EXHIBIT 10.59
RETENTION BONUS PROGRAM
MAXTOR CORPORATION
Purpose:
Maxtor and Seagate have entered into an acquisition agreement under which, if
closed, would result in the acquisition of Maxtor by Seagate (the
“Acquisition”). In order to retain employees whose dedication, notwithstanding
the uncertainty accompanying the pending Acquisition, is important to Maxtor’s
business, the Compensation Committee of the Board of Directors has adopted this
Retention Bonus Program (the “Program”).
Eligibility and Notification:
Employees eligible to participate in the Program are those employees designated
as eligible by the Chief Executive Officer. Such determinations shall be within
the sole discretion of the Chief Executive Officer.
Employees designated as eligible to participate in the Program will be notified
of that fact in writing promptly following such designation. Employees who are
not so notified, will not be eligible to participate in the Program.
To remain eligible, participants must remain in active employment or on an
approved leave of absence through the payment dates defined below except as
provided below.
Bonus Target:
The amount of the bonus potentially payable to each participant in the Program
will be determined by the Chief Executive Officer in his sole discretion. The
written notification described in the previous section will set forth the amount
of each participant’s “target” bonus.
Bonus Payments:
Subject to his/her continued employment in good standing with the Company
through the applicable payment date, a bonus payment will be payable to each
participant in the Program as follows: (a) 20% of his/her target bonus on the
earlier of the first business day following July 1, 2006 or the date of the
closing of the Acquisition (“First Payment”), and (b) 80% of his/her target
bonus on the date that is six months after the date of the closing of the
Acquisition (“Second Payment”). Payment amounts will be adjusted pro-rata for
periods of approved leaves of absence based on the actual period of active
employment relative to the entire payment period from the start and through the
end of the period for each of the First Payment, and Second Payment, as
applicable.
Following the date of the closing of the Acquisition, any remaining unpaid
portion of a participant’s target bonus shall become immediately payable in a
lump sum upon the first to occur of (i) the participant’s involuntary
termination of employment by Maxtor (or its successor) other than for “Cause”,
(ii) a reduction in the participant’s base salary rate by 10% or more in
comparison to such participant’s base salary rate in effect immediately prior to
such reduction; or (iii) the reassignment of the participant to a workplace that

 

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increases the participant’s regular one-way commute distance between the
participant’s residence and workplace by more than 50 miles.
For purposes of this Plan, “Cause” means the occurrence of any of the following:
(1) the participant’s theft, dishonesty, misconduct, breach of fiduciary duty
for personal profit, or falsification of any documents or records of the Company
Group; (2) the participant’s material failure to abide by the code of conduct or
other policies (including, without limitation, policies relating to
confidentiality and reasonable workplace conduct) of any member of the Company
Group; (3) misconduct by the participant within the scope of Section 304 of the
Sarbanes-Oxley Act of 2002 as a result of which Maxtor is required to prepare an
accounting restatement; (4) the participant’s unauthorized use,
misappropriation, destruction or diversion of any tangible or intangible asset
or corporate opportunity of a member of the Company Group (including, without
limitation, the participant’s improper use or disclosure of confidential or
proprietary information of a member of the Company Group); (5) any intentional
act by the participant which has a material detrimental effect on reputation or
business of a member of the Company Group; (6) the participant’s repeated
failure or inability to perform any reasonable assigned duties after written
notice from a member of the Company Group, and a reasonable opportunity to cure,
such failure or inability; (7) any material breach by the participant of any
employment, non-disclosure, non-competition, non-solicitation or other similar
agreement between the participant and a member of the Company Group, which is
not cured pursuant to the terms of such agreement; or (8) the participant’s
conviction (including any plea of guilty or nolo contendere) of any criminal act
involving fraud, dishonesty, misappropriation or moral turpitude, or which
impairs the participant’s ability to perform his or her duties with a member of
the Company Group. The “Company Group” means Maxtor Corporation and each present
or future parent and subsidiary corporation or other business entity thereof.
In the event of a participant’s involuntary termination other than for Cause by
Maxtor prior to the Acquisition, such participant shall be entitled to receive
any payments otherwise payable to such participant under the Program as if such
participant had continued employment in good standing with the Company through
the applicable payment date, subject to and consistent with the other terms of
the Program.
All payments pursuant to the Program will be subject to applicable payroll
withholding.
Program Termination:
The Program shall terminate and be of no further force or effect, and no bonuses
shall become earned or payable hereunder, in the event that the Acquisition is
cancelled/terminated.
Special Treatment of Parachute Payments:
The following provisions apply to payments and benefits provided pursuant to the
Program or otherwise to Program participants who are deemed “disqualified
individuals” within the meaning of Section 280G of the Internal Revenue Code
(other than an

 

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individual who is a participant in the Company’s Executive Retention and
Severance Plan, the treatment of whom shall be determined in accordance with
such plan):
1. In the event that any payment or benefit received or to be received by a
disqualified individual pursuant to the Program or otherwise (collectively, the
“Payments”) would result in a “parachute payment,” as described in Section 280G,
then, notwithstanding the other provisions of the Program, the amount of such
Payments will be reduced to the amount that produces the greatest after-tax
benefit to the disqualified individual.
2. The “greatest after-tax benefit” to any disqualified individual shall be
determined by the Company in a fair and equitable manner within thirty days of
the occurrence of the Payments.