Exhibit 10.7


 


SEAGATE TECHNOLOGY 

2004 STOCK COMPENSATION PLAN

OPTION AGREEMENT


 


(OUTSIDE DIRECTORS)


 


THIS OPTION AGREEMENT
(including any exhibits hereto, the “Agreement”) is made effective as of the
Date of Grant (as set forth below), between Seagate Technology, a limited
company incorporated in the Cayman Islands (the “Company”), and the Participant
named below.


 


R E C I T A L S:


 


WHEREAS, the Company has
adopted the Seagate Technology 2004 Stock Compensation Plan (including any
exhibits thereto, the “Plan”), which Plan is incorporated herein by reference
and made a part of this Agreement. 
Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan; and


 


WHEREAS, the Committee has
determined that it would be in the best interests of the Company and its
shareholders to grant the Option (as defined below) provided for herein to the
Participant pursuant to the Plan and the terms set forth herein.


 


NOW
THEREFORE, in consideration of the mutual covenants hereinafter set forth, the
parties agree as follows:


 


1.                                       Grant of the Option.  The Company hereby grants to the Participant
the right and option (the “Option”) to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of that number of shares
(the “Shares”) set forth in Section 2(f) below, subject to adjustment
from time to time pursuant to the provisions of Section 13 of the
Plan.  The purchase price per share of
the Shares subject to the Option (the “Option Price”) shall be the “Exercise
Price (Per Share)” set forth in Section 2(e) below, subject to
adjustment from time to time pursuant to the provisions of Section 13 of
the Plan.  The Option is intended to be a
non-qualified stock option, and is not intended to be treated as an option that
complies with Section 422 of the Internal Revenue Code of 1986, as
amended.


 


2.                                       Option Terms.  Subject to further detail included in the
Agreement, below are the key terms related to the Option:


 


(a)          Participant.


 


(b)         Date of Grant.


 


(c)          Grant Number.


 


(d)         Vesting Commencement Date.


 


(e)          Exercise Price (Per Share).


 

















 


(f)            Number of Shares Subject to
Option.


 


(g)         Total Exercise Price.


 


(h)         Expiration Date.


 


(i)             Type of Grant.  Nonstatutory Stock Option.


 


(j)             Exercise Schedule.  Same as Vesting Schedule.


 


(k)          Vesting Schedule.  25% of the Option vests on the first
anniversary of the Vesting Commencement Date, and an additional 1/48th of the
Option vests at the end of each full month thereafter, until the fourth
anniversary of the Vesting Commencement Date, subject to accelerated vesting
under varying circumstances described in Section 3(a) below.  If, on any vesting date, this Vesting
Schedule would result in the vesting of a fraction of a share, such fraction
shall be rounded to the nearest whole share.


 


(l)             Payment.  By cash or check or other form of payment
permitted under Section 4(b)(i) of the Option Agreement.


 


3.                                       Vesting.  At any time, the portion of the Option which
has become vested and exercisable as described in this Section 3 is
hereinafter referred to as the “Vested Portion.”


 


(a)          Vesting Schedule.


 


(i)                                     Subject to Sections 3(a)(ii) and 3(b) below, the
Option shall vest and become exercisable in accordance with the Vesting
Schedule set forth in Section 2 above.


 


(ii)                                  Notwithstanding the foregoing, in the event of a Change of
Control (as defined below), then the Option shall, for at least 10 days prior
to the consummation of the Change of Control or such other period of time
determined by the Board, vest and become exercisable for all the Shares at the
time subject to the Option.


 


(iii)                               In addition to the foregoing, in the event of the
Participant’s termination of Continuous Service with the Company on account of
the Participant’s death, the Participant shall be deemed to have completed an
additional year of service for purposes of determining the portion of the
Option which is the Vested Portion.


 


For purposes of this Agreement:


 


“Change of Control” shall mean the
occurrence of any of the following events:


 


(i)                                     The sale,
exchange, lease or other disposition of all or substantially all of the assets
of the Company to a person or group of related persons, as such 


 


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terms are defined or described in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act, that will continue
the business of the Company in the future;


 


(ii)                                  A merger or
consolidation involving the Company in which the voting securities of the
Company owned by the shareholders of the Company immediately prior to such
merger or consolidation do not represent, after conversion if applicable, more
than fifty percent (50%) of the total voting power of the surviving controlling
entity outstanding immediately after such merger or consolidation; provided
that any person who (1) was a beneficial owner (within the meaning of Rules 13d-3
and 13d-5 promulgated under the Exchange Act) of the voting securities of the
Company immediately prior to such merger or consolidation, and (2) is a
beneficial owner of more than 20% of the securities of the Company immediately
after such merger or consolidation, shall be excluded from the list of “shareholders
of the Company immediately prior to such merger or consolidation” for purposes
of the preceding calculation;


 


(iii)                               Any person or
group is or becomes the Beneficial Owner, directly or indirectly, of more than
50% of the total voting power of the voting stock of the Company (including by
way of merger, consolidation or otherwise);


 


(iv)                              During any
period of two (2) consecutive years, individuals who at the beginning of
such period constituted the Board (together with any new Directors whose
election by such Board or whose nomination for election by the shareholders of
the Company was approved by a vote of a majority of the Directors of the
Company then still in office, who were either Directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board then in
office; or


 


(v)                                 A dissolution
or liquidation of the Company.


 


(b)         Termination of Continuous
Service


 


If the Participant’s Continuous Service with the
Company is terminated for any reason, the Option shall, to the extent not then
vested, be canceled by the Company without consideration.  The Vested Portion of the Option shall remain
exercisable for the period set forth in Section 4(a).


 


4.                                       Exercise of Option.


 


(a)          Period of Exercise


 


Subject to the provisions of the Plan and this Agreement, the Participant
may exercise all or any part of the Vested Portion of the Option at any time
prior to the earliest to occur of:


 


(i)                                     the “Expiration Date” set forth in Section 2(i) above;


 


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(ii)                                  one year following the date of the Participant’s termination
of Continuous Service as a result of death or Disability (as defined in below);


 


(iii)                               three (3) months following the date of the Participant’s
termination of Continuous Service by the Company without Cause (as defined
below), other than as a result of death or Disability, or by the Participant
for any reason; and


 


(iv)                              the date of the Participant’s termination of Continuous
Service by the Company for Cause.


 


For purposes of this Agreement:


 


“Disability” shall mean the inability of a
Participant to perform in all material respects his duties and responsibilities
to the Company, or any Subsidiary of the Company, for a period of six
consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period by reason of a physical or mental incapacity. Any
question as to the existence of a Disability as to which Participant and the
Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Participant and the Company. If Participant
and the Company cannot agree as to a qualified independent physician, each
shall appoint such a physician and those two physicians shall select a third
who shall make such determination in writing. The determination of Disability
made in writing to the Company and Participant shall be final and conclusive
for all purposes of this Agreement.


 


“Cause” shall mean (i) the Participant’s
continued failure substantially to perform the material duties of his office
(other than as a result of total or partial incapacity due to physical or
mental illness), (ii) the embezzlement or theft by the Participant of the
Company’s property, (iii) the commission of any act or acts on the
Participant’s part resulting in the conviction of such Participant of a felony
under the laws of the United States, any state or any country, (iv) the
Participant’s willful malfeasance or willful misconduct in connection with the
Participant’s duties to the Company or any other act or omission which is
materially injurious to the financial condition or business reputation of the
Company or any of its subsidiaries or affiliates, or (v) a material breach
by the Participant of the material terms of his fiduciary duties to the
Company, of any agreement with the Company or an Affiliate with respect to the
Participant’s services, or of any non-compete, non-solicitation or
confidentiality provisions to which the Participant is subject.  However, no termination shall be deemed for
Cause under clause (i), (iv) or (v) unless the Participant is first
given written notice by the Company of the specific acts or omissions which the
Company deems constitute grounds for a termination for Cause and is provided
with at least 30 days after such notice to cure the specified deficiency.


 


(b)         Method of Exercise.


 


(i)                                     Subject to Section 4(a), the Vested Portion of the
Option may be exercised by delivering to the Company at its principal office or
its designee written notice of intent to so exercise; provided  that,
the Option may be exercised with respect to whole Shares only.  Such notice shall specify the number of
Shares for which the Option is being exercised and shall be accompanied by  payment in
full of the Option Price.  The purchase
price for the Shares as to which 


 


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the Option is exercised shall be paid
to the Company, at the election of the Participant, (i) in cash or by
check or (ii) if there should be a public market for the Shares at such
time, (A) in Shares having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee; provided, that if such
Shares were acquired, directly or indirectly, from the Company, such Shares
have been held by the Participant for no less than six months (or such other
period as established from time to time by the Committee or generally accepted
accounting principles in order to avoid variable grant date accounting for
financial accounting purposes), (B) partly in cash and partly in such
Shares or (C) subject to such rules as may be established by the
Committee, through the delivery of irrevocable instruments to a broker to sell
all or a portion of such Shares and deliver promptly to the Company an amount
equal to the aggregate Option Price for the Shares being purchased.  The Participant shall also be required to pay
all withholding taxes relating to the exercise.


 


(ii)                                  Notwithstanding any other provision of the Plan or this
Agreement to the contrary, unless there is an available exemption from such
registration, qualification or other legal requirements, the Option may not be
exercised prior to the completion of any registration or qualification of the
Option or the Shares that is required to comply with any applicable state and
federal securities law or any ruling or regulation of any governmental body or
national securities exchange or compliance with any other applicable federal,
state or foreign law that the Committee shall in its sole discretion determine
in good faith to be necessary or advisable.


 


(iii)                               Upon the Company’s determination that the Option has been
validly exercised as to any of the Shares, the Company shall issue certificates
in the Participant’s name for such Shares. 
However, the Company shall not be liable to the Participant for damages
relating to any delays in issuing the certificates to him, any loss of the
certificates, or any mistakes or errors in the issuance of the certificates or
in the certificates themselves.


 


(iv)                              Should the Participant die while holding the Option, the
Vested Portion of the Option shall remain exercisable by the Participant’s
executor or administrator, or the person or persons to whom the Participant’s
rights under this Agreement shall pass by will, by the laws of descent and
distribution, or by beneficiary designation, as the case may be, for the period
set forth in Section 4(a).  Any heir
or legatee of the Participant shall take rights herein granted subject to the
terms and conditions hereof.


 


5.                                       No Right to Continued Service.  Neither the Plan nor this Agreement shall be
construed as giving the Participant the right to be retained in the employ of,
or in any consulting relationship to, or to continue as a director of, the
Company or any Affiliate.  Further, the
Company or an Affiliate may at any time dismiss the Participant or discontinue
any consulting relationship, and any service of the Participant as a director
may be ended in accordance with the
provisions of the laws in which
the Company is then domiciled and the Company’s governing 


 


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instruments,
free from any liability or any claim under the Plan or this Agreement, except
as otherwise expressly provided herein.


 


6.                                       Transferability.  The Option is exercisable only by the
Participant during the Participant’s lifetime and may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
the Participant otherwise than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.


 


7.                                       Withholding.  A Participant shall be required to pay to the
Company or any Affiliate and the Company shall have the right and is hereby
authorized to withhold, any applicable withholding in respect of an Option, its
exercise or any payment or transfer under an Option or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such withholding taxes.


 


8.                                       Securities Laws.  Upon the acquisition of any Shares pursuant
to the exercise of the Option, the Participant will make or enter into such
written representations, warranties and agreements as the Committee may
reasonably request in order to comply with applicable securities laws or with
this Agreement.


 


9.                                       Notices.  Any notice necessary under this Agreement
shall be addressed to the Company in care of its Secretary at the principal
executive office of the Company and to the Participant at the address appearing
in the personnel records of the Company for the Participant or to either party
at such other address as either party hereto may hereafter designate in writing
to the other.  Any such notice shall be
deemed effective upon receipt thereof by the addressee.


 


10.                                 Choice of Law.  THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.


 


11.                                 Option Subject to Plan.  By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received a copy of
the Plan.  The Option is subject to the
Plan.  The terms and provisions of the
Plan, as it may be amended from time to time in accordance with its respective
terms, are hereby incorporated herein by reference.  The Participant acknowledges that this Agreement
and the Plan set forth the entire understanding between the Participant and the
Company regarding the Participant’s rights to acquire the Shares subject to
this Option and supersede all prior oral and written agreements with respect
thereto, including, but not limited to, any other agreement or understanding
between the Participant and the Company or an Affiliate relating to the
Participant’s employment, consulting relationship, or directorship, and any
termination thereof, his compensation, or his rights, claims or interests in or
to shares of the capital stock of the Company. 
In the event of a conflict between any term or provision contained
herein and a term or provision of the Plan, the applicable terms and provisions
of the Plan will govern and prevail.


 


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12.                                 Amendments.  The Committee at any time, and from time to
time, may amend the terms of the Option; provided, however, that the rights
under any Option shall not be materially impaired by any such amendment unless (i) the
Company requests the consent of the Participant and (ii) the Participant
consents in writing.


 


13.                                 Additional Terms/Acknowledgements.  By returning my
response to the Company as indicated in the instructions hereto, I am acknowledging
that I have the received, and understand and agree to the terms of, this
Agreement and the Plan (including any exhibits to each document).  I am further acknowledging that this
Agreement and the Plan (including any exhibits to each document) set forth the
entire understanding between myself and the Company regarding the rights to
acquire the shares of the Company’s capital stock subject to this Option and
supersede all prior oral and written agreements with respect thereto,
including, but not limited to, any other agreement or understanding between
myself and the Company or an Affiliate relating to my Continuous Service with
the Company and any termination thereof, my compensation, or my rights, claims
or interests in or to shares of the capital stock of the Company.  I further acknowledge that by returning my
response to the Company as indicated in the instructions hereto, I accept the
Option as set forth in this Agreement and the Plan (including any exhibits to
each document).


 


By returning my response
to the Company as indicated in the instructions hereto, I am also acknowledging
that, unless I specifically request (or have in the past specifically
requested) to receive communications regarding the Plan and this Option in
paper form, I agree to receive all communications regarding the Plan and this
Option (including but not limited to the Prospectus) by electronic delivery
through access on the Morgan Stanley Smith Barney Corporate Benefits website at
www.benefitaccess.com, which I may easily access, and understand how to access,
review and print the communications posted thereon.  In addition, by returning my response to the
Company as indicated in the instructions hereto, I agree it is my
responsibility to notify the Company of any changes to my mailing address so
that I may receive any shareholder information to be delivered by regular mail.


 


	
  SEAGATE
  TECHNOLOGY:

  	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  



 


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