Document:

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                                                                  EXHIBIT 10.4.2

                               KOMAG, INCORPORATED

                           DEFERRED COMPENSATION PLAN

                            (Effective July 17, 2002)

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                               TABLE OF CONTENTS

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SECTION 1 DEFINITIONS........................................................1

        1.1    "Affiliate"...................................................1
        1.2    "Beneficiary".................................................1
        1.3    "Board of Directors"..........................................1
        1.4    "Change of Control"...........................................1
        1.5    "Code"........................................................2
        1.6    "Committee"...................................................2
        1.7    "Company".....................................................2
        1.8    "Compensation"................................................2
        1.9    "Compensation Deferrals"......................................2
        1.10   "Disability" or "Disabled"....................................2
        1.11   "Eligible Employee"...........................................2
        1.12   "ERISA".......................................................2
        1.13   "Financial Hardship"..........................................3
        1.14   "Participant".................................................3
        1.15   "Participant's Account" or "Account"..........................3
        1.16   "Plan"........................................................3
        1.17   "Plan Year"...................................................3
        1.18   "Restricted Stock"............................................3

SECTION 2 PARTICIPATION......................................................3

        2.1    Participation.................................................3
        2.2    Automatic Suspension of Compensation Deferrals................4
        2.3    Termination of Participation..................................4

SECTION 3 COMPENSATION DEFERRAL ELECTIONS....................................4

        3.1    Compensation Deferrals........................................4
        3.2    Crediting and Vesting of Compensation Deferrals...............4
        3.3    Deemed Investment Return on Accounts..........................4
        3.4    Form of Payment...............................................5
        3.5    Term of Deferral..............................................5
        3.6    Changes in Elections as to Term and Form for Payment..........5

SECTION 4 ACCOUNTING.........................................................5

        4.1    Participants' Accounts........................................5
        4.2    Participants Remain Unsecured Creditors.......................5
        4.3    Accounting Methods............................................5
        4.4    Reports.......................................................6

SECTION 5 DISTRIBUTIONS......................................................6

        5.1    Normal Time for Distribution..................................6
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                               TABLE OF CONTENTS
                                  (CONTINUED)

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        5.2    Change of Control.............................................6
        5.3    Special Rule for Death or Disability..........................6
        5.4    Special Rule re Deductibility.................................6
        5.5    Beneficiary Designations......................................7
        5.6    Unscheduled Withdrawals.......................................7
        5.7    Financial Hardship............................................8
        5.8    Payments to Incompetents......................................8
        5.9    Undistributable Accounts......................................8
        5.10   Committee Discretion..........................................8

SECTION 6 PARTICIPANT'S INTEREST IN ACCOUNT..................................9

        6.1    Compensation Deferral Contributions...........................9

SECTION 7 ADMINISTRATION OF THE PLAN.........................................9

        7.1    Plan Administrator............................................9
        7.2    Committee.....................................................9
        7.3    Actions by Committee..........................................9
        7.4    Powers of Committee...........................................9
        7.5    Decisions of Committee.......................................10
        7.6    Administrative Expenses......................................10
        7.7    Eligibility to Participate...................................10
        7.8    Indemnification..............................................11

SECTION 8 FUNDING...........................................................11

        8.1    Unfunded Plan................................................11

SECTION 9 MODIFICATION OR TERMINATION OF PLAN...............................11

        9.1    Company's Obligations Limited................................11
        9.2    Right to Amend or Terminate..................................11
        9.3    Effect of Termination........................................11

SECTION 10 GENERAL..........................................................12

        10.1   Inalienability...............................................12
        10.2   Rights and Duties............................................12
        10.3   No Enlargement of Rights.....................................12
        10.4   Compliance with Rule 16b-3...................................12
        10.5   Compensation Deferrals Not Counted Under Other Employee
               Benefit Plans................................................12
        10.6   Applicable Law...............................................12
        10.7   Severability.................................................12
        10.8   Captions.....................................................12
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                               KOMAG, INCORPORATED

                           DEFERRED COMPENSATION PLAN

                            (Effective July 17, 2002)

        KOMAG, INCORPORATED, a Delaware corporation, hereby establishes the
Komag Deferred Compensation Plan, effective July 17, 2002, for the benefit of a
select group of management and highly compensated employees of the Company and
its participating Affiliates, in order to provide such employees with certain
deferred compensation benefits. The Plan is an unfunded deferred compensation
plan that is intended to qualify for the exemptions provided in Sections 201,
301, and 401 of ERISA.

                                    SECTION 1

                                   DEFINITIONS

        The following words and phrases shall have the following meanings unless
a different meaning is plainly required by the context:

        1.1 "AFFILIATE" shall mean (a) the Company, and (b) each corporation,
trade or business which is, together with the Company, a member of a controlled
group of corporations or an affiliated service group or under common control
(within the meaning of Section 414(b), (c) or (m) of the Code), but only for the
period during which such other entity is so affiliated with the Company.

        1.2 "BENEFICIARY" shall mean the person or persons entitled to receive
the balance credited to a Participant's Account under the Plan upon the death of
a Participant, as provided in Section 5.4.

        1.3 "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.

        1.4 "CHANGE OF CONTROL" shall mean the occurrence of any of the
following events:

            (a) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Securities and Exchange Act of 1934, as amended), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company's then outstanding voting securities; or

            (b) The consummation of the sale or disposition by the Company of
all or substantially all of the Company's assets;

            (c) A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent

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Directors" means directors who either (A) are Directors as of the effective
date of the Plan, or (B) are elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination (but will not include an individual
whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company); or

            (d) The consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or its parent) at least
fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.

        1.5 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.

        1.6 "COMMITTEE" shall mean the committee appointed by (and serving at
the pleasure of) the Board of Directors to administer the Plan. As of the
effective date of the Plan, the members of the Committee shall be the Company's
Chief Executive Officer and Chief Financial Officer.

        1.7 "COMPANY" shall mean Komag, Incorporated, a Delaware corporation.

        1.8 "COMPENSATION" shall mean the fair market value of any grants of
Restricted Stock that a Participant chooses to defer under the Plan. The
Committee shall determine the fair market value of the Restricted Stock on the
date a Participant would have received the Restricted Stock had he or she not
elected to participate in the Plan. A Participant's Compensation shall not
include any other type of remuneration.

        1.9 "COMPENSATION DEFERRALS" shall mean the amounts credited to
Participants' Accounts under the Plan pursuant to their deferral elections made
in accordance with Section 2.1.

        1.10 "DISABILITY" or "DISABLED" shall mean the mental or physical
inability of a Participant to perform the regularly assigned duties of his or
her employment, provided that such inability (a) has continued or is expected to
continue for a period of at least 6 months and (b) is evidenced by the
certificate of a physician satisfactory to the Committee stating that such
inability exists and is likely to be permanent.

        1.11 "ELIGIBLE EMPLOYEE" shall mean an employee of the Company who holds
office at the level of director or above. Notwithstanding the preceding, the
Board of Directors, in its sole discretion, may (a) change the required title
for purposes of determining eligibility for the Plan, and (b) determine that one
or more otherwise eligible employees of the Company shall not be Eligible
Employees.

        1.12 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended. Reference to a specific section of ERISA shall include such
section, any valid regulation

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promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.

        1.13 "FINANCIAL HARDSHIP" shall mean a severe financial emergency which
is caused by a sudden and unexpected accident, illness or other event beyond the
control of the Participant which, absent a suspension of deferrals under Section
2.2 or accelerated distribution under Section 5.7, would result in severe
financial burden to the Participant or a member of his or her immediate family.
A Financial Hardship does not exist to the extent that the hardship may be
relieved by (a) reimbursement or compensation by insurance, (b) by liquidation
of the Participant's other assets (to the extent such liquidation would not
itself cause severe financial hardship), or (c) any loan available to the
Participant (to the extent the payments on such loan would not themselves cause
severe financial hardship).

        1.14 "PARTICIPANT" shall mean an Eligible Employee who (a) has become a
Participant in the Plan pursuant to Section 2.1.

        1.15 "PARTICIPANT'S ACCOUNT" or "ACCOUNT" shall mean, as to any
Participant, the separate account maintained on the books of the Company in
order to reflect his or her interest under the Plan.

        1.16 "PLAN" shall mean the Komag, Incorporated Deferred Compensation
Plan, as set forth in this instrument and as hereafter amended from time to
time.

        1.17 "PLAN YEAR" shall mean the calendar year. Notwithstanding the
preceding, the 2002 Plan Year shall be the period July 17, 2002 (the effective
date of the Plan), through December 31, 2002.

        1.18 "RESTRICTED STOCK" shall mean shares of the Company's common stock
acquired pursuant to a grant of a stock purchase right from the Company.

                                    SECTION 2

                                  PARTICIPATION

        2.1 PARTICIPATION. Each Eligible Employee's decision to become a
Participant shall be entirely voluntary.

            2.1.1 INITIAL ELECTIONS BY CURRENT EMPLOYEES. An Eligible Employee
may elect to become a Participant in the Plan by electing, no later than the
date specified by the Committee in its discretion, to make Compensation
Deferrals under the Plan. An election under this Section 2.1.1 to make
Compensation Deferrals shall be effective only for the remainder of the 2002
Plan Year.

            2.1.2 NO ELECTION CHANGES DURING PLAN YEAR. After the beginning of a
Plan Year, a Participant shall not be permitted to change or revoke his or her
deferral election for such Plan Year, except to the limited extent provided in
Section 2.2.

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            2.1.3 SPECIFIC TIMING AND METHOD OF ELECTION. Notwithstanding any
contrary provision of this Section 2.1, the Committee, in its sole discretion,
shall determine the manner and deadlines for Participants to make Compensation
Deferral elections. The deadlines prescribed by the Committee may be earlier
than the deadlines specified in this Section 2.1, but shall not be later than
such specified deadlines.

        2.2 AUTOMATIC SUSPENSION OF COMPENSATION DEFERRALS. In the event that a
Participant receives a financial hardship withdrawal from any plan maintained by
the Company or an Affiliate that contains a qualified cash or deferred
arrangement under Section 401(k) of the Code (collectively, the "401(k) Plans"),
the Participant's Compensation Deferrals under the Plan (if any) shall be
suspended for a period of six (6) months from the date that the Participant
received such hardship withdrawal. Notwithstanding the preceding, the
Participant's Compensation Deferrals shall be not be so suspended if the
Committee determines that such suspension is not required in order to preserve
the tax-qualification of the 401(k) Plans.

        2.3 TERMINATION OF PARTICIPATION. An Eligible Employee who has become a
Participant shall remain a Participant until his or her entire vested Account
balance is distributed.

                                    SECTION 3

                         COMPENSATION DEFERRAL ELECTIONS

        3.1 COMPENSATION DEFERRALS. At the times and in the manner prescribed in
Section 2.1, each Eligible Employee may elect to defer his or her Compensation
and to have the amounts of such deferrals credited to his or her Account. For
each Plan Year, an Eligible Employee may elect to defer an amount equal to no
less than 100% of his or her Compensation. Notwithstanding any contrary
provision of the Plan, the Committee may reduce a Participant's Compensation
Deferrals to the extent necessary to satisfy any deductions required by law.

        3.2 CREDITING AND VESTING OF COMPENSATION DEFERRALS. The amounts
deferred pursuant to Section 3.1 shall reduce the Participant's Compensation for
the Plan Year and shall be credited to the Participant's Account as of the date
on which the amounts (but for the deferral) otherwise would have been granted to
the Participant; provided, however, that a Participant's interest in the balance
of his or her Account shall vest as set forth in Section 6.1. For each Plan
Year, the exact dollar amount to be deferred from each Compensation payment
shall be determined by the Committee under such formulae as it shall adopt from
time to time.

        3.3 DEEMED INVESTMENT RETURN ON ACCOUNTS. Although no assets will be
segregated or otherwise set aside with respect to a Participant's Account, the
amount that is ultimately payable to the Participant with respect to his or her
Account shall be determined as if such Account had been invested in common stock
of the Company (including reinvestment of any deemed dividends). The Committee,
in its sole discretion, shall adopt (and may modify from time to time) such
rules and procedures as it deems necessary or appropriate to implement the
deemed investment of the Participants' Accounts. Such procedures may differ
among Participants or classes of Participants, as determined by the Committee in
its discretion.

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        3.4 FORM OF PAYMENT. Each Participant shall indicate on his or her
deferral election (made pursuant to Section 3.1) the form of payment for the
Compensation Deferrals made pursuant to such election. A Participant may elect
(a) a lump sum payment, or (b) a fixed number of annual installment payments
(not to exceed five). A Participant's election as to the form of payment shall
apply to all amounts credited to the Participant's Account for the Plan Year
with respect to which the election is made, and except to the limited extent
provided in Section 3.6, shall be irrevocable.

        3.5 TERM OF DEFERRAL. Each Participant shall indicate on his or her
deferral election made pursuant to Section 3.1 the time for the distribution of
Compensation Deferrals (and deemed investment returns, gains and losses thereon)
made pursuant to such election. A Participant may elect a term of deferral equal
to any whole number (not less than one) of calendar years specified in his or
her deferral election. In addition, pursuant to such procedures as the Committee
(in its discretion) may adopt from time to time, a Participant may elect a term
of deferral which ends upon the later (or earlier) of the expiration of a
specified period or the occurrence of a specific event (for example, the later
of five (5) years or termination of employment with the Company and all
Affiliates). A Participant's election as to the term of deferral shall apply to
all amounts credited to the Participant's Account for the Plan Year with respect
to which the election is made, and except to the limited extent provided in
Section 3.6, shall be irrevocable.

        3.6 CHANGES IN ELECTIONS AS TO TERM AND FORM FOR PAYMENT. A Participant
may change his or her election under Section 3.4 and/or Section 3.5 for amounts
credited to the Participant's Account for any Plan Year, provided that any such
election will be effective only if (a) such election is made at least twelve
months prior to the time when distribution of such amounts otherwise would
commence (without giving effect to such election), (b) the newly elected
scheduled distribution commencement date is not earlier than twelve months after
the date when such election is made, and (c) distribution of such amounts has
not actually commenced.

                                    SECTION 4

                                   ACCOUNTING

        4.1 PARTICIPANTS' ACCOUNTS. For each Plan Year, at the direction of the
Committee, there shall be established and maintained on the books of the
Company, a separate Account or Accounts for each Participant to which shall be
credited all Compensation Deferrals made by the Participant during such Plan
Year, and deemed investment returns, gains and losses on such Compensation
Deferrals.

        4.2 PARTICIPANTS REMAIN UNSECURED CREDITORS. All amounts credited to a
Participant's Account under the Plan shall continue for all purposes to be a
part of the general assets of the Company. Each Participant's interest in the
Plan shall make him or her only a general, unsecured creditor of the Company.

        4.3 ACCOUNTING METHODS. The accounting methods or formulae to be used
under the Plan for the purpose of maintaining the Participants' Accounts,
including the calculation and crediting (or debiting) of deemed returns, gains
and losses, shall be determined by the Committee, in

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its sole discretion. The accounting methods or formulae selected by the
Committee may be revised from time to time.

        4.4 REPORTS. Each Participant shall be furnished with periodic
statements of his or her Account, reflecting the status of his or her interest
in the Plan, at least annually.

                                    SECTION 5

                                  DISTRIBUTIONS

        5.1 NORMAL TIME FOR DISTRIBUTION. Subject to Sections 5.2 through 5.4,
Section 5.6, Section 5.7 and Section 5.9, distribution of the balance credited
to a Participant's Account shall be made in shares of the Company's common stock
and shall commence as soon as administratively practicable after the end of the
term(s) of deferral elected by the Participant under Section 3.5, in accordance
with the following rules. If, pursuant to Section 3.4, the Participant elected
to receive annual installment payments, his or her first installment shall be
equal to the balance then credited to his or her Account, divided by the number
of installments to be made. Each subsequent annual installment shall be paid to
the Participant as near as administratively practicable to each anniversary of
the first installment payment. The amount of each subsequent installment shall
be equal to the balance then credited to the Participant's Account, divided by
the number of installments remaining to be made. While a Participant's Account
is in installment payout status, the unpaid balance credited to the
Participant's Account shall continue to be credited (or debited) with deemed
investment returns, gains and losses under Section 3.3.

        5.2 CHANGE OF CONTROL. If there is a Change of Control, the balance then
credited to a Participant's Account shall be distributed to him or her in a lump
sum as soon as administratively practicable after the date of the Change of
Control. Deemed investment returns, gains and losses shall be credited (or
debited) prior to any such accelerated distribution in accordance with Section
3.3. The amount of any such accelerated lump sum distribution shall also include
any amount that the Participant deferred but which has not yet been credited to
his or her Account.

        5.3 SPECIAL RULE FOR DEATH OR DISABILITY. If a Participant dies or
becomes Disabled, the balance then credited to his or her Account shall be
distributed to the Participant (or his or her Beneficiary) at the time and in
the form elected by the Participant pursuant to Sections 3.4 and 3.5; provided,
however, that the Committee, in its sole discretion, may elect to distribute
such amount in a lump sum as soon as administratively practicable after the date
of death or Disability. In accordance with Section 3.3, deemed investment
returns, gains and losses shall be credited (or debited) prior to any such
accelerated distribution.

        5.4 SPECIAL RULE RE DEDUCTIBILITY. Notwithstanding any contrary
provision of Section 5.1, any payment scheduled for a particular Plan Year shall
not be made in such Plan Year to the extent necessary to avoid application of
the deductibility limitation of Section 162(m) of the Code. (For this purpose,
deductibility shall be determined by adding such payment to all other
compensation paid by the Company and its Affiliates to the Participant during
the Plan Year.) If, pursuant to the foregoing sentences, any amounts are not
paid when originally scheduled, such amounts shall be paid in the first
subsequent taxable year in which such payments would not be

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subject to the deductibility limitation of Section 162(m) of the Code. During
any such delay in payment, unpaid amounts shall continue to be credited (or
debited) with deemed investment returns, gains and losses under Section 3.3.
Notwithstanding the foregoing, distribution of a Participant's Account shall be
made without regard to the deductibility limitation of Section 162(m) of the
Code if the time for distribution is accelerated pursuant to Section 5.2 or
Section 5.3.

        5.5 BENEFICIARY DESIGNATIONS. Each Participant may, pursuant to such
procedures as the Committee may specify, designate one or more Beneficiaries.

            5.5.1 SPOUSAL CONSENT. If a Participant designates a person other
than or in addition to his or her spouse as a primary Beneficiary, the
designation shall be ineffective unless the Participant's spouse consents to the
designation. Any spousal consent required under this Section 5.6 shall be
ineffective unless it (a) is set forth in writing in a form specified in the
discretion of the Committee, (b) acknowledges the effect of the Participant's
designation of another person as his or her Beneficiary under the Plan, and (c)
is signed by the spouse and witnessed by an authorized agent of the Committee or
a notary public. Notwithstanding this consent requirement, if the Participant
establishes to the satisfaction of the Committee that written spousal consent
may not be obtained because the spouse cannot be located, his or her designation
shall be effective without a spousal consent. Any spousal consent required under
this Section 5.5 shall be valid only with respect to the spouse who signs the
consent. A Participant may revoke his or her Beneficiary designation at any
time, provided that such revocation is in writing.

            5.5.2 CHANGES AND FAILED DESIGNATIONS. A Participant may designate
different Beneficiaries (or may revoke a prior Beneficiary designation) at any
time by delivering a new designation (or revocation of a prior designation) in
accordance with Section 5.5.1. Any designation or revocation shall be effective
only if it is received by the Committee. However, when so received, the
designation or revocation shall be effective as of the date the notice is
executed (whether or not the Participant still is living), but without prejudice
to the Committee on account of any payment made before the change is recorded.
The last effective designation received by the Committee shall supersede all
prior designations. If a Participant dies without having effectively designated
a Beneficiary, or if no Beneficiary survives the Participant, the Participant's
Account shall be payable to his or her surviving spouse, or, if the Participant
is not survived by his or her spouse, the Account shall be paid to his or her
estate.

        5.6 UNSCHEDULED WITHDRAWALS. A Participant may request to withdraw all
or a portion of his or her Account (an "Unscheduled Withdrawal"). Upon receiving
an Unscheduled Withdrawal request, the Committee shall authorize such
Unscheduled Withdrawal, subject to the following restrictions:

            5.6.1 The election to take an Unscheduled Withdrawal shall be made
by completing a form approved by and filed with the Committee.

            5.6.2 The amount payable to a Participant in connection with an
Unscheduled Withdrawal shall be ninety percent (90%) of the amount requested by
the Participant. The amount available for an Unscheduled Withdrawal shall be
calculated as of the date that the Unscheduled Withdrawal is made.

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            5.6.3 If a Participant receives an Unscheduled Withdrawal, the
remaining portion of the requested amount (i.e., ten percent (10%) of such
amount), shall be permanently forfeited and the Company shall have no obligation
to the Participant or his or her Beneficiary with respect to such forfeited
amount.

            5.6.4 The Unscheduled Withdrawal amount (and not the forfeited
amount) shall be subject to all applicable Federal and state income taxes.

            5.6.5 Subject to the Committee's approval, an Unscheduled Withdrawal
pursuant to this Section shall be made in a single stock distribution as soon as
administratively practicable after the Unscheduled Withdrawal election is
approved.

        5.7 FINANCIAL HARDSHIP. In the event that a Participant incurs a
Financial Hardship, the Committee, in its sole discretion and notwithstanding
any contrary provision of the Plan, may determine that all or part of the
Participant's Account shall be paid to him or her immediately; provided,
however, that the amount paid to the Participant pursuant to this Section 5.7
shall be limited to the amount reasonably necessary to alleviate the
Participant's Financial Hardship. Also, payment under this Section 5.7 may not
be made to the extent that the hardship may be relieved by suspension of the
Participant's Compensation Deferrals in accordance with Section 2.2.

        5.8 PAYMENTS TO INCOMPETENTS. If any individual to whom a benefit is
payable under the Plan is a minor or legally incompetent, the Committee shall
determine whether payment shall be made directly to the individual, any person
acting as his or her custodian or legal guardian under the California Uniform
Transfers to Minors Act, his or her legal representative or a near relative, or
directly for his or her support, maintenance or education.

        5.9 UNDISTRIBUTABLE ACCOUNTS. Each Participant and (in the event of
death) his or her Beneficiary shall keep the Committee advised of his or her
current address. If the Committee is unable to locate the Participant or
Beneficiary to whom a Participant's Account is payable under this Section 5, the
Participant's Account shall continue to be credited (or debited) with deemed
investment returns, gains and losses in accordance with Section 3.3. Accounts
that, in accordance with the preceding sentence, have been undistributable for a
period of thirty-five months shall be forfeited as of the end of the
thirty-fifth month. If a Participant whose Account was forfeited under this
Section 5.9 (or his or her Beneficiary) files a claim for distribution of the
Account after the date on which it was forfeited, and if the Committee
determines that such claim is valid, then the forfeited balance shall be paid by
the Company in a single stock distribution as soon as practicable thereafter
(without interest or any deemed investment returns, gains or losses after the
date of forfeiture).

        5.10 COMMITTEE DISCRETION. Within the specific time periods described in
this Section 5, the Committee shall have sole discretion to determine the
specific timing of the payment of any Account balance under the Plan. In
addition and notwithstanding any contrary provision of the Plan, the Committee,
in its sole discretion, may cause the balance credited to a Participant's
Account to be paid to him or her in a lump sum at any time following the
Participant's termination of employment with the Company or Affiliates.

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                                    SECTION 6

                        PARTICIPANT'S INTEREST IN ACCOUNT

        6.1 COMPENSATION DEFERRAL CONTRIBUTIONS. Subject to Sections 8.1
(relating to creditor status) and 9.2 (relating to amendment and/or termination
of the Plan), a Participant's interest in the balance credited to his or her
Account at all times shall vest pursuant to the vesting schedule determined by
the Company (a) as set forth in Participant's election notice for the Plan and
(b) equivalent to the vesting schedule that a Participant would have received if
he or she had elected to receive Restricted Stock in lieu of participation in
the Plan.

                                    SECTION 7

                           ADMINISTRATION OF THE PLAN

        7.1 PLAN ADMINISTRATOR. The Company is hereby designated as the
administrator of the Plan (within the meaning of Section 3(16)(A) of ERISA.

        7.2 COMMITTEE. The Plan shall be administered by the Committee. The
Committee shall have the authority to control and manage the operation and
administration of the Plan. Any member of the Committee may resign at any time
by notice in writing mailed or delivered to the Secretary of the Company.

        7.3 ACTIONS BY COMMITTEE. Each decision of a majority of the members of
the Committee then in office shall constitute the final and binding act of the
Committee. The Committee may act with or without a meeting being called or held
and shall keep minutes of all meetings held and a record of all actions taken by
written consent.

        7.4 POWERS OF COMMITTEE. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the Plan
and to control its operation in accordance with its terms, including, but not by
way of limitation, the following powers:

            (a) To interpret and determine the meaning and validity of the
provisions of the Plan and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or any
amendment thereto;

            (b) To determine the types and fair market value of Compensation
which shall be eligible for deferral under the Plan;

            (c) To determine any and all considerations affecting the
eligibility of any employee to become a Participant or remain a Participant in
the Plan;

            (d) To cause one or more separate Accounts to be maintained for each
Participant;

            (e) To cause Compensation Deferrals and deemed investment returns,
gains and losses to be credited to Participants' Accounts;

                                      -9-

<PAGE>

            (f) To establish and revise a method or procedure for the deemed
investment of Participants' Accounts, as provided in Section 3.3;

            (g) To establish and revise an accounting method or formula for the
Plan, as provided in Section 4.3;

            (h) To determine the manner and form in which any distribution is to
be made under the Plan;

            (i) To determine the manner and form for making elections under the
Plan;

            (j) To determine the status and rights of Participants and their
spouses, Beneficiaries or estates;

            (k) To employ such counsel, agents and advisers, and to obtain such
legal, clerical and other services, as it may deem necessary or appropriate in
carrying out the provisions of the Plan;

            (l) To establish, from time to time, rules for the performance of
its powers and duties and for the administration of the Plan;

            (m) To arrange for annual distribution to each Participant of a
statement of benefits accrued under the Plan;

            (n) To publish a claims and appeal procedure satisfying the minimum
standards of Section 503 of ERISA pursuant to which individuals or estates may
claim Plan benefits and appeal denials of such claims;

            (o) To delegate to any one or more of its members or to any other
person, severally or jointly, the authority to perform for and on behalf of the
Committee one or more of the functions of the Committee under the Plan; and

            (p) To decide all issues and questions regarding Account balances,
and the time, form, manner and amount of distributions to Participants.

        7.5 DECISIONS OF COMMITTEE. All actions, interpretations, and decisions
of the Committee shall be conclusive and binding on all persons, and shall be
given the maximum possible deference allowed by law.

        7.6 ADMINISTRATIVE EXPENSES. All expenses incurred in the administration
of the Plan by the Committee, or otherwise, including legal fees and expenses,
shall be paid and borne by the Company.

        7.7 ELIGIBILITY TO PARTICIPATE. No member of the Committee who is also
an employee of the Company shall be excluded from participating in the Plan if
otherwise eligible, but he or she shall not be entitled, as a member of the
Committee, to act or pass upon any matters pertaining specifically to his or her
own Account under the Plan.

                                      -10-

<PAGE>

        7.8 INDEMNIFICATION. The Company shall, and hereby does, indemnify and
hold harmless the members of the Committee, from and against any and all losses,
claims, damages or liabilities (including attorneys' fees and amounts paid, with
the approval of the Board of Directors, in settlement of any claim) arising out
of or resulting from the implementation of a duty, act or decision with respect
to the Plan, so long as such duty, act or decision does not involve gross
negligence or willful misconduct on the part of any such individual.

                                    SECTION 8

                                     FUNDING

        8.1 UNFUNDED PLAN. All amounts credited to a Participant's Account under
the Plan shall continue for all purposes to be a part of the general assets of
the Company. The interest of the Participant in his or her Account, including
his or her right to distribution thereof, shall be an unsecured claim against
the general assets of the Company. Nothing contained in the Plan shall (a) give
any Participant or beneficiary any interest in or claim against any specific
assets of the Company, nor (b) prevent the Company (with the consent of its
Board of Directors) from establishing a grantor trust (within the meaning of
subpart E, part I, subchapter J, chapter 1, subtitle A of the Code) to assist
the Company in fulfilling its obligations under the Plan.

                                    SECTION 9

                       MODIFICATION OR TERMINATION OF PLAN

        9.1 COMPANY'S OBLIGATIONS LIMITED. The Company intends to continue the
Plan indefinitely, and to maintain each Participant's Account until it is
scheduled to be paid to him or her in accordance with the provisions of the
Plan. However, the Plan is voluntary on the part of the Company, and the Company
does not guarantee to continue the Plan. The Company at any time may, by
amendment of the Plan, suspend Compensation Deferrals or may discontinue
Compensation Deferrals, with or without cause. Complete discontinuance of all
Compensation Deferrals shall be deemed a termination of the Plan.

        9.2 RIGHT TO AMEND OR TERMINATE. The Board of Directors, in its sole
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason, provided that no amendment or termination of the Plan shall,
without the consent of the Participant, reduce the balance then credited to the
Participant's Account.

        9.3 EFFECT OF TERMINATION. If the Plan is terminated pursuant to this
Section 9, the balances credited to the Accounts of the affected Participants
shall be distributed to them at the time and in the manner set forth in Section
5; provided, however, that the Committee, in its sole discretion, may authorize
accelerated distribution of Participants' Accounts as of any earlier date.

                                      -11-

<PAGE>

                                   SECTION 10

                                    GENERAL

        10.1 INALIENABILITY. In no event may any Participant, Beneficiary,
spouse or estate sell, transfer, anticipate, assign, hypothecate, or otherwise
dispose of any right or interest under the Plan; and such rights and interests
shall not at any time be subject to the claims of creditors nor be liable to
attachment, execution or other legal process. Accordingly, for example, a
Participant's interest in the Plan is not transferable pursuant to a domestic
relations order.

        10.2 RIGHTS AND DUTIES. Neither the Company nor the Committee shall be
subject to any liability or duty under the Plan except as expressly provided in
the Plan, or for any action taken, omitted or suffered in good faith.

        10.3 NO ENLARGEMENT OF RIGHTS. Neither the establishment or maintenance
of the Plan, the making of any Compensation Deferrals nor any action of the
Company or the Committee, shall be held or construed to confer upon any
individual any right to continue as an employee of the Company. The Company
expressly reserves the right to discharge any employee at any time.

        10.4 COMPLIANCE WITH RULE 16b-3. All transactions under the Plan are
intended to be exempt from liability under Section 16(b) of the Securities and
Exchange Act of 1934, as amended ("Section 16(b)"). To the extent deemed
necessary or advisable by the Committee, any election, payment, distribution or
other transaction by or on behalf of any Participant may be canceled or delayed
in order to ensure that such payment will not result in any liability under
Section 16(b) to such individual.

        10.5 COMPENSATION DEFERRALS NOT COUNTED UNDER OTHER EMPLOYEE BENEFIT
PLANS. Compensation Deferrals under the Plan will not be considered for purposes
of contributions or benefits under any other employee benefit plan sponsored by
the Company or any Affiliate, except to the extent specifically provided in any
such plan.

        10.6 APPLICABLE LAW. The provisions of the Plan shall be construed,
administered and enforced in accordance with ERISA, and to the extent not
preempted by ERISA, with laws of the State of California (other than its
conflict of laws provisions).

        10.7 SEVERABILITY. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the Plan, and in lieu of each provision which is held invalid or
unenforceable, there shall be added as part of the Plan a provision that shall
be as similar in terms to such invalid or unenforceable provision as may be
possible and be valid, legal, and enforceable.

        10.8 CAPTIONS. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or intent
of the Plan nor in any way shall affect the construction of any provision of the
Plan.

                                      -12-

<PAGE>

                                    EXECUTION

        IN WITNESS WHEREOF, Komag, Incorporated, by its duly authorized officer,
has executed this Plan on the date indicated below.

                                               KOMAG, INCORPORATED

Dated: ______________, 2002                    By: ____________________________

                                               Title: _________________________

                                      -13-<PAGE>
                                                                  EXHIBIT 10.4.3

                                   KOMAG, INC.

                              RETENTION BONUS PLAN

        On May 9, 2002, the United States Bankruptcy Court for the Northern
District of California entered an order confirming the "Debtor's Fourth Modified
First Amended Plan of Reorganization (the "Reorganization Plan"), which provides
for a reorganization (the "Reorganization") of Komag, Inc., a Delaware
corporation (the "Company"). The Reorganization Plan will become effective by
its terms on or about June 30, 2002.

        1. Purpose of the Plan. The purpose of this Retention Bonus Plan (the
"Plan") is to provide certain key employees of the Company who were employed
prior to and/or during the Reorganization and who will continue to be employed
by the Company following the Reorganization with a bonus incentive to remain so
employed.

        2. Administration of the Plan. The Plan shall be administered by the
Board of Directors of the Company, or a management committee appointed by the
Board (referred to collectively herein as the "Board"). The Board shall have the
sole discretionary authority to construe and interpret the terms of the Plan, to
determine eligibility for benefits and to determine bonus amounts available
under the Plan. The Board's determination with regard to any provision of the
Plan shall be conclusive and binding on all participants.

        3. Eligibility. The persons eligible to participate in the Plan (the
"Participants") shall be those employees of the Company listed on Exhibit A
hereto, plus any additional employees who are added by the Board and notified of
their participation in writing by a duly authorized officer of the Company.

        4. Operation of the Plan. Participants shall generally be eligible to
receive retention bonuses in the amount of up to two (2) weeks base salary for
every quarter of continued full-time employment with the Company following the
Reorganization. Participants shall also be eligible to receive restricted stock
grants to purchase the Company's common stock with the cumulative number of
shares available to grant under this Plan up to an aggregate of 1,625,000
shares. Such restricted stock grants shall have a purchase price equal to the
par value of the Company's common stock on the date of grant and shall be
subject to the terms and conditions (including vesting requirements) of the
applicable Company stock plan and restricted stock purchase agreement by and
between the Company and each participant. Retention bonuses and restricted stock
grants shall be payable to Participants in the respective amounts and at the
respective times as determined by the Board in its sole discretion. Participants
will be notified in writing by the Company of the specific amount of their
retention bonus, if any, and the dates through which they must remain employed
by the Company in order to receive the retention bonus (the "Retention Dates").
A participant must remain employed by the Company through the applicable
Retention Date in order to receive his or

<PAGE>

her retention bonus. There shall be no retention payment for partial completion
of any retention period, even if termination of employment is due to the
participant's involuntary termination, death, or disability. Any bonus paid
hereunder will be appropriately reduced to satisfy any tax withholding
obligations. The bonus will be distributed to participants at the first payroll
cycle after his or her Retention Date.

        5. Term of Plan. The Plan shall become effective upon adoption by the
Board and shall terminate at such time as the Board, in its sole discretion,
shall discontinue the Plan and implement a successor plan.

        6. Amendment and Termination of the Plan. The Plan may not be amended,
suspended or terminated prematurely unless agreed to in writing by the Company
and any affected Participants.

        7. Limitations. Neither the Plan nor the transactions authorized under
the Plan constitute an express or implied promise of continued employment for
any period whatsoever.

        8. Governing Law. The Plan shall be governed by the laws of the State of
California (with the exception of its conflict of laws provisions).

        9. Funding. The Plan shall be funded out of the Company's general
assets.

        10. Existing Agreements. This Plan represents the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
any prior severance or retention plans or agreements that participants may have
entered into with the Company prior to the date hereof.

        11. Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets shall assume
the Company's obligations under the Plan and any Existing Agreements and shall
agree expressly to perform the Company's obligations under the Plan and any
Existing Agreements in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a succession.

                                                                             -2-
<PAGE>

                                    EXHIBIT A

                          LIST OF ELIGIBLE PARTICIPANTS

                                                                             -3-

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