Document:

exv10w3

 

Exhibit 10.3

Western Digital Corporation

Summary of Compensation Arrangements

for

Named Executive Officers and Directors

Named Executive Officers

This summary sheet reports current base salaries and certain other compensation for (1) the current
executive officers of Western Digital Corporation (the “Company”) who were named in the Summary
Compensation Table in the Company’s Proxy Statement filed October 4, 2005 with the Securities and
Exchange Commission (the “Named Executive Officers”) and (2) the Company’s current Chief Operations
Officer who is not presently one of the Named Executive Officers.

	 	 	 	 	 
	Named Executive Officer	 	Current Base Salary
	Matthew E. Massengill*
	 	$	800,000	 
	Chairman of the Board
	 	 	 	 
	 
	 	 	 	 
	Arif Shakeel*
	 	$	800,000	 
	President and Chief
Executive Officer
	 	 	 	 
	 
	 	 	 	 
	John F. Coyne**
	 	$	600,000	 
	Executive Vice President and
Chief Operations Officer
	 	 	 	 
	 
	 	 	 	 
	Stephen D. Milligan
	 	$	400,000	 
	Senior Vice President and
Chief Financial Officer
	 	 	 	 
	 
	 	 	 	 
	Hossein Moghadam
	 	$	400,000	 
	Senior Vice President
and Chief Technology Officer
	 	 	 	 
	 
	 	 	 	 
	Raymond M. Bukaty
	 	$	400,000	 
	Senior Vice President,
Administration, General
Counsel and Secretary
	 	 	 	 

 

			
	*	 	On August 25, 2005, the Company entered into employment agreements
with Mr. Massengill and Mr. Shakeel, effective October 1, 2005, as
disclosed in Item 1.01 of the Company’s current report on Form 8-K,
filed with the Securities and Exchange Commission on August 26, 2005,
which is incorporated herein by reference.
	 
	**	 	On May 25, 2005, prior to
Mr. Coyne’s appointment as Executive Vice President and Chief
Operations Officer, the Company entered into a letter agreement with
him, as disclosed in Item 5.02 of the Company’s current report on Form
8-K, filed with the Securities and Exchange Commission on November 23,
2005, which is incorporated herein by reference.

     The Named Executive Officers and Mr. Coyne are eligible to receive cash bonus awards as
disclosed in Item 1.01 of the Company’s Current Report on Form 8-K, filed with the Securities and
Exchange Commission on November 23, 2005, which is incorporated herein by reference.

 

 

     The Named Executive Officers and Mr. Coyne are entitled to participate in various Company
plans as set forth in the exhibits to the Company’s filings with the Securities and Exchange
Commission.

     In addition, the Named Executive Officers and Mr. Coyne may be eligible to receive perquisites
and other personal benefits as disclosed in the Company’s Proxy Statement.

Directors

     The Company’s non-employee directors currently receive an annual retainer of $40,000 in
January, or if they join the Company’s Board of Directors (the “Board”) at a later date, they
receive a proportion of the annual fee corresponding to the period for which they serve. The
non-employee directors also currently receive compensation of $2,500 for each session during which
they attend a Board meeting, $1,500 for any and all committee meetings attended, $1,250 for each
Board meeting and $750 for each committee meeting held by telephone conference, and reimbursement
of reasonable out-of-pocket expenses incurred in attending each meeting. In addition, the chairman
of each committee of the Board receives an annual retainer of $5,000.

     Effective January 1, 2006, the Company’s non-employee directors will receive an annual
retainer of $75,000 in January, or if they join the Board at a
later date, they receive a proportion of the annual fee corresponding to the period for which they
serve. Also effective January 1, 2006, the chairman of the audit committee of the Board will
receive an annual retainer of $10,000 and the chairman of each of the
Governance Committee and the Compensation Committee will
receive an annual retainer of $5,000. All audit committee members, including the chairman, will
receive an annual retainer of $5,000. Non-employee directors will continue to be reimbursed for
reasonable out-of-pocket expenses incurred in attending Board and committee meetings, but directors
will not receive separate payments for attendance at Board and committee meetings.

     Mr. Massengill and Mr. Shakeel, who are employees of the Company, do not receive any
compensation for their service on the Board or any Board committee.

     At a Board meeting held on August 5, 2005, the Board approved the payment of $2,500 per day
(or time aggregating a full work day) for time spent by any independent director outside of board
or committee meetings assisting with specified succession planning matters.

     The Company’s non-employee directors are entitled to participate in various other Company
plans as set forth in the exhibits to the Company’s filings with the Securities and Exchange
Commission.

 -2-exv10w4

 

Exhibit 10.4

Western Digital Technologies, Inc.

20511 Lake Forest Drive

Lake Forest, California 92630

Raymond
M. Bukaty

Senior Vice President, Administration,

General Counsel & Secretary

May 25, 2005

Mr. John F. Coyne

20511 Lake Forest Drive

Lake Forest, CA 92630

Dear John:

Please consider this letter confirmation of Western Digital Technologies, Inc.’s (the “Company” or
“Western Digital”) intentions concerning your relocation to the United States from Kuala Lumpur,
Malaysia. These terms are in accordance with the “Expatriate Policy Guide” in force at the time of
your assignment.

Commencing July 2, 2005, you will be promoted to the position of Executive Vice President,
Worldwide Operations, grade 77, in Lake Forest, CA. This position will report to Arif Shakeel,
President and Chief Operating Officer.

Please note that the Company must disclose certain information about its executive officers in
periodic filings with various governing and regulatory agencies (e.g. SEC, State of Delaware, State
of California, NYSE, etc.). Therefore, while you are an executive officer, the Company will require
that you complete questionnaires from time-to-time so that the Company can accurately disclose this
information.

Effective
July 2, 2005, your compensation will be at an annualized base salary of $450,000 paid on a
bi-weekly basis. Your benefits elections under the Beneflex Plan will remain unchanged. You agree
you will transition your residence from Malaysia to the United States, close to the corporate
headquarters in Lake Forest, California, no later than January 2006. Per the Expatriate Policy
Guide in force at the time of your assignment, you will receive a relocation allowance in the
amount of $37,500 within 45 days of your return to the United States. This payment is considered a
bonus and is intended to help you set up your home back in the United States to cover such expenses
as cleaning, painting, new carpet, utility transfers, and other such miscellaneous expenses you
might incur.

You will continue to be eligible to participate in the FY’05 and FY’06 Incentive Compensation Plan
(ICP) commensurate with your position within the organization. As an

 

 

John F. Coyne

5/25/2005

2

Executive Vice President, your potential ICP payment target is 75% of your base salary. Your
participation will continue to be based on your individual accomplishments and contingent upon
approval by the Company’s Compensation Committee.

Contingent on approval by the Compensation Committee of the Board of Directors and subject to the
terms and conditions of the Western Digital Corporation Amended and Restated 2004 Performance
Incentive Plan, you will also receive (i) a Restricted Stock Award of 40,000 shares with a three
year vesting schedule of 33-1/3% per year, (ii) a Transition Restricted Stock Award of 30,000
shares with a two year vesting schedule of 50% per year, and (iii) a Performance Share Award of
40,000 shares with a three year vesting schedule of 0% vesting years one and two and 100% vesting
year three. You will receive information further explaining the Performance Share Award at a later
date.

Outstanding Personal Balances

You must take care of any miscellaneous outstanding balances that you may have incurred as a
result of your assignment. These may include but are not limited to: medical payments made on your
behalf by Western Digital; American Club or equivalent charges; and resident move-out charges. This
also applies to any unpaid tax equalization settlements due to the Company. Western Digital will
pay up to U.S. $1,000 in move-out charges.

Return Travel Expenses

You will be reimbursed for specific en route expenses incurred while returning from your
international assignment for up to a maximum of seven days. Western Digital will pay the following:

	 	•	 	Airfare for you according to Western Digital’s Corporate Travel Policy.
	 
	 	•	 	Hotel (room and tax only).
	 
	 	•	 	$350.00 (net) return travel allowance to cover miscellaneous expenses including but
not limited to: meals; laundry; baggage handling; reasonable excess baggage; taxi;
airport transfer expenses; gratuities; and customs and duties upon initial entry into
the United States.

Travel arrangements must be made through Western Digital’s Travel Department.

Cultural Re-Orientation

You may participate in a Cultural Re-Orientation Program provided by Family Guidance International,
Inc. (FGI). The purpose of this program will be to learn what you may expect upon returning to the
United States. The program may also be customized to meet your individual needs. This program is
made available to assist you in a successful relocation. If you wish to take advantage of this
benefit, please contact Roseann Schaefer at the Company.

 

 

John F. Coyne

5/25/2005

3

Temporary Living Expenses & Auto Rental

Temporary lodging will be provided to you by the Company for up to 30 days. Auto rental of a
mid-size car will be provided to you for a maximum of 30 days upon your return to the United
States. You will also receive a temporary living allowance of $2,750 for the duration of temporary
living between 1 and 30 days, and, if necessary, one additional temporary living allowance of
$2,750 for stays over 31 days to cover miscellaneous expenses during your temporary living stay.

The first $2,750 allowance will be paid within 30 days of your arrival and is considered taxable
income to you. The second payment, if necessary, will be paid within the second 30 days of your
stay and is also considered taxable income to you.

Return Shipment of Household Goods & Storage

You will be limited to 10,000 pounds surface shipment of household goods and up to 1,000 pounds air
shipment. Coverage includes packing, shipping, customs duties, approved interim storage for up to
90 days, delivery and insurance coverage against loss or damage. Please refer to the document
regarding Return Shipment of Household Goods and Storage, a copy of which is delivered with this
letter, for additional details.

Tax Assistance

Because your international assignment has carried over into 2005, Western Digital will authorize
Ernst and Young to prepare your 2005 tax return and the Company will cover any Malaysian taxes that
you have incurred prior to July 2, 2005, and you will be responsible for Malaysian and any other
applicable income taxes with respect to income earned on or after July 2, 2005.

Please be advised that it may take twelve to eighteen months to complete tax settlements. If you
voluntarily terminate your employment with Western Digital, you will be responsible for all tax
filings (U.S. and international) for the year of termination. If Western Digital terminates your
employment prior to completing your 2005 tax settlement, the Company will pay for your tax
preparation services and cover any Malaysian taxes that you have incurred prior to July 2, 2005.

Shortly after your return to the United States you must contact Ernst & Young LLP in Los Angeles,
CA. The purpose of this meeting will be to review your tax situation and to take the necessary
steps to transition you from your international assignment tax pattern to a domestic withholding
pattern.

Acceptance of Agreement

By signing this letter agreement, you understand that the relocation benefits offered to you, as
specified in this letter agreement, constitute all of the benefits for which you are eligible

 

 

John F. Coyne

5/25/2005

4

to receive and supersedes any prior understanding or agreement between you and Western
Digital regarding the subject matter hereof. Exceptions to such relocation benefits must be made
in writing and are subject to all necessary approvals.

You further understand and agree that nothing in this letter agreement is intended to create a
contract of, or guarantee of, employment by Western Digital, or to modify in any respect, Western
Digital’s “at will” employment policy.

Please sign and return to Western Digital one copy of this letter as your acceptance of the terms
and conditions outlined in this letter and the document regarding Return Shipment of Household
Goods and Storage, a copy of which is delivered with this letter. If there is a conflict between
the terms and conditions specified herein and the terms and conditions specified in the
“Expatriate Policy Guide,” the terms and conditions herein shall govern.

Sincerely,

	 	 	 	 	 	 	 	 
	/s/ Raymond M. Bukaty

	 	5-25-05
	 	/s/ John F. Coyne
	 	25 MAY 2005	 
	 

	 	 	 	 	 	 	 
	Raymond M. Bukaty

	 	Date	 	John F. Coyne
	 	Date	 
	Senior Vice President, Administration,
	 	 	 	 	 	 	 
	General Counsel & Secretary

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