Document:

Exhibit 10.1.5

 

Exhibit
10.1.5

	 	 	 
	Western®

	 	Western Digital Corporation
	Digital
	 	 
	 

	 	ID: 95-2657125
	 

	 	P.O. Box 19665
	 

	 	Lake Forest, CA   92630-7741
	 

	 	(949) 672-7000 x 27985/27986

Notice of Grant of Stock Units

and Stock Unit Award Agreement — Executives

	 	 	 	 	 
	«fn» «mn» «ln»

	 	Award Number:
	 	«nbr»
	«ad1»

	 	Plan:
	 	«pln»
	«ad2»

	 	ID:
	 	«id»
	«cty», «st» «z»

	 	 
	 	 

Congratulations! Effective «optdt», you have been granted stock units of Western Digital
Corporation. These stock units were granted under the 2004 Performance Incentive Plan (the
“Plan”).1

Vesting2:

	 	 	 	 	 
	Units	 	Vest Type	 	Full Vest
	«sp1»

	 	«vtpr1»
	 	«vdp1»
	«sp2»

	 	«vtp2»
	 	«vdp2»
	«sp3»

	 	«vtp3»
	 	«vdp3»
	«sp4»

	 	«vtp4»
	 	«vdp4»

Your stock unit award is subject to the terms and conditions of this Notice, the attached Standard
Terms and Conditions for Stock Unit Awards — Executives (the “Standard Terms”) and the Plan. By
accepting the award, you are agreeing to the terms of the award as set forth in those documents.
You should read the Plan, the Prospectus for the Plan, and the Standard Terms. The Standard Terms
and the Plan are each incorporated into (made a part of) this Notice by this reference. You do not
have to accept your award. If you do not agree to the terms of your award, you should promptly
return this Notice to the Western Digital Corporation Stock Plans Administrator.

A copy of the Plan, the Prospectus for the Plan, and the Standard Terms have been provided to you.
If you need another copy of these documents, or if you would like to confirm that you have the most
recent version, please contact the Company’s Stock Plans Administrator.

 

			
	1	 	The number of stock units subject to the award is
subject to adjustment under Section 7.1 of the Plan (for example, and without
limitation, in connection with stock splits).
	 
	2	 	The stock units covered by the award are subject to
forfeiture under Section 7 of the attached Standard Terms and Conditions for
Stock Unit Awards.

Stock Unit Award (Executives) Sept. 2007

 

 

Western Digital Corporation          20511 Lake Forest Drive

Lake Forest, California 92630          Telephone 949 672-7000

STANDARD TERMS AND CONDITIONS FOR

STOCK UNIT AWARDS — EXECUTIVES

2004 Performance Incentive Plan

1. Stock Units Subject to 2004 Performance Incentive Plan

The Stock Unit Award (the “Award”) referred to in the attached Notice of Grant of Stock Units and
Stock Unit Award Agreement (the “Notice”) was awarded under Western Digital Corporation’s (the
“Corporation’s”) Amended and Restated 2004 Performance Incentive Plan (the “Plan”). Each stock
unit covered by the Award (“Stock Unit”) is a non-voting unit of measurement that is deemed for
bookkeeping purposes to be equivalent to one outstanding share of Common Stock (subject to
adjustment as provided in Section 7.1 of the Plan). The holder of the Stock Units is referred to
herein as the “Participant.” Stock Units shall be used solely as a device for the determination of
the number of shares of Common Stock to eventually be delivered to the Participant if Stock Units
held by such Participant vest pursuant to Section 4, Section 7 or Section 8 and shall not be
treated as property or as a trust fund of any kind. Stock Units granted to the Participant shall
be credited to an unfunded bookkeeping account maintained by the Corporation on behalf of the
Participant (a “Stock Unit Account”).

The Stock Units are subject to the terms and provisions of the Notice, these Standard Terms and
Conditions for Stock Unit Awards — Executives (these “Standard Terms”), and the Plan. To the
extent any information in the Notice, the prospectus for the Plan, or other information provided by
the Corporation conflicts with the Plan and/or these Standard Terms, the Plan or these Standard
Terms, as applicable, shall control. To the extent any terms and provisions in these Standard
Terms conflict with the terms and provisions of the Plan, the Plan shall control. Capitalized
terms not defined herein have the meanings set forth in the Plan.

2. Award Agreement

The Notice and these Standard Terms, together, constitute the Award Agreement with respect to the
Award pursuant to Section 5.3 of the Plan.

3. Deferral of Stock Units

Notwithstanding anything to the contrary contained herein, the Participant may elect, on a form and
in a manner provided by the Corporation and by any applicable deferral election deadline, to defer
the Stock Units subject to the Award under the Corporation’s Deferred Compensation Plan (the
“Deferred Compensation Plan”). If the Participant makes such a deferral election, the Stock Units
will be paid (to the extent vested) in accordance with the payment provisions of the Deferred
Compensation Plan (including without limitation the provisions requiring a six-month payment delay
in the event that the Participant is a “specified employee” for purposes of Section 409A of the
Code), which are incorporated herein by this reference, and any applicable deferral election made
by the Participant under and in accordance with the rules of the Deferred Compensation Plan.
Whether or not the Participant elects to defer the Stock Units, any shares of Common Stock issued
or delivered with respect to the Stock Units shall be charged against the applicable share limits
of the Plan.

4. Vesting

Except as otherwise provided in this Award Agreement, the Award shall vest and become
nonforfeitable in percentage installments of the aggregate number of Stock Units as set forth in
the Notice.

Stock Unit Award (Executives) Sept. 2007

 

 

An Award may vest and become payable in connection with the occurrence of certain events involving
the Corporation as provided for in Section 7 of the Plan. Without limiting the foregoing but
subject to Sections 7.5, 7.6 and 7.7 of the Plan, to the extent that the Award is outstanding and
otherwise unvested immediately prior to the occurrence of a Change in Control Event, the Award
shall vest and become payable as to the outstanding and otherwise unvested Stock Units upon the
occurrence of the Change in Control Event. Notwithstanding the foregoing or anything in this Award
Agreement or the Plan, if the Participant has elected to defer the Stock Units as provided in
Section 3 and the event giving rise to any accelerated vesting pursuant to Section 7 of the Plan is
not also a “change in the ownership or effective control” of the Corporation or a “change in the
ownership of a substantial portion of the assets” of the Corporation for purposes of Section 409A
of the Code, then payment with respect to such deferred Stock Units shall not be made until such
Stock Units would have become vested and payable without regard to this Section 4 or Section 7 of
the Plan.

The vesting schedule requires continued employment or service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Award and the rights and
benefits under this Award Agreement. Employment or service for only a portion of the vesting
period, even if a substantial portion, will not entitle the Participant to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or following a termination
of employment or services as provided in Section 7 below or under the Plan.

5. Dividend Equivalent Rights Distributions

As of any date that the Corporation pays an ordinary cash dividend on its Common Stock, the
Corporation shall credit the Participant’s Stock Unit Account with an additional number of Stock
Units equal to (i) the per share cash dividend paid by the Corporation on its Common Stock on such
date, multiplied by (ii) the number of Stock Units remaining subject to the Award as of the related
dividend payment record date, divided by (iii) the Fair Market Value of a share of Common Stock on
the date of payment of such dividend. If the Participant has not made a deferral election with
respect to the Stock Units, then the Stock Units credited pursuant to the foregoing provisions of
this Section 5 shall be subject to the same vesting, payment and other terms, conditions and
restrictions as the original Stock Units to which they relate. If the Participant has made a
deferral election with respect to the Stock Units, then the Stock Units credited pursuant to the
foregoing provisions of this Section 5 shall be credited under, and paid in an equivalent number of
shares of Common Stock in accordance with the payment provisions of, the Deferred Compensation Plan
and any applicable deferral election made by the Participant under and in accordance with the rules
of the Deferred Compensation Plan.

6. Timing and Manner of Payment of Stock Units

Except as provided in Section 3 or 4 above, on or within fifteen (15) business days following the
vesting of any Stock Units granted (or credited pursuant to Section 5) to the Participant (whether
pursuant to Section 4 or Section 7 hereof or Section 7 of the Plan), the Corporation shall deliver
to the Participant a number of shares of Common Stock (either by delivering one or more
certificates for such shares or by entering such shares in book entry form, as determined by the
Corporation in its sole discretion) equal to the number of Stock Units that vest on the applicable
vesting date (including any Stock Units credited as dividend equivalents pursuant to Section 5 with
respect to the Stock Units that vest), subject to adjustment as provided in Section 7 of the Plan.
The Corporation’s obligation to deliver shares of Common Stock with respect to vested Stock Units
is subject to the condition precedent that the Participant (or other person entitled under the Plan
to receive any shares with respect to the vested Stock Units) delivers to the Corporation any
representations or other documents or assurances required pursuant to Section 8.1 of the Plan. The
Participant shall have no further rights with respect to any Stock Units that are paid pursuant to
this Section 6 or that are terminated pursuant to Section 7 hereof or Section 7 of the Plan, and
such Stock Units shall be removed from the Participant’s Stock Unit Account upon the date of such
payment or termination. The Corporation may, in its sole discretion, settle any Stock Units
credited as dividend equivalents by a cash payment equal to the Fair Market Value of a share of
Common Stock on the date of payment (as opposed to payment in the form of shares of Common Stock).

7. Termination of Employment

Subject to earlier vesting as provided in Section 4 and Section 8 hereof, if the Participant ceases
to be employed by or to provide services to the Corporation or its Subsidiaries (regardless of the
reason for such termination, whether

Stock Unit Award (Executives) Sept. 2007

2

 

with or without cause, voluntarily or involuntarily, or due to
disability), the Participant’s Stock Units shall be forfeited to the Corporation to the extent such
Stock Units have not become vested upon the date the Participant’s employment or services
terminate; provided, however, that in the event of the Participant’s death at a time when the
Participant is employed by or providing services to the Corporation or any of its Subsidiaries, a
portion of the otherwise unvested Stock Units shall automatically become fully vested as of such
date of death as set forth in the next sentence, and shall be paid to the Participant’s legal
representative as provided in Section 6 above. In the event the date of the Participant’s death is
at a time when the Participant is employed by or providing services to the Corporation or any of
its Subsidiaries, the number of Stock Units that shall become vested on the date of the
Participant’s death equals: (a) the number of Stock Units that would have vested on the next
scheduled vesting date applicable to the Award (as set forth in the Notice) (the “Next Scheduled
Vesting Date”) had the Participant continued to be employed through such date, multiplied by (b) a
fraction (not greater than one), the numerator of which is the number of calendar days following
the last scheduled vesting date applicable to the Award as set forth in the Notice (or, if there
was no such prior vesting date applicable to the Award, the date of grant of the Stock Units (the
“Measurement Date”) through and including the date of the Participant’s death, and the denominator
of which is the total number of calendar days in the period beginning with the day after the
Measurement Date and ending with the Next Scheduled Vesting Date.

8. Adjustments

The Administrator may accelerate payment and vesting of the Stock Units in such circumstances as
it, in its sole discretion, may determine. In addition, upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator will
make adjustments if appropriate in the number of Stock Units then outstanding and the number and
kind of securities that may be issued in respect of the Award. No such adjustment shall be made
with respect to any ordinary cash dividend for which dividend equivalents are paid pursuant to
Section 5.

9. Withholding Taxes

Upon or in connection with the vesting of the Stock Units, the payment of dividend equivalents
and/or the distribution of shares of Common Stock in respect of the Stock Units, the Corporation
(or the Subsidiary last employing the Participant) shall have the right at its option to (a)
require the Participant to pay or provide for payment in cash of the amount of any taxes that the
Corporation or the Subsidiary may be required to withhold with respect to such vesting, payment
and/or distribution, or (b) deduct from any amount payable to the Participant the amount of any
taxes which the Corporation or the Subsidiary may be required to withhold with respect to such
vesting, payment and/or distribution. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Award Agreement, the
Administrator may, in its sole discretion, direct the Corporation or the Subsidiary to reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole
shares, valued at their then fair market value (with the “fair market value” of such shares
determined in accordance with the applicable provisions of the Plan), to satisfy such withholding
obligation at the minimum applicable withholding rates. Any deferred Stock Units shall be subject
to the tax withholding provisions of the Deferred Compensation Plan.

10. Nontransferability

Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be
sold, assigned, transferred, pledged or otherwise disposed of, alienated, encumbered, either
voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply
to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and
distribution.

11. No Right to Employment

Nothing contained in this Award Agreement or the Plan constitutes an employment or service
commitment by the Corporation or any of its Subsidiaries, affects the Participant’s status, if he
or she is an employee, as an employee at will who is subject to termination without cause, confers
upon the Participant any right to remain employed by or in service to the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation or any

Stock Unit Award (Executives) Sept. 2007

3

 

Subsidiary at any time
to terminate such employment or service, or affects the right of the
Corporation or any Subsidiary
to increase or decrease the Participant’s other compensation.

12. Rights as a Stockholder

          Subject to the provisions of the Plan, the Notice and these Standard Terms, the Participant
shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly
provided in Section 5 with respect to dividend equivalent rights) and no voting rights with respect
to Stock Units awarded to the Participant and any shares of Common Stock underlying or issuable in
respect of such Stock Units until such shares of Common Stock are actually issued to and held of
record by the Participant. No adjustments will be made for dividends or other rights of a holder
for which the record date is prior to the date of issuance of the stock certificate.

13. Notices

Any notice to be given under the terms of this Award Agreement shall be in writing and addressed to
the Corporation at its principal office to the attention of the Secretary, and to the Participant
at the address last reflected on the Corporation’s payroll records, or at such other address as
either party may hereafter designate in writing to the other. Any such notice shall be delivered
in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or
certified, and deposited (postage and registry or certification fee prepaid) in a post office or
branch post office regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Participant is no longer employed by the Corporation or a
Subsidiary, shall be deemed to have been duly given five business days after the date mailed in
accordance with the foregoing provisions of this Section 13.

14. Arbitration

Any controversy arising out of or relating to this Award Agreement (including these Standard Terms)
and/or the Plan, their enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of their provisions, or any other controversy arising out
of or related to the Award, including, but not limited to, any state or federal statutory claims,
shall be submitted to arbitration in Orange County, California, before a sole arbitrator selected
from Judicial Arbitration and Mediation Services, Inc., Orange, California, or its successor
(“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected
from the American Arbitration Association, and shall be conducted in accordance with the provisions
of California Code of Civil Procedure §§ 1280 et seq. as the exclusive forum for the resolution of
such dispute; provided, however, that provisional injunctive relief may, but need not, be sought by
either party to this Award Agreement in a court of law while arbitration proceedings are pending,
and any provisional injunctive relief granted by such court shall remain effective until the matter
is finally determined by the arbitrator. Final resolution of any dispute through arbitration may
include any remedy or relief which the arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of the arbitration,
the arbitrator shall issue a written decision that sets forth the essential findings and
conclusions upon which the arbitrator’s award or decision is based. Any award or relief granted by
the arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by
any court of competent jurisdiction. The parties acknowledge and agree that they are hereby
waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising out of or in any way
connected with any of the matters referenced in the first sentence above. The parties agree that
Corporation shall be responsible for payment of the forum costs of any arbitration hereunder,
including the arbitrator’s fee. The parties further agree that in any proceeding with respect to
such matters, each party shall bear its own attorney’s fees and costs (other than forum costs
associated with the arbitration) incurred by it or him or her in connection with the resolution of
the dispute. By accepting the Award, the Participant consents to all of the terms and conditions
of this Award Agreement (including, without limitation, this Section 14).

15. Governing Law

This Award Agreement, including these Standard Terms, shall be interpreted and construed in
accordance with the laws of the State of Delaware (without regard to conflict of law principles
thereunder) and applicable federal law.

Stock Unit Award (Executives) Sept. 2007

4

 

16. Severability

If the arbitrator selected in accordance with Section 14 or a court of competent jurisdiction
determines that any portion of this Award Agreement (including these Standard Terms) or the Plan is
in violation of any statute or public policy, then only the portions of this Award Agreement or the
Plan, as applicable, which are found to violate such statute or public policy shall be stricken,
and all portions of this Award Agreement and the Plan which are not found to violate any statute or
public policy shall continue in full force and effect. Furthermore, it is the parties’ intent that
any order striking any portion of this Award Agreement and/or the Plan should modify the stricken
terms as narrowly as possible to give as much effect as possible to the intentions of the parties
hereunder.

17. Entire Agreement

This Award Agreement (including these Standard Terms) and the Plan together constitute the entire
agreement and supersede all prior understandings and agreements, written or oral, of the parties
hereto with respect to the subject matter hereof. The Plan and this Award Agreement may be amended
pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Participant hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a
waiver of any other provision hereof.

18. Section Headings

The section headings of this Award Agreement are for convenience of reference only and shall not be
deemed to alter or affect any provision hereof.

Stock Unit Award (Executives) Sept. 2007

5Exhibit 10.1.6

 

Exhibit 10.1.6

	 	 	 
	 

	 	Western Digital Corporation
	 

	 	ID: 95-2657125
	 

	 	P.O. Box 19665
	 

	 	Lake Forest, CA   92630-7741
	 

	 	(949) 672-7000 x 27985/27986

Notice of Grant of Stock Units

and Stock Unit Award Agreement

	 	 	 	 	 
	«fn» «mn» «ln»

	 	Award Number:
	 	«nbr»
	«ad1»

	 	Plan:
	 	«pln»
	«ad2»

	 	ID:
	 	«id»
	«cty», «st» «z»
	 	 	 	 

Congratulations! Effective «optdt», you have been granted stock units of Western Digital
Corporation. These stock units were granted under the 2004 Performance Incentive Plan (the
“Plan”).1

Vesting2:

	 	 	 	 	 
	Units	 	Vest Type	 	Full Vest
	«sp1»
	 	«vtpr1»
	 	«vdp1»
	«sp2»
	 	«vtp2»
	 	«vdp2»
	«sp3»
	 	«vtp3»
	 	«vdp3»
	«sp4»
	 	«vtp4»
	 	«vdp4»

Your stock unit award is subject to the terms and conditions of this Notice, the attached Standard
Terms and Conditions for Stock Unit Awards (the “Standard Terms”) and the Plan. By accepting the
award, you are agreeing to the terms of the award as set forth in those documents. You should read
the Plan, the Prospectus for the Plan, and the Standard Terms. The Standard Terms and the Plan are
each incorporated into (made a part of) this Notice by this reference. You do not have to accept
your award. If you do not agree to the terms of your award, you should promptly return this Notice
to the Western Digital Corporation Stock Plans Administrator.

A copy of the Plan, the Prospectus for the Plan, and the Standard Terms have been provided to
you. If you need another copy of these documents, or if you would like to confirm that you have
the most recent version, please contact the Company’s Stock Plans Administrator.

 

			
	1	 	The number of stock units subject to the award is
subject to adjustment under Section 7.1 of the Plan (for example, and without
limitation, in connection with stock splits).
	 
	2	 	The stock units covered by the award are subject to
forfeiture under Section 7 of the attached Standard Terms and Conditions for
Stock Unit Awards.

Stock Unit Award (Employees) Sept. 2007

 

 

Western
Digital Corporation    20511 Lake Forest Drive

Lake Forest, California 92630    Telephone 949 672-7000

STANDARD TERMS AND CONDITIONS FOR

STOCK UNIT AWARDS

2004 Performance Incentive Plan

1. Stock Units Subject to 2004 Performance Incentive Plan

The Stock Unit Award (the “Award”) referred to in the attached Notice of Grant of Stock Units and
Stock Unit Award Agreement (the “Notice”) was awarded under Western Digital Corporation’s (the
“Corporation’s”) Amended and Restated 2004 Performance Incentive Plan (the “Plan”). Each stock
unit covered by the Award (“Stock Unit”) is a non-voting unit of measurement that is deemed for
bookkeeping purposes to be equivalent to one outstanding share of Common Stock (subject to
adjustment as provided in Section 7.1 of the Plan). The holder of the Stock Units is referred to
herein as the “Participant.” Stock Units shall be used solely as a device for the determination of
the number of shares of Common Stock to eventually be delivered to the Participant if Stock Units
held by such Participant vest pursuant to Section 4, Section 7 or Section 8 and shall not be
treated as property or as a trust fund of any kind. Stock Units granted to the Participant shall
be credited to an unfunded bookkeeping account maintained by the Corporation on behalf of the
Participant (a “Stock Unit Account”).

The Stock Units are subject to the terms and provisions of the Notice, these Standard Terms and
Conditions for Stock Unit Awards (these “Standard Terms”), and the Plan. To the extent any
information in the Notice, the prospectus for the Plan, or other information provided by the
Corporation conflicts with the Plan and/or these Standard Terms, the Plan or these Standard Terms,
as applicable, shall control. To the extent any terms and provisions in these Standard Terms
conflict with the terms and provisions of the Plan, the Plan shall control. Capitalized terms not
defined herein have the meanings set forth in the Plan.

2. Award Agreement

The Notice and these Standard Terms, together, constitute the Award Agreement with respect to the
Award pursuant to Section 5.3 of the Plan.

3. Deferral of Stock Units

Notwithstanding anything to the contrary contained herein, the Administrator may determine that the
Participant is eligible to defer the Stock Units subject to the Award (such determination to be
made by delivery to the Participant of a deferral election form). In the event that the
Administrator makes such a determination, the Participant may elect, on a form and in a manner
provided by the Corporation and by any applicable deferral election deadline, to defer the Stock
Units subject to the Award under the Corporation’s Deferred Compensation Plan (the “Deferred
Compensation Plan”), in which case the Stock Units will be paid (to the extent vested) in
accordance with the payment provisions of the Deferred Compensation Plan (including without
limitation the provisions requiring a six-month payment delay in the event that the Participant is
a “specified employee” for purposes of Section 409A of the Code), which are incorporated herein by
this reference, and any applicable deferral election made by the Participant under and in
accordance with the rules of the Deferred Compensation Plan. If the Participant is not permitted
to defer the Stock Units, the Stock Units will be paid in accordance with this Award Agreement
without regard to this Section 3.

Stock Unit Award (Employees) Sept. 2007

 

 

4. Vesting

Except as otherwise provided in this Award Agreement, the Award shall vest and become
nonforfeitable in percentage installments of the aggregate number of Stock Units as set forth in
the Notice.

An Award may vest and become payable in connection with the occurrence of certain events involving
the Corporation as provided for in Section 7 of the Plan; provided, however, that, notwithstanding
anything to the contrary in this Award Agreement or the Plan, if the Participant has elected to
defer the Stock Units as provided in Section 3 and the event giving rise to any accelerated vesting
pursuant to Section 7 of the Plan is not also a “change in the ownership or effective control” of
the Corporation or a “change in the ownership of a substantial portion of the assets” of the
Corporation for purposes of Section 409A of the Code, then payment with respect to such deferred
Stock Units shall not be made until such Stock Units would have become vested and payable without
regard to Section 7 of the Plan.

The vesting schedule requires continued employment or service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Award and the rights and
benefits under this Award Agreement. Employment or service for only a portion of the vesting
period, even if a substantial portion, will not entitle the Participant to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or following a termination
of employment or services as provided in Section 7 below or under the Plan.

5. Dividend Equivalent Rights Distributions

As of any date that the Corporation pays an ordinary cash dividend on its Common Stock, the
Corporation shall credit the Participant’s Stock Unit Account with an additional number of Stock
Units equal to (i) the per share cash dividend paid by the Corporation on its Common Stock on such
date, multiplied by (ii) the number of Stock Units remaining subject to the Award as of the related
dividend payment record date, divided by (iii) the Fair Market Value of a share of Common Stock on
the date of payment of such dividend. The Stock Units credited pursuant to the foregoing
provisions of this Section 5 shall be subject to the same vesting, payment and other terms,
conditions and restrictions as the original Stock Units to which they relate. Notwithstanding the
preceding sentence, if the Participant is permitted to make, and has made, a deferral election with
respect to the Stock Units, then the Stock Units credited pursuant to the foregoing provisions of
this Section 5 shall be credited under, and paid in an equivalent number of shares of Common Stock
in accordance with the payment provisions of, the Deferred Compensation Plan and any applicable
deferral election made by the Participant under and in accordance with the rules of the Deferred
Compensation Plan.

6. Timing and Manner of Payment of Stock Units

Except as provided in Section 3 or 4 above, on or within fifteen (15) business days following the
vesting of any Stock Units granted (or credited pursuant to Section 5) to the Participant (whether
pursuant to Section 4 or Section 7 hereof or Section 7 of the Plan), the Corporation shall deliver
to the Participant a number of shares of Common Stock (either by delivering one or more
certificates for such shares or by entering such shares in book entry form, as determined by the
Corporation in its sole discretion) equal to the number of Stock Units that vest on the applicable
vesting date (including any Stock Units credited as dividend equivalents pursuant to Section 5 with
respect to the Stock Units that vest), subject to adjustment as provided in Section 7 of the Plan.
The Corporation’s obligation to deliver shares of Common Stock with respect to vested Stock Units
is subject to the condition precedent that the Participant (or other person entitled under the Plan
to receive any shares with respect to the vested Stock Units) delivers to the Corporation any
representations or other documents or assurances required pursuant to Section 8.1 of the Plan. The
Participant shall have no further rights with respect to any Stock Units that are paid pursuant to
this Section 6 or that are terminated pursuant to Section 7 hereof or Section 7 of the Plan, and
such Stock Units shall be removed from the Participant’s Stock Unit Account upon the date of such
payment or termination. The Corporation may, in its sole discretion, settle any Stock Units
credited as dividend equivalents by a cash payment equal to the Fair Market Value of a share of
Common Stock on the date of payment (as opposed to payment in the form of shares of Common Stock).

Stock Unit Award (Employees) Sept. 2007

 

 

7. Termination of Employment

Subject to earlier vesting as provided in Section 4 and Section 8 hereof, if the Participant ceases
to be employed by or to provide services to the Corporation or its Subsidiaries (regardless of the
reason for such termination, whether with or without cause, voluntarily or involuntarily, or due to
disability), the Participant’s Stock Units shall be forfeited to the Corporation to the extent such
Stock Units have not become vested upon the date the Participant’s employment or services
terminate; provided, however, that in the event of the Participant’s death at a time when the
Participant is employed by or providing services to the Corporation or any of its Subsidiaries, a
portion of the otherwise unvested Stock Units shall automatically become fully vested as of such
date of death as set forth in the next sentence, and shall be paid to the Participant’s legal
representative as provided in Section 6 above. In the event the date of the Participant’s death is
at a time when the Participant is employed by or providing services to the Corporation or any of
its Subsidiaries, the number of Stock Units that shall become vested on the date of the
Participant’s death equals: (a) the number of Stock Units that would have vested on the next
scheduled vesting date applicable to the Award (as set forth in the Notice) (the “Next Scheduled
Vesting Date”) had the Participant continued to be employed through such date, multiplied by (b) a
fraction (not greater than one), the numerator of which is the number of calendar days following
the last scheduled vesting date applicable to the Award as set forth in the Notice (or, if there
was no such prior vesting date applicable to the Award, the date of grant of the Stock Units (the
“Measurement Date”) through and including the date of the Participant’s death, and the denominator
of which is the total number of calendar days in the period beginning with the day after the
Measurement Date and ending with the Next Scheduled Vesting Date.

8. Adjustments

The Administrator may accelerate payment and vesting of the Stock Units in such circumstances as
it, in its sole discretion, may determine. In addition, upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator will
make adjustments if appropriate in the number of Stock Units then outstanding and the number and
kind of securities that may be issued in respect of the Award. No such adjustment shall be made
with respect to any ordinary cash dividend for which dividend equivalents are paid pursuant to
Section 5.

9. Withholding Taxes

Upon or in connection with the vesting of the Stock Units, the payment of dividend equivalents
and/or the distribution of shares of Common Stock in respect of the Stock Units, the Corporation
(or the Subsidiary last employing the Participant) shall have the right at its option to (a)
require the Participant to pay or provide for payment in cash of the amount of any taxes that the
Corporation or the Subsidiary may be required to withhold with respect to such vesting, payment
and/or distribution, or (b) deduct from any amount payable to the Participant the amount of any
taxes which the Corporation or the Subsidiary may be required to withhold with respect to such
vesting, payment and/or distribution. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Award Agreement, the
Administrator may, in its sole discretion, direct the Corporation or the Subsidiary to reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole
shares, valued at their then fair market value (with the “fair market value” of such shares
determined in accordance with the applicable provisions of the Plan), to satisfy such withholding
obligation at the minimum applicable withholding rates. Any deferred Stock Units shall be subject
to the tax withholding provisions of the Deferred Compensation Plan.

10. Nontransferability

Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be
sold, assigned, transferred, pledged or otherwise disposed of, alienated, encumbered, either
voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply
to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and
distribution.

Stock Unit Award (Employees) Sept. 2007

 

 

11. No Right to Employment

Nothing contained in this Award Agreement or the Plan constitutes an employment or service
commitment by the Corporation or any of its Subsidiaries, affects the Participant’s status, if he
or she is an employee, as an employee at will who is subject to termination without cause, confers
upon the Participant any right to remain employed by or in service to the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time
to terminate such employment or service, or affects the right of the Corporation or any Subsidiary
to increase or decrease the Participant’s other compensation.

12. Rights as a Stockholder

Subject to the provisions of the Plan, the Notice and these Standard Terms, the Participant shall
have no rights as a stockholder of the Corporation, no dividend rights (except as expressly
provided in Section 5 with respect to dividend equivalent rights) and no voting rights with respect
to Stock Units awarded to the Participant and any shares of Common Stock underlying or issuable in
respect of such Stock Units until such shares of Common Stock are actually issued to and held of
record by the Participant. No adjustments will be made for dividends or other rights of a holder
for which the record date is prior to the date of issuance of the stock certificate.

13. Notices

Any notice to be given under the terms of this Award Agreement shall be in writing and addressed to
the Corporation at its principal office to the attention of the Secretary, and to the Participant
at the address last reflected on the Corporation’s payroll records, or at such other address as
either party may hereafter designate in writing to the other. Any such notice shall be delivered
in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or
certified, and deposited (postage and registry or certification fee prepaid) in a post office or
branch post office regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Participant is no longer employed by the Corporation or a
Subsidiary, shall be deemed to have been duly given five business days after the date mailed in
accordance with the foregoing provisions of this Section 13.

14. Arbitration

Any controversy arising out of or relating to this Award Agreement (including these Standard Terms)
and/or the Plan, their enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of their provisions, or any other controversy arising out
of or related to the Award, including, but not limited to, any state or federal statutory claims,
shall be submitted to arbitration in Orange County, California, before a sole arbitrator selected
from Judicial Arbitration and Mediation Services, Inc., Orange, California, or its successor
(“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected
from the American Arbitration Association, and shall be conducted in accordance with the provisions
of California Code of Civil Procedure §§ 1280 et seq. as the exclusive forum for the resolution of
such dispute; provided, however, that provisional injunctive relief may, but need not, be sought by
either party to this Award Agreement in a court of law while arbitration proceedings are pending,
and any provisional injunctive relief granted by such court shall remain effective until the matter
is finally determined by the arbitrator. Final resolution of any dispute through arbitration may
include any remedy or relief which the arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of the arbitration,
the arbitrator shall issue a written decision that sets forth the essential findings and
conclusions upon which the arbitrator’s award or decision is based. Any award or relief granted by
the arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by
any court of competent jurisdiction. The parties acknowledge and agree that they are hereby
waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising out of or in any way
connected with any of the matters referenced in the first sentence above. The parties agree that
Corporation shall be responsible for payment of the forum costs of any arbitration hereunder,
including the arbitrator’s fee. The parties further agree that in any proceeding with respect to
such matters, each party shall bear its own attorney’s fees and costs (other than forum costs
associated with the arbitration) incurred by it or him or her in connection with the resolution of
the dispute. By accepting the Award, the Participant consents to all of the terms and conditions
of this Award Agreement (including, without limitation, this Section 14).

Stock Unit Award (Employees) Sept. 2007

 

 

15. Governing Law

This Award Agreement, including these Standard Terms, shall be interpreted and construed in
accordance with the laws of the State of Delaware (without regard to conflict of law principles
thereunder) and applicable federal law.

16. Severability

If the arbitrator selected in accordance with Section 14 or a court of competent jurisdiction
determines that any portion of this Award Agreement (including these Standard Terms) or the Plan is
in violation of any statute or public policy, then only the portions of this Award Agreement or the
Plan, as applicable, which are found to violate such statute or public policy shall be stricken,
and all portions of this Award Agreement and the Plan which are not found to violate any statute or
public policy shall continue in full force and effect. Furthermore, it is the parties’ intent that
any order striking any portion of this Award Agreement and/or the Plan should modify the stricken
terms as narrowly as possible to give as much effect as possible to the intentions of the parties
hereunder.

17. Entire Agreement

This Award Agreement (including these Standard Terms) and the Plan together constitute the entire
agreement and supersede all prior understandings and agreements, written or oral, of the parties
hereto with respect to the subject matter hereof. The Plan and this Award Agreement may be amended
pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Participant hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a
waiver of any other provision hereof.

18. Section Headings

The section headings of this Award Agreement are for convenience of reference only and shall not be
deemed to alter or affect any provision hereof.

Stock Unit Award (Employees) Sept. 2007

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