted Stock Agreement and the Plan Prospectus and
represents that the Participant has read and is familiar with their provisions.
The Participant hereby accepts the Award subject to all of the terms and
conditions of this Notice, the Restricted Stock Agreement, the Plan and the
Superseding Agreement, if any.

                  MAXTOR CORPORATION   PARTICIPANT
 
           
 
  By:                      
 
          Signature
 
           
 
  Its:                      
 
          Date
 
  Address:   500 McCarthy Boulevard    
 
           
 
      Milpitas, CA 95035   Address
 
           
 
           

     
ATTACHMENTS:
  2005 Performance Incentive Plan, as amended to the Date of Grant; Restricted
Stock Agreement; Assignment Separate from Certificate and Plan Prospectus

 

--------------------------------------------------------------------------------

 

MAXTOR CORPORATION
NOTICE OF GRANT OF RESTRICTED STOCK UNITS
(For Non-U.S.Participants)
The Participant has been granted an award of Restricted Stock Units (the
“Award”) pursuant to the Maxtor Corporation 2005 Performance Incentive Plan (the
“Plan”), each of which represents the right to receive on the applicable
Settlement Date one (1) Share of Maxtor Corporation, as follows:

     
Participant:
                                          
 
   
Date of Grant:
                                          
 
   
Number of Restricted Stock Units:
                                          , subject to adjustment as provided by
the Restricted Stock Units Agreement.
 
   
Settlement Date:
  For each Restricted Stock Unit, except as otherwise provided by the Restricted
Stock Units Agreement, the date on which such unit becomes a Vested Unit in
accordance with the vesting schedule set forth below.
 
   
Local Law:
  The laws, rules and regulations of [Name of Country], of which the Participant
is a resident.
 
   
Vested Units:
  Except as provided in the Restricted Stock Units Agreement and provided that
the Participant’s Service has not terminated prior to the relevant date, the
number of Vested Units shall cumulatively increase on each respective date set
forth below by the number of units set forth opposite such date, as follows:

                                              Cumulative       Vesting Date    
No. Units Vesting     No. Vested Units  
 
                       

     
Superseding Agreement:
  [None] [Maxtor Corporation Executive Retention and Severance Plan]
 
   
 
  The terms and conditions of the foregoing Superseding Agreement to which the
Participant is a party shall, notwithstanding any provision of the Restricted
Stock Units Agreement to the contrary, supersede any inconsistent term or
condition set forth in the Restricted Stock Units Agreement to the extent
intended by such Superseding Agreement.

By their signatures below, the Company and the Participant agree that the Award
is governed by this Notice and by the provisions of the Plan and the Restricted
Stock Units Agreement, both or which are attached to and made a part of this
document, and the Superseding Agreement, if any. The Participant acknowledges
receipt of copies of the Plan, the Restricted Stock Units Agreement and the Plan
Prospectus and represents that the Participant has read and is familiar with
their provisions. The Participant hereby accepts the Award subject to all of the
terms and conditions of this Notice, the Restricted Stock Units Agreement, the
Plan and the Superseding Agreement, if any.

              MAXTOR CORPORATION   PARTICIPANT
 
           
By:
                     
 
          Signature
 
           
Its:
                     
 
          Date
 
           
Address:
      500 McCarthy Boulevard    
 
           
 
      Milpitas, CA 95035   Address
 
           
 
           

     
ATTACHMENTS:
  2005 Performance Incentive Plan, as amended to the Date of Grant; Restricted
Stock Units Agreement and Plan Prospectus

 

--------------------------------------------------------------------------------

 

MAXTOR CORPORATION
NOTICE OF GRANT OF RESTRICTED STOCK UNITS
The Participant has been granted an award of Restricted Stock Units (the
“Award”) pursuant to the Maxtor Corporation 2005 Performance Incentive Plan (the
“Plan”), each of which represents the right to receive on the applicable
Settlement Date one (1) Share of Maxtor Corporation, as follows:

     
Participant:
                                          
 
   
Date of Grant:
                                          
 
   
Number of Restricted Stock Units:
                                          , subject to adjustment as provided by
the Restricted Stock Units Agreement.
 
   
Settlement Date:
  For each Restricted Stock Unit, except as otherwise provided by the Restricted
Stock Units Agreement, the date on which such unit becomes a Vested Unit in
accordance with the vesting schedule set forth below.
 
   
Vested Units:
  Except as provided in the Restricted Stock Units Agreement and provided that
the Participant’s Service has not terminated prior to the relevant date, the
number of Vested Units shall cumulatively increase on each respective date set
forth below by the number of units set forth opposite such date, as follows:

                                              Cumulative       Vesting Date    
No. Units Vesting     No. Vested Units  
 
                       

     
Superseding Agreement:
  [None] [Maxtor Corporation Executive Retention and Severance Plan]

The terms and conditions of the foregoing Superseding Agreement to which the
Participant is a party shall, notwithstanding any provision of the Restricted
Stock Units Agreement to the contrary, supersede any inconsistent term or
condition set forth in the Restricted Stock Units Agreement to the extent
intended by such Superseding Agreement.

By their signatures below, the Company and the Participant agree that the Award
is governed by this Notice and by the provisions of the Plan and the Restricted
Stock Units Agreement, both or which are attached to and made a part of this
document, and the Superseding Agreement, if any. The Participant acknowledges
receipt of copies of the Plan, the Restricted Stock Units Agreement and the Plan
Prospectus and represents that the Participant has read and is familiar with
their provisions. The Participant hereby accepts the Award subject to all of the
terms and conditions of this Notice, the Restricted Stock Units Agreement, the
Plan and the Superseding Agreement, if any.

              MAXTOR CORPORATION   PARTICIPANT
 
           
By:
                     
 
          Signature
 
           
Its:
                     
 
          Date
 
           
Address:
      500 McCarthy Boulevard    
 
           
 
      Milpitas, CA 95035   Address
 
           
 
           

     
ATTACHMENTS:
  2005 Performance Incentive Plan, as amended to the Date of Grant; Restricted
Stock Units Agreement and Plan Prospectus