Document:

Exhibit 10.1.9

 

Exhibit 10.1.9

WESTERN DIGITAL CORPORATION

AMENDED AND RESTATED 2004 PERFORMANCE INCENTIVE PLAN

NON-EMPLOYEE DIRECTOR OPTION GRANT PROGRAM

1. Establishment; Purpose. This Non-Employee Director Option Grant Program (this
“Program”) is adopted under the Western Digital Corporation Amended and Restated 2004 Performance
Incentive Plan (the “Plan”). The purpose of this Program is to promote the success of the
Corporation and the interests of its stockholders by providing members of the Board who are not
officers or employees of the Corporation or one of its Subsidiaries (“Non-Employee Directors”) an
opportunity to acquire an ownership interest in the Corporation and more closely aligning the
interests of Non-Employee Directors and stockholders. Except as otherwise expressly provided
herein, the provisions of the Plan shall govern all awards made pursuant to this Program.
Capitalized terms are defined in the Plan if not defined herein.

2. Participation. Awards under this Program shall be made only to Non-Employee Directors,
shall be evidenced by award agreements substantially in the form of Exhibit 1 hereto and shall be
further subject to such other terms and conditions set forth therein.

3. Option Grants.

     3.1 Initial Award for New Non-Employee Directors.

     3.1.1 Upon or as soon as reasonably practicable after first being appointed or elected
to the Board and subject to approval by the Board or the Administrator, a Non-Employee
Director who has not previously served on the Board shall be granted a nonqualified stock
option to purchase a number of shares of Common Stock that produces an approximate value for
the option grant equal to $300,000 (using a Black-Scholes valuation as of the time of grant
as determined in consultation with Company management and based on the Fair Market Value of
a share of Common Stock on the trading day immediately preceding the grant date of the stock
option); provided, however, that the Board or the Administrator, in its discretion, may at
the time of grant of the award increase or decrease the number of shares of Common Stock
otherwise subject to the stock option. The date of grant of each such stock option will be
the date on which such stock option is approved by the Board or the Administrator, which
date shall coincide to the extent practicable with the date such Non-Employee Director is
first appointed or elected to the Board.

     3.1.2 Each member of the Board who was previously an employee of the Corporation or any
of its Subsidiaries who first becomes a Non-Employee Director by virtue of retiring or
otherwise ceasing to be employed by the Corporation or any of its Subsidiaries shall, upon
or as soon as reasonably practicable after the date that he or she is first a Non-Employee
Director, be granted a nonqualified stock option to purchase a number of shares of Common
Stock that produces an approximate value for the option grant (using a Black-Scholes
valuation as of the time of grant as determined in consultation with Company management and
based on the Fair Market Value of a share of Common Stock on the trading day immediately
preceding the grant date of the stock option) of (i) $100,000, divided by (ii) 365,
multiplied by (iii) the number of days from

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the date such person is first a Non-Employee Director to the anticipated date of the
Corporation’s next annual meeting of stockholders; provided, however, that the Board or the
Administrator, in its discretion, may at the time of grant of the award increase or decrease
the number of shares of Common Stock otherwise subject to the stock option. The date of
grant of each such stock option will be the date on which such stock option is approved by
the Board or the Administrator, which date shall coincide to the extent practicable with the
date such person first becomes a Non-Employee Director.

3.2 Subsequent Awards. Immediately following the Corporation’s regular annual meeting of
stockholders in each year during the term of the Plan commencing in 2005 and subject to
approval by the Board or the Administrator, each Non-Employee Director then in office shall
be granted a nonqualified stock option to purchase a number of shares of Common Stock that
produces an approximate value for the option grant equal to $100,000 (using a Black-Scholes
valuation as of the time of grant as determined in consultation with Company management and
based on the Fair Market Value of a share of Common Stock on the trading day immediately
preceding the grant date of the stock option); provided, however, that the Board or the
Administrator, in its discretion, may at the time of grant of the award increase or decrease
the number of shares of Common Stock otherwise subject to the stock option. The date of
grant of each such stock option will be the date on which such stock option is approved by
the Board or the Administrator, which date shall coincide to the extent practicable with the
date of the annual meeting of stockholders. An individual who was previously a member of
the Board, who then ceased to be a member of the Board for any reason, and who then again
becomes a Non-Employee Director shall thereupon again become eligible to be granted stock
options under this Section 3.2.

3.3 Option Price. The purchase price per share of the Common Stock covered by each option
granted pursuant to this Section 3 shall be 100 percent of the Fair Market Value of a share
of Common Stock on the date of grant of the option (the “Award Date”). The exercise price
of any option granted under this Section 3 shall be paid in full at the time of each
purchase in cash or by check, in shares of Common Stock valued at their fair market value on
the date of exercise of the option, or partly in such shares and partly in cash, or in any
other manner authorized by the Administrator pursuant to Section 5.5 of the Plan; provided
that any shares used in payment shall have been owned by the Non-Employee Director for at
least six months prior to the date of exercise.

3.4 Transfer Restrictions. Options granted pursuant to this Section 3 shall be subject to
the transfer restrictions set forth in Section 5.7 of the Plan. For purposes of clarity,
the Administrator has not approved any transfer exceptions with respect to the options in
accordance with Section 5.7.2 of the Plan.

4. Option Period and Exercisability. Each option granted under Section 3 above and all
rights or obligations under this Program with respect to a particular option shall expire ten years
after the date of grant of such option and shall be subject to earlier termination as provided
below. Subject to Sections 5, 6 and 7 hereof, each option granted under Section 3 shall become
exercisable as to 25% of the total number of shares subject thereto on the first anniversary of the

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date of grant of the option and as to an additional 6.25% of the total number of shares subject
thereto at the end of each of the next 12 three-month periods thereafter.

5. Termination of Directorship. Subject to the maximum ten-year term of the option and
subject to earlier termination pursuant to Section 7 below, if a Non-Employee Director ceases to be
a member of the Board for any reason, the following rules shall apply with respect to any option
granted to the Non-Employee Director pursuant to Section 3 above (the last day that the Director is
a member of the Board is, except as otherwise provided below, referred to as the Director’s
“Severance Date”):

	 	•	 	other than as expressly provided below in this Section 5, (a) the Non-Employee
Director will have until the date that is one (1) year after his or her Severance Date
to exercise such option (or portion thereof) to the extent that it was vested on the
Severance Date, (b) such option, to the extent not vested on the Severance Date, shall
terminate on the Severance Date, and (c) such option, to the extent exercisable for the
one-year period following the Severance Date and not exercised during such period,
shall terminate at the close of business on the last day of the one-year period;
	 
	 	•	 	if the Non-Employee Director ceases to be a member of the Board due to his or her
Retirement (as defined below) and the Non-Employee Director has served as a member of
the Board of Directors for at least twelve (12) continuous months following the grant
date of such option, (a) the Non-Employee Director will have until the date that is
three (3) years after his or her Severance Date to exercise such option, (b) such
option, to the extent not otherwise vested on the Severance Date, shall automatically
become fully vested as of the Severance Date, and (c) such option, to the extent
exercisable for the three-year period following the Severance Date and not exercised
during such period, shall terminate at the close of business on the last day of the
three-year period;

provided, however, that if the Board or the Administrator determines that any such Non-Employee
Director who has Retired renders services as an employee, director, consultant, contractor or
otherwise to a competitor of the Corporation or one of its Subsidiaries at any time during such
three-year period, then any such option shall immediately terminate to the extent not exercised as
of the date the Board or the Administrator makes such determination. In addition, in such event
the Corporation shall have the right to recover any profits realized by such Retired Non-Employee
Director as a result of any exercise of such option during the six-month period prior to the date
such Non-Employee Director commenced providing such services to a competitor.

     For purposes of this Section 5, the term “Retirement” (which term shall include “Retired”)
shall mean the cessation of a director’s services as a member of the Board due to his or her
voluntary resignation at any time after such director has served as a member of the Board for at
least forty-eight (48) months.

     Notwithstanding any other provision of this Section 5, if a Non-Employee Director ceases to be
a member of the Board (regardless of the reason) but, immediately thereafter, is

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employed by the Corporation or one of its Subsidiaries, such director’s Severance Date shall
not be the date the director ceases to be a member of the Board but instead shall be the last day
that the director is either or both (1) a member of the Board and/or (2) employed by the
Corporation or a Subsidiary.

6. Adjustments. Options granted under this Program shall be subject to adjustment as
provided in Section 7.1 of the Plan, but only to the extent that such adjustment is consistent with
adjustments to options held by persons other than executive officers or directors of the
Corporation (to the extent that persons other than executive officers or directors of the
Corporation then hold options). The grant levels reflected in Section 3 above shall be
automatically adjusted upon the record date for any stock split, reverse stock split, or stock
dividend to give effect to such change in capitalization unless otherwise provided by the Board or
the Administrator in the circumstances, and may be adjusted in the discretion of the Board or the
Administrator in any other circumstances contemplated by Section 7.1.

7. Acceleration and Possible Early Termination. If a Change in Control Event (as such term
is defined in the Plan) occurs and in connection with such Change in Control Event a Non-Employee
Director ceases to be a member of the Board, each option granted under Section 3 above to such
Non-Employee Director, to the extent such option is then outstanding, shall become immediately
exercisable and vested in full. For purposes of this Section 7, but without limitation, a director
will be deemed to have ceased to be a member of the Board in connection with a Change in Control
Event if such director (a) is removed by or resigns upon the request of any Person exercising
practical voting control over the Corporation following such Change in Control Event or a person
acting upon authority or at the instruction of such Person, or (b) is willing or able to continue
as a member of the Board but is not re-elected to or retained as a member of the Board by the
Corporation’s stockholders at the stockholder vote or consent action for the election of directors
that precedes and is taken in connection with, or next follows, such Change in Control Event.

     Each option granted under this Program shall be subject to adjustment and termination pursuant
to Section 7 of the Plan.

8. Maximum Number of Shares; Amendment; Administration. If option grants otherwise
required pursuant to this Program would otherwise exceed any applicable share limit under Section
4.2 of the Plan, such grants shall be made pro-rata to directors entitled to such grants. The
Board or the Administrator may from time to time amend this Program without stockholder approval;
provided that no such amendment shall materially and adversely affect the rights of a Non-Employee
Director as to an option granted under this Program before the adoption of such amendment. This
Program does not limit the authority of the Board or the Administrator to make other,
discretionary award grants to Non-Employee Directors pursuant to the Plan. The Plan
Administrator’s power and authority to construe and interpret the Plan and awards thereunder
pursuant to Section 3.1 of the Plan shall extend to this Program and awards granted hereunder. As
provided in Section 3.2 of the Plan, any action taken by, or inaction of, the Administrator
relating or pursuant to this Program and within its authority or under applicable law shall be
within the absolute discretion of that entity or body and shall be conclusive and binding upon all
persons.

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###

As amended (Sections 3.1 and 3.2) and restated November 17, 2005

As amended (Section 5) November 9, 2006

As amended (Sections 3.1 and 3.2) August 22, 2007

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EXHIBIT 1

Western Digital Corporation      20511 Lake Forest Drive

Lake Forest, California 92630      Telephone 949-672-7000

Notice Of Grant Of Stock Option

and Option Agreement — Non-Employee Directors

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Western Digital Corporation (the “Corporation”) has granted to you (the “Participant”), effective
on the Date of Grant set forth below, a nonqualified option to purchase shares of the Corporation’s
Common Stock (the “Option”) as follows:

	 	 	 	 	 
	 

	 	Grant Number
	 	«nbr»
	 

	 	Date of Grant
	 	«optdt»
	 

	 	Option Price per Share1
	 	$«optprc»
	 

	 	Number of Shares Granted1
	 	«shgtd»
	 

	 	Expiration Date2	 	 

1. Option Subject to Amended and Restated 2004 Performance Incentive Plan. The Option was granted
pursuant to the Non-Employee Director Option Grant Program (the “Program”), adopted under the
Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (the “Plan”). The
Option is subject to the terms and conditions of this Notice, the Program and the Plan. By
accepting the Option, you are agreeing to the terms of the Option as set forth in these documents.
A copy of each of these documents has been provided to you. If you need another copy of any of
these documents, or if you would like to confirm that you have the most recent version, you may
obtain another copy in the Company Library on the E*TRADE Stock Plans web site. The documents are
also available on the Western Digital Intranet site under Legal.

You should read the Program, the Plan, the Prospectus for the Plan and this Notice. The Program
and the Plan are each incorporated into (made a part of) this Notice by this reference. To the
extent any information in this Notice, the Prospectus for the Plan, or other information provided
by the Corporation conflicts with the Program and/or the Plan, the Program or the Plan, as
applicable, shall control. Capitalized terms not defined herein have the meanings set forth in the
Plan.

You do not have to accept the Option. If you do not agree to the terms of the Option, you should
promptly return this Notice to the Western Digital Corporation Stock Plans Administrator.

 

			
	1	 	The number of shares subject to the Option and the
per-share exercise price of the Option are subject to adjustment under Section
6 of the Program and Section 7.1 of the Plan (for example, and without
limitation, in connection with stock splits).
	 
	2	 	The Option is subject to early termination under Sections 5 and 7 of the Program.

 

 

Unless otherwise expressly provided in other sections of this Notice, provisions of the Plan that
confer discretionary authority on the Board or the Administrator do not and shall not be deemed to
create any rights in the Participant unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate
action of the Board or the Administrator under the Plan after the grant date of the Option.

2. Option Agreement. This Notice constitutes the Option Agreement with respect to the
Option pursuant to Section 5.3 of the Plan.

3. Type of Stock Option. The Option is not intended to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended.

4. Vesting. Subject to earlier termination in accordance with Section 5, the Option shall
vest and become exercisable in percentage installments of the aggregate number of shares
subject to the Option as set forth in this Notice and Section 4 of the Program. The Option
may be exercised only to the extent it is vested and exercisable. To the extent that the
Option is vested and exercisable, the Participant has the right to exercise the Option (to
the extent not previously exercised), and such right shall continue, until the expiration
or earlier termination of the Option as provided in Section 5. Fractional share interests
shall be disregarded, but may be cumulated.

The vesting schedule requires continued service through each applicable vesting date as a condition
to the vesting of the applicable installment of the Option and the rights and benefits under this
Option Agreement. Service for only a portion of the vesting period with respect to a vesting
installment, even if services are provided for a substantial portion of that period, 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 services as provided under Section 5 of the Program
or under the Plan.

5. Expiration of Option. The Option shall expire and the Participant shall have no further rights
with respect thereto upon the earliest to occur of (a) the termination of the Option in connection
with a termination of the director’s services as provided in Section 5 of the Program, (b) the
termination of the Option as provided in Section 7.4 of the Plan, or (c) the Expiration Date set
forth in this Notice. The Option may not be exercised at any time after a termination or
expiration of the Option.

6. Exercise of Option. The Option shall be exercisable by the delivery to the Secretary of the
Corporation (or such other person as the Administrator may require pursuant to such administrative
exercise procedures as the Administrator may implement from time to time) of:

	 	•	 	a written notice stating the number of shares of Common Stock to be purchased
pursuant to the Option or by the completion of such other administrative exercise
procedures as the Administrator may require from time to time,
	 
	 	•	 	payment in full for the purchase price (the per-share exercise price of the Option
multiplied by the number of shares to be purchased) in cash, check or by electronic
funds transfer to the Corporation, or (subject to compliance with all applicable laws,
rules, regulations and listing requirements and further subject to such rules as the
Administrator may adopt as to any non-cash payment) in shares of Common Stock already
owned by the Participant, valued at their fair market value on the exercise date,
provided, however, that any shares initially acquired upon exercise of
a stock option or otherwise from the Corporation must have been owned by the
Participant for at least six (6) months before the date of such exercise; and

 

 

	 	•	 	any written statements or agreements required by the Administrator pursuant to
Section 8.1 of the Plan.

The Administrator also may, but is not required to, authorize a non-cash payment alternative by
notice and third party payment in such manner as may be authorized by the Administrator.

7. Nontransferability. The Option and any other rights of the Participant under this Option
Agreement, the Program or the Plan are nontransferable and exercisable only by the Participant,
except as set forth in Section 5.7 of the Plan. For purposes of clarity, the Administrator has not
authorized any transfer exceptions as contemplated by Section 5.7.2 of the Plan.

8. No Service Commitment. Nothing contained in this Option Agreement, the Program or the Plan
constitutes an employment or service commitment by the Corporation or any of its Subsidiaries,
confers upon the Participant any right to remain 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 service, or affects the right of the Corporation or any Subsidiary to increase or decrease the
Participant’s other compensation.

9. Rights as a Stockholder. Neither the Participant nor any beneficiary or other person claiming
under or through the Participant shall have any right, title, interest or privilege in or to any
shares of Common Stock subject to the Option except as to such shares, if any, as shall have been
actually issued to such person and recorded in such person’s name following the exercise of the
Option or any portion thereof.

10. Notices. Any notice to be given under the terms of this Option 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 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 a member of the Board
of Directors, shall be deemed to have been duly given five business days after the date mailed in
accordance with the foregoing provisions of this Section 10.

11. Arbitration. Any controversy arising out of or relating to this Option Agreement, the Program
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 or claim
arising out of or related to the Option or the Participant’s employment, 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 Option 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 Option, the Participant
consents to all of the terms and conditions of this Option Agreement (including, without
limitation, this Section 11).

12. Governing Law. This Option Agreement 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.

13. Severability. If the arbitrator selected in accordance with Section 11 or a court of competent
jurisdiction determines that any portion of this Option Agreement, the Program or the Plan is in
violation of any statute or public policy, then only the portions of this Option Agreement, the
Program or the Plan, as applicable, which are found to violate such statute or public policy shall
be stricken, and all portions of this Option Agreement, the Program 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 Option
Agreement, the Program 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.

14. Entire Agreement. This Option Agreement, the Program 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, the Program and this Option
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.

15. Section Headings. The section headings of this Option Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provision hereof.Exhibit 10.1.10

 

Exhibit 10.1.10

WESTERN DIGITAL CORPORATION

AMENDED AND RESTATED 2004 PERFORMANCE INCENTIVE PLAN

NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT GRANT PROGRAM

1. Establishment. The Corporation maintains the Western Digital Corporation Non-Employee
Directors Restricted Stock Unit Plan, which plan is hereby amended and restated in its entirety
effective as of November 17, 2005 (the “Effective Date”) as set forth herein and is hereby renamed
the Non-Employee Director Restricted Stock Unit Grant Program (the “Program”). This amendment and
restatement of the Program is effective as to grants on and after the Effective Date; awards
granted under the Program prior to the Effective Date are governed by the applicable terms of the
Program as in effect on the date of grant of the award. The Program has been restated as an
Appendix to, and any shares of Common Stock issued with respect to awards granted under the Program
on and after the Effective Date shall be charged against the applicable share limits of, the
Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (the “Plan”).
Except as otherwise expressly provided herein, the provisions of the Plan shall govern all awards
made pursuant to the Program. Capitalized terms are defined in the Plan if not defined herein.

2. Purpose. The purpose of the Program is to promote the success of the Corporation and
the interests of its stockholders by providing members of the Board who are not officers or
employees of the Corporation or one of its Subsidiaries (“Non-Employee Directors”) an opportunity
to acquire an ownership interest in the Corporation and more closely aligning the interests of
Non-Employee Directors and stockholders.

3. Participation. An award of Stock Units (a “Stock Unit Award”) under the Program shall
be made only to Non-Employee Directors, shall be evidenced by a Notice of Award of Stock Units
substantially in the form attached as Exhibit 1 hereto and shall be further subject to such
other terms and conditions set forth therein. As used in the Program, the term “Stock Unit” shall
mean a non-voting unit of measurement which 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) solely for purposes of the Program. 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 a Non-Employee
Director if Stock Units held by such Non-Employee Director vest pursuant to Section 6 or Section 8.
Stock Units shall not be treated as property or as a trust fund of any kind. Stock Units granted
to a Non-Employee Director pursuant to the Program shall be credited to an unfunded bookkeeping
account maintained by the Corporation on behalf of the Non-Employee Director (a “Program Account”).

4. Annual Stock Unit Awards.

4.1 Annual Awards. On each January 1 during the term of the Plan commencing on January 1,
2006, each Non-Employee Director then in office shall be granted automatically (without any
action by the Board or the Administrator) a Stock Unit Award with respect to a number
(rounded down to the nearest whole number) of Stock Units equal to (i) $100,000, divided by
(ii) the Fair Market Value of a share of Common Stock on the applicable January 1 (subject
to adjustment as provided in Section 7.1 of the Plan).

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An individual who was previously a member of the Board, who then ceased to be a member of
the Board for any reason, and who then again becomes a Non-Employee Director shall thereupon
again become eligible to be granted Stock Units under this Section 4.1.

4.2 Initial Award for New Non-Employee Directors. Each Non-Employee Director, upon first
becoming a Non-Employee Director (including, without limitation, by virtue of being
appointed or elected to the Board or, with respect to any member of the Board who is
employed by the Corporation or any of its Subsidiaries, by virtue of retiring or otherwise
ceasing to be employed by the Corporation or any of its Subsidiaries), shall be granted
automatically (without any action by the Board or the Administrator) a Stock Unit Award with
respect to a number of Stock Units equal to (i) the number of Stock Units in the Annual
Award immediately preceding the date such person first becomes a Non-Employee Director,
divided by (ii) 365, multiplied by (iii) the number of days from the date such person first
becomes a Non-Employee Director to the immediately following January 1.

4.3 Transfer Restrictions. Stock Units granted pursuant to this Section 4 shall be subject
to the transfer restrictions set forth in Section 5.7 of the Plan. For purposes of clarity,
the Administrator has not approved any transfer exceptions with respect to Stock Units
granted pursuant to the Program in accordance with Section 5.7.2 of the Plan.

5. Dividend and Voting Rights.

5.1 Limitation of Rights Associated with Stock Units. A Non-Employee Director shall have no
rights as a stockholder of the Corporation, no dividend rights (except as expressly provided
in Section 5.2 with respect to dividend equivalent rights) and no voting rights, with
respect to Stock Units granted pursuant to the Program 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 Non-Employee Director. 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.

5.2 Dividend Equivalent Rights. As of any date that the Corporation pays a dividend (other
than in shares of Common Stock) upon issued and outstanding Common Stock, or makes a
distribution (other than in shares of Common Stock) with respect thereto, a Non-Employee
Director’s Program Account shall be credited with an additional number (rounded down to the
nearest whole number) of Stock Units equal to (i) the “fair value” of any dividend (or other
distribution) with respect to one share of Common Stock, multiplied by (ii) the number of
unvested Stock Units credited to the Non-Employee Director’s Program Account immediately
prior to such dividend or distribution, divided by (iii) the Fair Market Value of a share of
Common Stock on the date of payment of such dividend or distribution. In the case of a cash
dividend or distribution, the “fair value” thereof shall be the amount of such cash, and, in
the case of any other dividend or distribution (other than in shares of Common Stock), the
“fair value” thereof shall be such amount as shall be determined in good faith by the
Administrator. Stock Units credited pursuant to the foregoing provisions of this Section
5.2 shall be subject to the

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same vesting, payment and other terms, conditions and restrictions as the original Stock
Units to which they relate. No adjustment shall be made pursuant to Section 7.1 of the Plan
as to Stock Units granted pursuant to the Program in connection with any dividend (other
than in shares of Common Stock) or distribution (other than in shares of Common Stock) for
which dividend equivalents are credited pursuant to the foregoing provisions of this Section
5.2. Stock Units granted pursuant to the Program shall otherwise be subject to adjustment
pursuant to Section 7.1 of the Plan (for example, and without limitation, in connection with
a split or reverse split of the outstanding Common Stock).

6. Vesting. Subject to Section 8 hereof and Section 7 of the Plan, a Stock Unit Award
granted to a Non-Employee Director pursuant to the Program (whether pursuant to Section 4 or
Section 5.2) shall vest and become payable as to 100% of the total number of Stock Units subject
thereto on the third anniversary of the date of grant of the Stock Unit Award.

7. Continuation of Services. The vesting schedule requires continued service through each
applicable vesting date as a condition to the vesting of the applicable installment of a Stock Unit
Award and the rights and benefits under the Program. Partial service, even if substantial, during
any vesting period will not entitle a Non-Employee Director to any proportionate vesting or avoid
or mitigate a termination of rights and benefits upon or following a termination of services as
provided in Section 8 below. Nothing contained in the Program constitutes a continued service
commitment by the Corporation, confers upon a Non-Employee Director any right to remain in service
to the Corporation, interferes with the right of the Corporation at any time to terminate such
service, or affects the right of the Corporation to increase or decrease a Non-Employee Director’s
other compensation.

8. Termination of Directorship. Subject to earlier termination pursuant to Section 7 of
the Plan, if a Non-Employee Director ceases to be a member of the Board for any reason, the
following rules shall apply with respect to any Stock Units granted to the Non-Employee Director
pursuant to Section 4 above (the last day that the Non-Employee Director is a member of the Board
is, except as otherwise provided below, referred to as the Non-Employee Director’s “Severance
Date”):

	 	•	 	other than as expressly provided below in this Section 8, (a) one-third (1/3) of the
number of Stock Units granted to the Non-Employee Director pursuant to the Program
within the period commencing twenty-four (24) months prior to, and ending twelve (12)
months prior to, the Non-Employee Director’s Severance Date shall immediately vest and
become payable; (b) two-thirds (2/3) of the number of Stock Units granted to the
Non-Employee Director pursuant to the Program within the period commencing thirty-six
(36) months prior to, and ending twenty-four (24) months prior to, the Non-Employee
Director’s Severance Date shall immediately vest and become payable; and (c) all Stock
Units granted to a Non-Employee Director pursuant to the Program that have not vested
as of, or do not vest upon, the Non-Employee Director’s Severance Date, shall
immediately terminate without payment therefor;
	 
	 	•	 	if the Non-Employee Director ceases to be a member of the Board due to his or her
death or Disability (as defined below), all Stock Units granted to the Non-

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	 	 	 	Employee Director pursuant to the Program shall immediately vest and become payable;
	 
	 	•	 	if the Non-Employee Director ceases to be a member of the Board due to his or her
Retirement (as defined below), all Stock Units subject to a Stock Unit Award granted to
the Non-Employee Director pursuant to the Program shall immediately vest and become
payable, provided that the Non-Employee Director has served as a member of the Board
for at least twelve (12) continuous months following the grant date of such Stock Unit
Award;
	 
	 	•	 	if the Non-Employee Director ceases to be a member of the Board due to his or her
Removal, all then-unvested Stock Units granted to the Non-Employee Director pursuant to
the Program shall immediately terminate without payment therefor.

     For purposes of this Section 8, the term “Disability” shall mean a period of disability during
which a Non-Employee Director qualified for permanent disability benefits under the Corporation’s
long-term disability plan, or, if the Non-Employee Director does not participate in such a plan, a
period of disability during which the Non-Employee Director would have qualified for permanent
disability benefits under such a plan had the Non-Employee Director been a participant in such a
plan, as determined in the sole discretion of the Administrator. If the Corporation does not
sponsor such a plan, or discontinues to sponsor such a plan, Disability shall be determined by the
Administrator in its sole discretion. For purposes of this Section 8, the term “Retirement” shall
mean the cessation of a director’s services as a member of the Board due to his or her voluntary
resignation at any time after such director has served as a member of the Board for at least
forty-eight (48) months. For purposes of this Section 8, the term “Removal” shall mean the removal
of a Non-Employee Director from the Board, with or without cause, in accordance with the
Corporation’s Certificate of Incorporation, Bylaws or the Delaware General Corporation Law.

     Notwithstanding any other provision of this Section 8, if a Non-Employee Director ceases to be
a member of the Board (regardless of the reason) but, immediately thereafter, is employed by the
Corporation or one of its Subsidiaries, such director’s Severance Date shall not be the date the
director ceases to be a member of the Board but instead shall be the last day that the director is
either or both (1) a member of the Board and/or (2) employed by the Corporation or a Subsidiary.

9. Timing and Manner of Payment of Stock Units. Except as provided in Section 10 below, on
or within fifteen (15) business days following the vesting of any Stock Units granted to a
Non-Employee Director pursuant to the Program (whether pursuant to Section 6 or Section 8 hereof or
Section 7 of the Plan), the Corporation shall deliver to the Non-Employee Director 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, subject to adjustment
as provided in Section 7 of the Plan; provided, however, that, to the extent permitted by the
Corporation’s Amended and Restated Deferred Compensation Plan, as it may be amended from time to
time (the “Deferred Compensation Plan”), a Non-Employee Director may elect to

4

 

defer receipt of any or all shares of Common Stock payable with respect to Stock Units that vest
pursuant to the Program. Such elections shall be made, and any such deferral shall be effected and
administered, in accordance with the Deferred Compensation 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 Non-Employee Director (or other person entitled under the Plan to receive any
shares with respect to the vested Stock Units) deliver to the Corporation any representations or
other documents or assurances required pursuant to Section 8.1 of the Plan. A Non-Employee
Director shall have no further rights with respect to any Stock Units that are paid or that are
terminated pursuant to Section 8 hereof or Section 7 of the Plan, and such Stock Units shall be
removed from the Non-Employee Director’s Program Account upon the date of such payment or
termination.

10. Change in Control Events. A Stock Unit 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 the Program or the Plan,
if the event giving rise to such accelerated vesting is not also a “change in the ownership or
effective control” of the Corporation for purposes of Section 409A of the Code, then payment with
respect to such vested Stock Unit Award shall not be made until such Stock Unit Award would have
become vested and payable without regard to this Section 10 or Section 7 of the Plan.

11. Plan Provisions; Maximum Number of Shares; Amendment; Administration. Stock Units
granted under the Program shall otherwise be subject to the terms of the Plan (including, without
limitation, the provisions of Section 7 of the Plan). If Stock Unit Awards otherwise required
pursuant to the Program would otherwise exceed any applicable share limit under Section 4.2 of the
Plan, such grants shall be made pro-rata to Non-Employee Directors entitled to such grants. The
Board may from time to time amend the Program without stockholder approval; provided that no such
amendment shall materially and adversely affect the rights of a Non-Employee Director as to a Stock
Unit Award granted under the Program before the adoption of such amendment. The Board may amend,
modify, suspend or terminate outstanding Stock Unit Awards; provided, however, that outstanding
Stock Unit Awards shall not be amended, modified, suspended or terminated so as to impair any
rights of the recipient of the award without the consent of such recipient. If any such amendment
or modification to an outstanding Stock Unit Award has the result of accelerating the vesting of
such award, then any election that had been made to defer receipt of payment with respect to any or
all of the Stock Units subject to the award pursuant to the Deferred Compensation Plan shall be
disregarded. The Program does not limit the Board’s authority to make other, discretionary award
grants to Non-Employee Directors pursuant to the Plan. The Plan Administrator’s power and
authority to construe and interpret the Plan and awards thereunder pursuant to Section 3.1 of the
Plan shall extend to the Program and awards granted hereunder. As provided in Section 3.2 of the
Plan, any action taken by, or inaction of, the Administrator relating or pursuant to the Program
and within its authority or under applicable law shall be within the absolute discretion of that
entity or body and shall be conclusive and binding upon all persons.

###

As amended (Section 8) November 9, 2006

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As amended (Section 4.2) August 22, 2007

6

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