Document:

Exhibit 10.1.7

 

Exhibit 10.1.7

	 	 	 
	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 Long-Term Cash Award

and Long-Term Cash Award Agreement — Executives
	 	 

	 	 	 	 	 
	«fn» «mn» «ln»

	 	Award Number:
	 	«nbr»
	«ad1»

	 	Plan:
	 	2004 Performance Incentive Plan
	«ad2»

	 	ID:
	 	«id»

	«cty», «st» «z»
	 	 	 	 

Congratulations! Effective                     , 20                    , you have been granted a Long-Term Cash Award (a “Cash
Award”) of Western Digital Corporation. This Cash Award was granted under the 2004 Performance
Incentive Plan (the “Plan”).

Target Cash Award:      $                    .

Measurement Period covered by grant:                      to                     (“Measurement Period”).

Your Cash Award is subject to the terms and conditions of this Notice, the attached Standard Terms
and Conditions for Long-Term Cash Award – Executives (the “Standard Terms”) and the Plan. By
accepting the award, you are agreeing to the terms and provisions set forth in those documents. You
should read 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 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 Law Department.

Long-Term Cash Award (Executives) Sept. 2007

 

 

Western®

Digital

Western Digital Corporation     20511 Lake Forest Drive

Lake Forest, California 92630     Telephone 949 672-7000

STANDARD TERMS AND CONDITIONS FOR

LONG-TERM CASH AWARD — EXECUTIVES

1. Long-Term Cash Award Subject to 2004 Performance Incentive Plan

     The Long-Term Cash Award (the “Cash Award”) referred to in the attached Notice of Grant of
Long-Term Cash Award and Long-Term Cash Award Agreement – Executives (the “Notice”) is awarded
under the Western Digital Corporation (the “Corporation”) Amended and Restated 2004 Performance
Incentive Plan (the “Plan”). The Cash Award is subject to the terms and provisions of the Notice,
these Standard Terms and Conditions for Long-Term Cash Award — Executives (these “Standard Terms”),
and the Plan. To the extent any information in the Notice or other information provided by the
Corporation conflicts with the Plan and/or these Standard Terms, then 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. The Notice and these
Standard Terms, together, constitute the “Agreement” with respect to the Cash Award pursuant to
Section 5.3 of the Plan. The holder of the Cash Award is referred to herein as the “Participant.”
Capitalized terms not defined herein have the meanings set forth in the Plan.

2. Performance Goals

     The Compensation Committee of the Board of Directors of the Corporation (the “Committee”)
shall set one or more objective performance goals for Participant for the Measurement Period, in
accordance with Section 5.2 of the Plan (“Performance Goals”). Upon determination by the Committee
of the Performance Goals, the Performance Goals for the Measurement Period shall be attached as
Exhibit A hereto.

3. Determination and Payment of Cash Award Payment Amount

     Within a reasonable period of time following the end of the Measurement Period, the Committee
shall determine, in accordance with the Performance Goals and related criteria and methodology
established by the Committee described on Exhibit A hereto, the extent to which the
Performance Goals have been achieved and authorize the cash payment of an award, if any, to
Participant (the “Cash Award Payment Amount”). The Cash Award Payment Amount shall equal the dollar
amount of the Cash Award set forth on the Notice of Grant of Cash Performance Award (“Target Cash
Award”) multiplied by a percentage that shall be determined by the Committee in accordance with the
Performance Goals and related criteria and methodology described on Exhibit A hereto (the
“Cash Award Performance Percentage”), subject to adjustment as described in this Agreement. Subject
to Sections 5, 6 and 13 below, payment of the Cash Award Payment Amount shall be made to
Participant or, in the event of Participant’s death, to Participant’s legal representative, as soon
as practicable after the certification of awards by the Committee (but no later than seventy-four
days following completion of the Measurement Period), net of amounts withheld in satisfaction of
the requirements of Section 8(b) below. The Cash Award Performance Percentage and the Cash
Award Payment Amount are subject to adjustment (which may reduction) as provided in this
Agreement.

4. Termination at Payment of Cash Award

     Unless terminated earlier under Section 5 below, a Participant’s rights under this Agreement
with respect to the Cash Award awarded under this Agreement shall terminate at the time any Cash
Award Payment Amount is paid to Participant or at such time that the Cash Award is no longer
eligible to become paid, as determined by the Administrator or the Committee.

Long-Term Cash Award (Executives) Sept. 2007

2

 

5. Termination of Employment; Change in Control Events

     (a) Termination of Employment. Subject to Section 7.2 or 7.3 of the Plan and subject
to adjustment as provided in Section 6 hereof, if the Participant ceases to be employed by or to
provide services to the Corporation and its Subsidiaries (regardless of the reason for such
termination, whether with or without cause, voluntarily or involuntarily, or due to disability),
the Participant’s Cash Award and any right to receive a Cash Award Payment Amount shall terminate
to the extent a Cash Award Payment Amount has not yet been determined by the Committee as described
in Section 3, as of 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 pro-rata portion of the Cash
Award Payment Amount shall be paid (equal to the Cash Award Payment Amount that the Participant
would have been entitled to had he or she continued to be employed through the applicable payment
date, multiplied by a fraction the numerator of which is the number of days in the Measurement
Period that the Participant was employed by the Corporation or one of its Subsidiaries prior to the
Participant’s death and the denominator of which is the total number of days in the Measurement
Period) to the Participant’s legal representative at the same time as Cash Award Payment Amounts
are paid generally with respect to the Measurement Period. The Administrator shall be the sole
judge, for purposes of the Cash Award, as to whether the Participant continues to render services
the Corporation or its Subsidiaries and the date, if any, upon which such services shall be deemed
to have terminated.

     (b) Change in Control Events. Notwithstanding Section 5(a), upon the occurrence of a
Change in Control Event (as defined in Section 7.3 of the Plan), subject to Section 6 below and
Participant then being an Eligible Person (or having died during the Measurement Period while
employed by or providing services to the Corporation or any of its Subsidiaries), the Cash Award
Payment Amount, based on a Cash Award Performance Percentage of 100% (or such greater percentage as
the Committee, in its sole discretion, may deem appropriate in the circumstances, and subject to
pro-ration as provided in Section 5(a) in the event the Participant had died during the Measurement
Period and prior to the Change in Control Event), multiplied by the Target Cash Award shall become
payable hereunder to Participant. Such Cash Award Payment Amount (after giving effect to the
foregoing sentence) shall be paid, net of amounts withheld in satisfaction of the requirements of
Section 8(b) below, to Participant or, in the event of Participant’s death, to Participant’s legal
representative, as soon as practicable following (and in all events no more than seventy-four (74)
days after) the Change in Control Event; provided, however, that if the Participant has made a
deferral election with respect to such payment pursuant to Section 13(a) that is then in effect,
such payment shall be made in accordance with the terms of the Corporation’s Amended and Restated
Deferred Compensation Plan.

6. Adjustments; Performance-Based Compensation

     (a) Adjustments. In determining the Cash Award Performance Percentage and the Cash
Award Payment Amount with respect to the Measurement Period, the Committee may adjust the
Performance Goals previously determined by the Committee to the extent permitted pursuant to
Section 5.2.2 of the Plan.

     (b) Reduction of Cash Award Payment Amount. Notwithstanding Section 3 or any other
term of this Agreement, the Committee may in its sole and absolute discretion reduce the Cash Award
Payment Amount, if the Committee determines that such reduction is necessary or advisable due to
current business conditions or for any other reason, including the Committee’s judgment that the
Performance Goals have become an inappropriate measure of achievement, a change in the employment
status, position or duties of the Participant, unsatisfactory performance of the Participant, or
based on the Participant’s services and contributions for the Measurement Period.

     (c) Performance-Based Compensation. Cash Awards are intended to be Performance-Based
Awards based on Business Criteria, as described in Section 5.2 of the Plan. Compensation
attributable to the Agreement is intended to constitute qualified performance-based compensation
under Section 162(m) of the Code and the regulations thereunder. This Agreement shall be construed
and administered by the Committee in a manner consistent with this intent.

Long-Term Cash Award (Executives) Sept. 2007

3

 

7. Acknowledgment of Nature of Plan and Cash Awards

In accepting the Cash Award, Participant acknowledges that:

     (a) the Plan is established voluntarily by the Corporation, it is discretionary in nature and
may be modified, amended, suspended or terminated by the Corporation at any time, as provided in
the Plan;

     (b) the Award of this Cash Award is voluntary and occasional and does not create any
contractual or other right to receive future awards of Cash Awards, or benefits in lieu of Cash
Awards even if Cash Awards have been awarded repeatedly in the past;

     (c) all decisions with respect to future awards, if any, will be at the sole discretion of the
Corporation; and

     (d) Participant’s participation in the Plan is voluntary.

8. Taxes

     (a) Responsibility for Tax-Related Items. Regardless of any action the Corporation or
Participant’s actual employer takes with respect to any or all income tax (including federal, state
and local taxes), social insurance, payroll tax or other tax-related withholding (“Tax Related
Items”), Participant acknowledges that the ultimate liability for all Tax Related Items legally due
by Participant is and remains Participant’s responsibility and that the Corporation and/or the
Participant’s actual employer (i) make no representations or undertakings regarding the treatment
of any Tax Related Items in connection with any aspect of the Cash Award, including the grant of
the Cash Award, the determination of the Cash Award Payment Amount or the payment of the Cash Award
Payment Amount; and (ii) do not commit to structure the terms of the grant or any aspect of the
Cash Award to reduce or eliminate the Participant’s liability for Tax Related Items.

     (b) Withholding Taxes. The Corporation (or any of its Subsidiaries last employing the
Participant) shall be entitled to withhold from any Cash Award Payment Amount an amount necessary
to satisfy any withholding obligations of the Corporation or any Subsidiary with respect to such
payment.

9. Nontransferability

     Prior to the time that a Cash Award Payment Amount is paid to Participant, no Cash Award or
right to receive a Cash Award Payment Amount, any interest therein, nor any amount payable in
respect thereof, may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or
encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding
sentence shall not apply to (a) transfers to the Corporation, or (b) subject to Section 5(a),
transfers by will or the laws of descent and distribution.

10. No Right to Employment

     Nothing contained in this 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.

11. Arbitration

     Any controversy arising out of or relating to this 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 Cash 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

Long-Term Cash Award (Executives) Sept. 2007

4

 

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 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 Cash Award, the Participant consents to all of the terms and conditions of this
Agreement (including, without limitation, this Section 11).

12. Governing Law

     This 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.

13. Deferrals; Construction

     (a) To the extent permitted under the Corporation’s Amended and Restated Deferred Compensation
Plan, as amended from time to time, Participant may elect to defer receipt of any or all Cash Award
Payment Amounts due hereunder. Such election shall be made, and any such deferral shall be effected
and administered, in accordance with the Deferred Compensation Plan.

     (b) This Agreement shall be construed and interpreted to comply with Section 409A of the Code
and regulations or other guidance promulgated thereunder (“Section 409A”). The Corporation reserves
the right to amend this Agreement to the extent it reasonably determines is necessary in order to
preserve the intended tax consequences of the Cash Award in light of Section 409A.

14. Severability

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

15. Entire Agreement

     This 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 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.

Long-Term Cash Award (Executives) Sept. 2007

5

 

16. Section Headings

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

Long-Term Cash Award (Executives) Sept. 2007

6

 

EXHIBIT A

LONG-TERM CASH AWARD — EXECUTIVES

Performance Goals

[Performance Goals shall be expressed in terms of one or more of the following corporate measures
(or such other measures that may be defined as “Business Criteria” pursuant to the Plan): earnings
per share, cash flow (which means cash and cash equivalents derived from either net cash flow from
operations or net cash flow from operations, financing and investing activities), total stockholder
return, gross revenue, revenue growth, operating income (before or after taxes), net earnings
(before or after interest, taxes, depreciation and/or amortization), return on equity or on assets
or on net investment, cost containment or reduction, or any combination thereof. Each such
Performance Goal may be expressed on an absolute and/or relative basis, may employ comparisons with
past performance of the Corporation (including one or more divisions) and/or the current or past
performance of other companies, and in the case of earnings-based measures, may employ comparisons
to capital, stockholders’ equity and shares outstanding.]

Long-Term Cash Award (Executives) Sept. 2007

A-1Exhibit 10.1.8

 

Exhibit 10.1.8

	 	 	 
	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 Long-Term Cash Award
	 	 
	and Long-Term Cash Award Agreement — Employees
	 	 

	 	 	 	 	 
	«fn» «mn» «ln»

	 	Award Number:
	 	«nbr»
	«ad1»

	 	Plan:
	 	2004 Performance Incentive Plan
	«ad2»

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

Congratulations! Effective                     , 20     , you have been granted a Long-Term Cash Award (a “Cash
Award”) of Western Digital Corporation. This Cash Award was granted under the 2004 Performance
Incentive Plan (the “Plan”).

Target Cash Award:      $                    .

Measurement Period covered by grant:                      to                      (“Measurement Period”).

Your Cash Award is subject to the terms and conditions of this Notice, the attached Standard Terms
and Conditions for Long-Term Cash Award – Employees (the “Standard Terms”) and the Plan. By
accepting the award, you are agreeing to the terms and provisions set forth in those documents. You
should read 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 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 Law Department.

Long-Term Cash Award (Employees) Sept. 2007

 

 

Western®

Digital

Western Digital Corporation      20511 Lake Forest Drive

Lake Forest, California 92630      Telephone 949 672-7000

STANDARD TERMS AND CONDITIONS FOR

LONG-TERM CASH AWARD — EMPLOYEES

1. Long-Term Cash Award Subject to 2004 Performance Incentive Plan

     The Long-Term Cash Award (the “Cash Award”) referred to in the attached Notice of Grant of
Long-Term Cash Award and Long-Term Cash Award Agreement – Employees (the “Notice”) is awarded under
the Western Digital Corporation (the “Corporation”) Amended and Restated 2004 Performance Incentive
Plan (the “Plan”). The Cash Award is subject to the terms and provisions of the Notice, these
Standard Terms and Conditions for Long-Term Cash Award — Employees (these “Standard Terms”), and
the Plan. To the extent any information in the Notice or other information provided by the
Corporation conflicts with the Plan and/or these Standard Terms, then 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. The Notice and these
Standard Terms, together, constitute the “Agreement” with respect to the Cash Award pursuant to
Section 5.3 of the Plan. The holder of the Cash Award is referred to herein as the “Participant.”
Capitalized terms not defined herein have the meanings set forth in the Plan.

2. Performance Goals

     The Compensation Committee of the Board of Directors of the Corporation (the “Committee”)
shall set one or more objective performance goals for Participant for the Measurement Period, in
accordance with Section 5.2 of the Plan (“Performance Goals”). Upon determination by the Committee
of the Performance Goals, the Performance Goals for the Measurement Period shall be attached as
Exhibit A hereto.

3. Determination and Payment of Cash Award Payment Amount

     Within a reasonable period of time following the end of the Measurement Period, the Committee
shall determine, in accordance with the Performance Goals and related criteria and methodology
established by the Committee described on Exhibit A hereto, the extent to which the
Performance Goals have been achieved and authorize the cash payment of an award, if any, to
Participant (the “Cash Award Payment Amount”). The Cash Award Payment Amount shall equal the dollar
amount of the Cash Award set forth on the Notice of Grant of Cash Performance Award (“Target Cash
Award”) multiplied by a percentage that shall be determined by the Committee in accordance with the
Performance Goals and related criteria and methodology described on Exhibit A hereto (the
“Cash Award Performance Percentage”), subject to adjustment as described in this Agreement. Subject
to Sections 5, 6 and 13 below, payment of the Cash Award Payment Amount shall be made to
Participant or, in the event of Participant’s death, to Participant’s legal representative, as soon
as practicable after the certification of awards by the Committee (but no later than seventy-four
days following completion of the Measurement Period), net of amounts withheld in satisfaction of
the requirements of Section 8(b) below. The Cash Award Performance Percentage and the Cash
Award Payment Amount are subject to adjustment (which may reduction) as provided in this
Agreement.

4. Termination at Payment of Cash Award

     Unless terminated earlier under Section 5 below, a Participant’s rights under this Agreement
with respect to the Cash Award awarded under this Agreement shall terminate at the time any Cash
Award Payment Amount is paid to Participant or at such time that the Cash Award is no longer
eligible to become paid, as determined by the Administrator or the Committee.

Long-Term Cash Award (Employees) Sept. 2007

2

 

5. Termination of Employment; Change in Control Events

     Subject to Section 7.2 or 7.3 of the Plan and subject to adjustment as provided in Section 6
hereof, if the Participant ceases to be employed by or to provide services to the Corporation and
its Subsidiaries (regardless of the reason for such termination, whether with or without cause,
voluntarily or involuntarily, or due to disability), the Participant’s Cash Award and any right to
receive a Cash Award Payment Amount shall terminate to the extent a Cash Award Payment Amount has
not yet been determined by the Committee as described in Section 3, as of 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 pro-rata portion of the Cash Award Payment Amount shall
be paid (equal to the Cash Award Payment Amount that the Participant would have been entitled to
had he or she continued to be employed through the applicable payment date, multiplied by a
fraction the numerator of which is the number of days in the Measurement Period that the
Participant was employed by the Corporation or one of its Subsidiaries prior to the Participant’s
death and the denominator of which is the total number of days in the Measurement Period) to the
Participant’s legal representative at the same time as Cash Award Payment Amounts are paid
generally with respect to the Measurement Period. The Administrator shall be the sole judge, for
purposes of the Cash Award, as to whether the Participant continues to render services the
Corporation or its Subsidiaries and the date, if any, upon which such services shall be deemed to
have terminated.

6. Adjustments; Performance-Based Compensation

     (a) Adjustments. In determining the Cash Award Performance Percentage and the Cash
Award Payment Amount with respect to the Measurement Period, the Committee may adjust the
Performance Goals previously determined by the Committee to the extent permitted pursuant to
Section 5.2.2 of the Plan.

     (b) Reduction of Cash Award Payment Amount. Notwithstanding Section 3 or any other
term of this Agreement, the Committee may in its sole and absolute discretion reduce the Cash Award
Payment Amount, if the Committee determines that such reduction is necessary or advisable due to
current business conditions or for any other reason, including the Committee’s judgment that the
Performance Goals have become an inappropriate measure of achievement, a change in the employment
status, position or duties of the Participant, unsatisfactory performance of the Participant, or
based on the Participant’s services and contributions for the Measurement Period.

     (c) Performance-Based Compensation. Cash Awards are intended to be Performance-Based
Awards based on Business Criteria, as described in Section 5.2 of the Plan. Compensation
attributable to the Agreement is intended to constitute qualified performance-based compensation
under Section 162(m) of the Code and the regulations thereunder. This Agreement shall be construed
and administered by the Committee in a manner consistent with this intent.

7. Acknowledgment of Nature of Plan and Cash Awards

In accepting the Cash Award, Participant acknowledges that:

     (a) the Plan is established voluntarily by the Corporation, it is discretionary in nature and
may be modified, amended, suspended or terminated by the Corporation at any time, as provided in
the Plan;

     (b) the Award of this Cash Award is voluntary and occasional and does not create any
contractual or other right to receive future awards of Cash Awards, or benefits in lieu of Cash
Awards even if Cash Awards have been awarded repeatedly in the past;

     (c) all decisions with respect to future awards, if any, will be at the sole discretion of the
Corporation; and

     (d) Participant’s participation in the Plan is voluntary.

Long-Term Cash Award (Employees) Sept. 2007

3

 

8. Taxes

     (a) Responsibility for Tax-Related Items. Regardless of any action the Corporation or
Participant’s actual employer takes with respect to any or all income tax (including federal, state
and local taxes), social insurance, payroll tax or other tax-related withholding (“Tax Related
Items”), Participant acknowledges that the ultimate liability for all Tax Related Items legally due
by Participant is and remains Participant’s responsibility and that the Corporation and/or the
Participant’s actual employer (i) make no representations or undertakings regarding the treatment
of any Tax Related Items in connection with any aspect of the Cash Award, including the grant of
the Cash Award, the determination of the Cash Award Payment Amount or the payment of the Cash Award
Payment Amount; and (ii) do not commit to structure the terms of the grant or any aspect of the
Cash Award to reduce or eliminate the Participant’s liability for Tax Related Items.

     (b) Withholding Taxes. The Corporation (or any of its Subsidiaries last employing the
Participant) shall be entitled to withhold from any Cash Award Payment Amount an amount necessary
to satisfy any withholding obligations of the Corporation or any Subsidiary with respect to such
payment.

9. Nontransferability

     Prior to the time that a Cash Award Payment Amount is paid to Participant, no Cash Award or
right to receive a Cash Award Payment Amount, any interest therein, nor any amount payable in
respect thereof, may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or
encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding
sentence shall not apply to (a) transfers to the Corporation, or (b) subject to Section 5,
transfers by will or the laws of descent and distribution.

10. No Right to Employment

     Nothing contained in this 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.

11. Arbitration

     Any controversy arising out of or relating to this 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 Cash 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 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

Long-Term Cash Award (Employees) Sept. 2007

4

 

accepting the Cash Award, the Participant consents to all of the terms and conditions of this
Agreement (including, without limitation, this Section 11).

12. Governing Law

     This 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.

13. Deferrals; Construction

     (a) To the extent permitted under the Corporation’s Amended and Restated Deferred Compensation
Plan, as amended from time to time, Participant may elect to defer receipt of any or all Cash Award
Payment Amounts due hereunder. Such election shall be made, and any such deferral shall be effected
and administered, in accordance with the Deferred Compensation Plan.

     (b) This Agreement shall be construed and interpreted to comply with Section 409A of the Code
and regulations or other guidance promulgated thereunder (“Section 409A”). The Corporation reserves
the right to amend this Agreement to the extent it reasonably determines is necessary in order to
preserve the intended tax consequences of the Cash Award in light of Section 409A.

14. Severability

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

15. Entire Agreement

     This 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 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.

16. Section Headings

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

Long-Term Cash Award (Employees) Sept. 2007

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EXHIBIT A

LONG-TERM CASH AWARD — EMPLOYEES

Performance Goals

[Performance Goals shall be expressed in terms of one or more of the following corporate measures
(or such other measures that may be defined as “Business Criteria” pursuant to the Plan): earnings
per share, cash flow (which means cash and cash equivalents derived from either net cash flow from
operations or net cash flow from operations, financing and investing activities), total stockholder
return, gross revenue, revenue growth, operating income (before or after taxes), net earnings
(before or after interest, taxes, depreciation and/or amortization), return on equity or on assets
or on net investment, cost containment or reduction, or any combination thereof. Each such
Performance Goal may be expressed on an absolute and/or relative basis, may employ comparisons with
past performance of the Corporation (including one or more divisions) and/or the current or past
performance of other companies, and in the case of earnings-based measures, may employ comparisons
to capital, stockholders’ equity and shares outstanding.]

Long-Term Cash Award (Employees) Sept. 2007

A-1

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