Document:

Exhibit 10.46

 

EXHIBIT 10.46

MASTER SERVICES AGREEMENT

THIS AGREEMENT (“Agreement”) is made and entered into as of the date of the
later signature below (the “Effective Date”) by and between Intuit Inc., a
Delaware corporation, with offices at 2535 Garcia Avenue, Mountain View, CA
94043, and its Enterprise Members, as defined below (“Intuit”), and Sony Disc
Manufacturing, a Division of Sony Music Entertainment Inc., a Delaware
corporation, with principal offices located at 550 Madison Avenue, New York,
New York 10022 (“SDM”). For the purposes of this Agreement, and each separate
Statement of Work (as defined below) entered into between the parties,
Enterprise Members shall include all affiliates, subsidiaries and related
companies that Intuit controls by ownership of fifty percent (50%) or greater
equity interest, or controls the day-to-day management by management contract,
solely in connection with Intuit’s relationship with such entity. The
definition of “Intuit” shall also include Intuit’s designated agents, as set
forth in section 6(b), below.

In consideration of receiving payment by Intuit for services to be performed by
SDM, SDM and Intuit agree as follows:

1. Independent Contractor. In accordance with the mutual intentions of Intuit
and SDM, this Agreement and each separate Statement of Work establishes between
them an independent contractor relationship, and all of the terms and
conditions of this Agreement and each separate Statement of Work shall be
interpreted in light of that relationship.

2. Services; Statements of Work.

(a)  From time to time during the Term, Intuit may request SDM to perform
certain services, including without limitation services relating to the
procurement, mastering, replicating, printing, packaging, inventory management,
fulfillment and shipment of Intuit’s CD and DVD products (collectively, the
“Services”). All Services shall be performed pursuant to one or more mutually
agreed upon Statements of Work, each of which shall take the form of a separate
agreement between the parties that will
expressly incorporate the terms and conditions of this Agreement. Each
Statement of Work shall specify: (i) SDM’s obligations, including a
description of the Services to be performed, any specifications that must be
met, and the deliverables to be provided to Intuit (the “Deliverables”); (ii)
the performance schedule relating to such Services, including order time
deadlines, delivery requirements, and any liquidated damages (as defined in
section 5(b)) applicable in the case of late deliveries; (iii) a description of
any materials to be provided by or on behalf of Intuit for incorporation with
any Deliverables and any artwork or logos to be applied to the Deliverables by
SDM; (iv) any specific inspection or testing requirements, including any
requirement for the provision and inspection of samples prior to commencement
of production; (v) the applicable fees, discounts and payment terms for the
Services; (vi) any terms and conditions relating to obsolescence and the
parties’ respective responsibilities therefore; and (vii) any other pertinent
terms and conditions. In the event of a conflict between the provisions of
this Agreement and the specific provisions set forth in a Statement of Work,
the provisions of the Statement of Work shall control for that engagement only.

(b)  SDM agrees to use commercially reasonable efforts to perform the Services
and provide the Deliverables in accordance with the terms and conditions of
this Agreement and each separate Statement of Work. SDM acknowledges and
agrees that all terms under this Agreement and any Statement of Work regarding
quality, quantity, time of delivery and/or performance, and other
specifications are material terms and must be strictly complied with. SDM
certifies it owns, or intends to purchase at its own expense, all the equipment
and tools it requires to perform the Services. SDM acknowledges and agrees
that time is of the essence with respect to any Services performed under this
Agreement and under each separate Statement of Work. Delays shall be reported
in writing (which may include e-mails) within twenty four (24) hours to Intuit
and/or Intuit’s designated agent.

(c)  Intuit may request changes that affect the scope or schedule or other terms
applicable to the Services or Deliverables under any Statement of Work. If
Intuit requests such a change, then SDM promptly shall notify Intuit if it
believes that an adjustment in the fees to be paid to SDM with respect to the
applicable Statement of Work, or an adjustment to the applicable performance
schedule or specifications,
is required. In such case, the parties shall negotiate in good faith a
reasonable and equitable adjustment in the applicable fees, schedule and
specifications. SDM shall continue work pursuant to the existing Statement of
Work, and shall not be bound by any change requested by Intuit, until such
change has been agreed upon in writing by the parties.

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(d)  SDM represents and warrants that it currently is capable of meeting, and
shall maintain during the term of this agreement, levels of production capacity
that are consistent with, the levels of production capacity described in each
Statement of Work. SDM further agrees to dedicate sufficient production
capacity to provide for Services and Deliverables in excess of those identified
in each purchase order up to the limits set forth below. All such Services and
Deliverables shall be provided in accordance with the schedule, specifications
and terms and conditions of this Agreement and all applicable Statements of
Work. The below chart covers the amounts of overflow SDM agrees to dedicate
production to cover for Purchase Orders placed within a one week period as
compared to the amount forecasted for such week four weeks previously.

	 	 	 	 	 	 	 
	No. of CDs Forecasted	 	Approved CD Overflow
	
	 	

	0
– 100,000
	 	100% of Quantity Identified
	100,001
–
250,000
	 	50% of Quantity Identified
	250,001 – 1,000,000
	 	25% of Quantity Identified
	1,000,001 +
	 	No less than 250,000 Additional Units*

	*	 	If Intuit desires capacity in excess of 250,000 above the forecasted amount,
SDM will make commercially good faith efforts to fill meet such request, but
failure to do so shall not constitute a breach of this Agreement.

Failure by SDM to provide sufficient capacity to accommodate orders for
Services and Deliverables in the quantities identified in the above table shall
constitute a material breach of this Agreement. In addition, SDM shall make
commercially reasonable efforts to accommodate orders for Services and
Deliverables in excess
of the quantities identified in the above table. Failure by SDM to accommodate
orders in excess of the quantities listed in the above table shall not,
however, constitute a breach of this Agreement.

Example: Intuit intends to provide SDM forecasts as described below in section
3(a). Such forecasts shall include quantities forecasted to be purchased four
weeks in the future. The above chart shall apply to permitted overflow in a
particular week as compared to the forecast for such week made four weeks
before. So, for example, if on Monday, July 29th, Intuit were to forecast that
it expected to purchase 1,500,000 CDs in the week starting Monday, August 26th,
then Intuit could place Purchase Orders in the week of August 26th for a total
quantity of CDs of up to 1,750,000 CDs (1,500,000 forecasted + 250,000
permitted overflow) and SDM would be contractually required to fill such
Purchase Orders. In the event Intuit should place additional Purchase Orders
in the week of August 26th for additional CDs beyond the 1,750,000 already
ordered in such week, SDM would make commercially reasonable efforts to fill
such additional Purchase Orders, but such fulfillment is not contractually
required.

(e)  In the event that Intuit authorizes SDM to use any property of Intuit in
performing the Services hereunder, SDM agrees to use such property solely in
connection with the performance of the Services hereunder and shall not use
such property for any other purpose. SDM acknowledges that Intuit shall have
the right to terminate this Agreement and any separate Statement of Work
immediately without further payment to SDM other than payment for Services
rendered as of the date thereof, and without prejudice to Intuit’s rights and
remedies under this Agreement or such Statement of Work, in the event that SDM
uses any such property for any other purpose. SDM shall provide a safe and
secure environment for any property of Intuit, including without limitation any
Intuit CD products delivered to SDM pursuant to this Agreement or any separate
Statement of Work. SDM acknowledges that it shall have no right or title to
the Intuit property and shall not sell, lease, create security interests in or
otherwise transfer or encumber any of the Intuit property. SDM shall assure
that the Intuit property, and any copies thereof made by or upon the authority
of SDM, are at all times readily identifiable, and neither SDM nor any of its
agents shall mix or commingle any Intuit property with any property of
SDM or any other person or entity. Intuit may require SDM to return the Intuit
property to Intuit at any time upon reasonable prior written notice, and SDM
shall return the Intuit property to Intuit without prior notice upon
termination of this Agreement or the applicable Statement of Work.

(f)  The parties agree and acknowledge that Intuit is not obligated to procure
any specific amount of Services under this Agreement and shall be obligated to
procure only those quantities for which Intuit has submitted a specific order
pursuant to a Statement of Work. Intuit further acknowledges, however, that in
the event initial orders Intuit places with SDM under this Agreement are
fulfilled in a manner satisfactory to Intuit in the exercise of Intuit’s sole
reasonable discretion, that Intuit intends, as of the date of execution of this

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Agreement, to expand the scope of Intuit’s orders with SDM to levels determined
by Intuit at such time and accepted by SDM.

(g)  SDM shall provide all Services from the location(s) designated in the
applicable Statement of Work. In the event SDM desires to fulfill Services
from a location other than the location(s) set forth in the applicable
Statement of Work, SDM shall provide Intuit prior written notice of such
proposed change. No such change in fulfillment location shall affect SDM’s
obligations under this Agreement and under the applicable Statement(s) of Work.

(h)  Intuit expects, and SDM agrees to submit, two (2) to three (3) suggestions
each quarter that could improve the efficiency of SDM’s provision of the
Services and/or result in cost savings. The suggestions should detail how the
process or idea would be implemented, the dollar investment required, the
benefits and drawbacks of the suggestion, and an explanation of how the
suggestion would result in increased efficiency or otherwise result in a cost
savings. SDM agrees to submit suggestions pursuant to the mutually agreed upon
process detailed in the applicable Statement of Work. If Intuit chooses to
implement the suggestion and such implementation results in an actual,
documentable monetary savings to Intuit, then Intuit will share such savings
with SDM by providing SDM thirty percent (30%) of the measured savings.

3. Forecasts and Purchase Orders.

(a)  Intuit shall deliver to SDM such forecasts of its demand for Services
(“Forecasts”) as shall be specified in a Statement of Work. Forecasts
delivered by Intuit shall be solely for the parties’ planning purposes and
shall not be binding in any manner upon Intuit or SDM, other than to the extent
expressly set forth above in subparagraph 2(d).

(b)  Intuit shall issue purchase orders for Services (“Purchase Orders”) in such
form as shall be determined by mutual agreement of the parties. Purchase
Orders shall contain: a reference to this Agreement and the applicable
Statement of Work; the identification of the Services being purchased; the
quantity to be purchased; the requested delivery date and destination; and any
other special information required by this Agreement or by the circumstances of
the Purchase Order. The terms and conditions of this Agreement shall be deemed
incorporated into and made a part of each Purchase Order issued to SDM under
this Agreement or any separate Statement of Work. Any terms and conditions
appearing in any Purchase Order, or in any acknowledgment or acceptance of a
Purchase Order, that are inconsistent with the terms and conditions of this
Agreement or the applicable Statement of Work shall be void and of no force and
effect.

(c)  SDM shall accept and fill all Purchase Orders that are consistent with the
terms of this Agreement and the applicable Statement of Work. Intuit shall
have the right to increase, decrease, cancel or reschedule scheduled Services
in whole or in part with fifteen (15) days advance written notice, provided,
however, that SDM shall be entitled to payment for Services rendered prior to
SDM’s receipt of such notice.

(d)  SDM shall maintain a reasonable inventory of materials necessary to satisfy
requirements for Services in accordance with the Forecasts provided by Intuit.
SDM agrees to provide to Intuit inventory reports of such materials no less
often than weekly. Intuit may request that SDM increase its inventory of such
materials on hand by a reasonable and commercially viable number upon written
notice to SDM. Intuit shall have the right to direct request that SDM procure
its materials from Intuit recommended suppliers, and SDM shall consider in good
faith all such requests; however, SDM shall ultimately have the right to select
all suppliers in its sole discretion.

Intuit agrees to use commercially reasonable efforts to provide SDM prior
written notice of any intent by Intuit to visit SDM suppliers providing goods
or services for Deliverables. Absent the prior written approval of SDM, Intuit
agrees to not discuss pricing issues with such Suppliers. In addition, in the
event Intuit’s instructions to such suppliers should contradict SDM’s
instructions, SDM’s instructions shall control. Notwithstanding Intuit’s right
to visit such suppliers, SDM shall be solely responsible for performance of its
agreements with and managing all contractual relationships with such suppliers.

4. Testing and Acceptance.

(a)  The Services and each shipment of Deliverables shall be subject to
acceptance quality level (“AQL”) testing in accordance with SDM’s standard,
market-accepted testing procedures. AQL testing may be conducted upon all
Services or Deliverables or upon representative samples, in accordance with
such SDM procedures or as otherwise agreed by the parties and set forth in the
applicable the Statement of Work.

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(b)  SDM shall provide a list of test equipment and standard test procedures to
be used by SDM for AQL testing for Intuit’s approval, which approval shall not
be unreasonably withheld. SDM shall conduct AQL tests in accordance with such
test procedures prior to shipment. SDM shall replace, prior to shipment, each
Deliverable which fails the AQL test. A complete record of the tests performed
shall be kept by SDM in accordance with the SDM Certified Quality System and
made available to Intuit upon request. A representative of Intuit may, upon
request and at Intuit’s sole expense, witness the AQL tests carried out by SDM,
but Intuit’s failure to witness such tests shall not be deemed to be acceptance
of the Services or Deliverables or grounds for refusing to accept any Services
or Deliverable.

(c)  Services and Deliverables shall be subject to inspection and testing by
Intuit at Intuit’s sole expense and at all reasonable times and places,
including during the manufacture of such Deliverables. For the purposes of
this Agreement, a Service or Deliverable shall be deemed “Defective” in the
event such Service or Deliverable does not conform to the mutually agreed upon
applicable specification. SDM shall reasonably assist Intuit’s personnel in
the conduct of any such inspection. Such
inspections shall in no way relieve SDM of its obligation to deliver conforming
Services and Deliverables or waive Intuit’s right of inspection and acceptance
after the Deliverables are shipped. Intuit may, but shall not be required to,
perform its own AQL testing upon Deliverables shipped by SDM. Intuit shall
advise SDM of Defects in the Deliverables within 30 days after receipt of a
shipment. Intuit shall have the right to reject (a) any Deliverable that has a
Defect, and (b) the entire shipment (a “Defective Shipment”) if the shipment,
when inspected, has Defects higher than the percentage specified with respect
to such Deliverables in the Statement of Work. Intuit’s return of any rejected
Defective Deliverable shall be directed to the location in the continental
United States designated by SDM. Following receipt of the Defective
Deliverable or the Defective Shipment, as the case may be, by SDM, SDM agrees
to make all commercially reasonable efforts to replace the Defective
Deliverable and ship such replaced Defective Deliverable to Intuit within five
(5) days from the date such Defective Deliverables are received by SDM. Unless
SDM requests shipment by a designated carrier “freight collect,” inbound
shipping charges shall be prepaid by Intuit and shall be reimbursed by SDM, and
SDM shall be responsible for outbound shipping charges. In the event SDM is
unable to perform such replacement within the aforementioned time period, SDM
shall provide Intuit with written notice of such failure, which notice shall
include both an explanation for the cause of such delay and what measures SDM
has taken to correct such problem. SDM further agrees that in the event SDM is
unable to perform such replacement within the aforementioned time period, SDM
shall make its best efforts to replace such Defective Deliverables within ten
(10) days from the date such Defective Deliverables are received by SDM.
Intuit’s rights under this Section shall be in addition to such other rights
Intuit may have at law or equity or under any other agreement. Defective
Deliverables that are returned to SDM shall not be deemed to be delivered for
purposes of this Agreement or any separate Statement of Work until replacement
Deliverables are properly delivered by SDM. The parties agree that in the
event SDM is required under this section to make its “best efforts” to replace
a Defective Deliverable, SDM shall be required to pay for expedited shipping,
but that in no event shall SDM be required to pay more than 5X (five times) its
regular shipping costs to fulfill such “best efforts” requirement.

5. Delivery; Risk of Loss. All shipment terms are F.O.B. SDM Plant.

(a)  All shipments of Deliverables produced in connection with the performance
of Services shall be shipped F.O.B. the relevant SDM plant or facility. SDM
shall ship all Deliverables produced in connection with the performance of
Services to the destination and in accordance with shipping instructions
provided by Intuit, and all such shipments shall be insured for their full
value (for the avoidance of doubt, at Intuit’s sole cost and expense). SDM
shall convey good title, free from any claim or encumbrance, to all tangible
personal property sold and delivered by SDM under this Agreement and any
separate Statement of Work. Title to the tangible personal property included
within the Deliverables shall pass at the time of shipment. Any loss or damage
to the Deliverables prior to passing of title shall be at SDM’s risk. SDM
shall manage the shipment of the Deliverables to Intuit’s designated locations.
Such management shall include reasonable efforts to: coordinate with shippers
to ensure Deliverables are available for pick up at designated times and
locations.

(b)  Time is of the essence with respect to all Services performed by SDM under
this Agreement, any separate Statement of Work and any Purchase Orders issued
hereunder. Deliverables released to shipping agent on the agreed upon release
date, or up to two days before such release date set forth in a Purchase Order
shall be considered on time. In the event that any Deliverable is not made on
time (a “Late Release”), the remedy escalation listed below shall apply. For
the purposes of this Agreement, a Purchase Order shall be deemed to be a
“Launch Order” if: (1) Intuit so designates such Purchase Order; and (2) the
Purchase Order is for the initial ordering of a particular part number of a
Product (e.g. the first order to replicate

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 quantities of Intuit’s “Federal
TurboTax 2003” product). A Purchase Order shall be deemed a “Replenishment
Order” if (1) Intuit so designates such Purchase Order; and (2) the Purchase
Order is for a subsequent re-ordering of a particular part number of a Product.
The following remedies shall apply in the event of Late Release:

	 	 	 	 	 	 	 	 	 	 
	Incidence of Late Release	 	Launch Orders	 	Replenishment Orders
	
	 	
	 	

	 	1st time in a 30 day period
	 	Written corrective action report	 	Written corrective action report
	 	2nd time in a 30 day period
	 	 	10	%	 	 	5	%
	3rd (or additional) times in a 30 day period
	 	 	20	%	 	 	10	%

For the purpose of the above table, the percentages shall reflect the listed
percentage of the total amount SDM charges Intuit for affected Deliverables.
For example, if (a) Intuit should place a Launch Purchase Order for which SDM
shall charge $100,000; (b) SDM’s release of such order should constitute a Late
Release; and (c) such release is the second Late Release SDM has made of a
Purchase Order within a 30 day period, then SDM shall credit to Intuit as
liquidated damages and not as a penalty an amount equal to 10% of the charges
billed for such Late Release or $10,000. Such credit shall be made on SDM’s
next invoice to Intuit (or Intuit’s designated agent) after Intuit’s
notification to SDM of such Late Release. In the event such a credit is due
and Intuit does not place additional orders with SDM, then such amount shall be
paid by SDM to Intuit one hundred eighty (180) days after Intuit places its
last order with SDM. SDM shall immediately notify Intuit in writing when SDM
first has knowledge of any event or impediment that could result in delay in
the delivery of a Deliverable, including, but not limited to, any impending
material shortage, transportation delays, governmental regulation, labor
dispute or other events or impediments. Intuit shall be entitled to
reschedule, or demand reasonable expedited delivery of any Late Delivery all at
SDM’s expense.

6. Project Management.

(a)  Each party shall designate a “Project Manager” who shall be the principal
point of contact between the parties for all matters relating to Services
provided under a particular Statement of Work. Each Statement of Work shall
contain an initial designation of a Project Manager for each party. A party
may designate a new Project Manager by written notice to the other party.

(b)  Intuit has, as of the Effective Date of this Agreement, designated an
entity
(“Intuit’s Agent”), to exercise all or any part of Intuit’s rights, assume all
or any part of Intuit’s benefits, and bear all or any part of Intuit’s burdens
pursuant to this Agreement or a designated Statement of Work pursuant to the
terms and conditions detailed in this section. SDM agrees that the entity
Intuit has so designated as Intuit’s Agent in the Statement of Work executed by
the parties on or about the Effective Date of this Agreement is acceptable to
SDM. For purposes of clarity and as an example, Intuit’s Agent may manage the
daily transactional relationship with SDM, including the placement of Purchase
Orders for Services and ensuring that deliveries are made in accordance with
the delivery instructions set forth in the Purchase Order. Intuit’s Agent
shall also be financially responsible for payments for Services in accordance
with Section 7 of this Agreement subject to this section 6(b). The following
conditions apply to Intuit’s Agent:

	       	(i)	  	In the event SDM does not receive payment from Intuit’s Agent
within forty five (45) days of Intuit’s Agent’s receipt of a SDM
invoice, SDM shall promptly notify Intuit in writing (an e-mail
confirmed received by Intuit’s designated representative shall
suffice) of such failure to receive payment. Intuit shall provide
SDM commercially reasonable assistance to resolve the payment dispute
with Intuit’s Agent. In addition, a representative of Intuit (not
Intuit’s Agent) shall review the matters at issue in such payment
dispute and determine whether SDM’s Deliverables met the delivery
instructions set forth in the Purchase Order(s) at issue and whether
the Deliverables met the applicable specifications for such
Deliverables contained in this Agreement and any applicable
Statement(s) of Work.
	 

	       	(1)	  	If SDM’s Deliverables met such delivery instructions and
applicable specifications and Intuit’s Agent fails to pay SDM
within fifteen (15) days of the date SDM notifies Intuit of such
failure to pay, then Intuit shall pay SDM the amount in dispute on
the first business day after such fifteen day period. In such
situation, upon receipt of payment by Intuit, SDM shall assign all
rights it possesses as to such payment dispute to Intuit.

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	       	(2)	  	If SDM’s Deliverables do not meet such delivery
instructions and/or applicable specifications, Intuit shall
continue to make commercially reasonable efforts to assist SDM to
resolve such payment dispute, but Intuit shall not be obligated to
pay SDM the amount in dispute.
	 

	       	(ii)	  	Intuit’s obligations under section 6(b)(i)(1) to pay SDM in the
event Intuit’s Agent fails to pay SDM for Deliverables that meet such
delivery instructions and applicable specifications shall extend to
any situation in which Intuit’s Agent is unwilling or unable to pay
SDM the amount owed (e.g. Intuit’s Agent enters bankruptcy or is
otherwise unable to pay debts as they come due). In any such
situation, upon receipt of payment by Intuit, SDM shall assign all
rights it possesses as to such payment dispute to Intuit.
	 
	       	(iii)	  	In the event Intuit’s Agent should require SDM to enter into a
contractual arrangement in which SDM would be required to pay
liquidated damages (or other monetary damages) (collectively, a
“Monetary Damage”) to Intuit’s Agent for SDM’s failure to perform
under the applicable Purchase Order (e.g., including, but not limited
to, Monetary Damages in situations such as SDM shipping Deliverables
later than the date set forth on the applicable Purchase Order or SDM
shipping Deliverables that do not conform to the applicable
specifications), SDM shall promptly inform Intuit in writing (an
e-mail confirmed received by Intuit’s designated representative shall
suffice) of such requirement before SDM initiates fulfillment of any
Purchase Order for which such a Monetary Damage would apply. Intuit
shall make commercially reasonable efforts to ensure that such a
Monetary Damage shall not apply to SDM. In the event Intuit is
unable to convince Intuit’s Agent to waive such Monetary Damage as to
SDM, and SDM nevertheless agrees to fill such Purchase Order Intuit
agrees to waive its rights to liquidated damages from SDM under
sections 5(b) and 11(d) of this Agreement as to Purchase Orders
placed by Intuit’s Agent for which SDM becomes obligated to pay
Intuit’s Agent a Monetary Damage. For the avoidance of doubt,
however, SDM shall not be required to fulfill any Purchase Order
placed by Intuit’s Agent which is
inconsistent with the terms of this Agreement or the applicable
Statement of Work.
	 
	       	(iv)	  	SDM affirms that as of the Effective Date of this Agreement,
Intuit’s Agent has not required SDM to enter into a contractual
arrangement in which SDM would be required to pay a Monetary Penalty
to Intuit’s Agent under any circumstances. In addition, SDM agrees
to make all commercially reasonable efforts to negotiate between SDM
and Intuit’s Agent a mutually agreeable purchase order terms that are
consistent with the terms of this Agreement and/or the applicable
Statement of Work within thirty (30) days of the Effective Date of
this Agreement. In the event SDM believes that it shall not be
successful in negotiating such purchase order terms it shall promptly
inform Intuit of such expected failure. Notwithstanding the
foregoing, SDM agrees to accept and fulfill purchase orders made by
Intuit’s Agent during such thirty (30) day period. SDM agrees,
therefore, to accept such purchase orders even though SDM and
Intuit’s Agent have not completed their negotiations and therefore
the version of the purchase order terms that SDM hereby agrees to
accept for such thirty (30) day period might be inconsistent with the
terms of this Agreement and/or the applicable Statement of Work.

7. Compensation and Payment.

(a)  Intuit shall pay SDM for the performance of the Services in the amounts and
in accordance with the schedule specified in the applicable Statement of Work.
No compensation shall be paid for services rendered by SDM unless the Services
are set forth in a Statement of Work or otherwise agreed upon in writing by the
parties.

(b)  SDM shall issue invoices to Intuit promptly upon completion of Services and
shipment of Deliverables, but in no event later than ten (10) business days
after the later of completion of shipment. Invoices shall include a reasonably
detailed description of the Services performed, in a format acceptable to
intuit in its reasonable discretion, the Deliverables shipped, and the fees
related thereto. SDM shall mail these invoices to Intuit Inc., Accounts
Payable, M.S. 247, P. O. Box 391296 Mountain View, CA 94039-1296, or such other
address as Intuit shall
designate in writing from time to time. All invoices must reference the number
and date of the relevant Statement of Work and must be received by Intuit
within six (6) months after shipment of the underlying Deliverables. Any
invoices not received within such six (6) month time period shall be deemed
forgiven by SDM.

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(c)  All undisputed payments shall be made by Intuit within forty five (45) days
after receipt of any invoice, and mailed to SDM at its address specified in the
invoice. Intuit shall be entitled to receive a one percent (1%) discount on
all payments made within ten (10) days. Applicable discounts shall be
calculated from the later of the date of receipt of invoice by Intuit or the
date the corresponding Deliverables are received at the designated destination.
In the event that Intuit disputes any invoice rendered or amount paid, Intuit
shall notify SDM promptly in writing and the parties shall work together to
resolve such dispute expeditiously. The time for payment of the disputed
portion of the amount of any invoice shall be extended until resolution of the
dispute but only for the disputed amount. Any amount not in dispute shall be
paid in accordance with the terms of this Agreement. The parties shall use
reasonable efforts to resolve any such dispute in good faith as soon as
practicable.

(d)  Intuit shall pay sales and use taxes that are applied to Intuit’s purchase
of the Services under applicable law, excluding any taxes related to the net
income of SDM. Taxes for goods and services shall be separately stated by SDM
on the invoices submitted to Intuit, and different types of taxes shall be
separately stated by the type of tax (sales, use, etc.).

(e)  SDM shall maintain complete and accurate records relating to any fees and
payments charged or made in connection with the Services provided under this
Agreement and any separate Statement of Work. Intuit may elect to conduct
audits relating to the Services and Deliverables pursuant to the following
schedule: (i) Inventory Count Audit. Intuit may conduct an “inventory count”
audit, an audit in which Intuit (or Intuit’s designated representative) enters
SDM’s facility and confirms that SDM possesses the physical quantity of a good
within its inventory which, based upon SDM’s records, SDM should in fact
possess — i.e. a confirmation that SDM’s records of quantities in fact match
the actual physical quantities of goods at
issue. Such an inventory count audit shall be made on (1) not less than five
(5) business days notice, and (2) not more often than once every one hundred
eighty (180) calendar days. Intuit shall bear the costs associated with such
audit. (ii) Cycle Count Program Audit. Intuit may conduct an audit of SDM’s
cycle count program, an audit in which Intuit will review SDM’s cycle count
controls, review applicable records and perform test counts. Such an audit
shall be made on (1) not less than thirty (30) calendar days notice, and (2)
not more often than once every one hundred eighty (180) calendar days. Intuit
shall bear costs associated with such audit. (iii) Pricing Audit. Intuit may
conduct a “pricing” audit, an audit in which Intuit (or Intuit’s designated
representative) enters SDM’s facility and confirms that the appropriate
quantity of Services and Deliverables were received for amounts charged. Such
an audit shall be made on (1) not less than thirty (30) calendar days notice,
and (2) not more often than once every one hundred eighty (180) calendar days.
Intuit shall bear costs associated with such audit, unless SDM disputes the
findings of such audit and requires that an independent certified public
accountant confirm such results, in which case SDM shall bear the costs of such
second audit up to an amount of $20,000 (with Intuit bearing cost of the
charges by such independent certified public accountant in excess of $20,000).
In the event the last applicable pricing audit reveals that Intuit overpaid for
the Services and Deliverables received, SDM shall credit Intuit all amounts so
overpaid within ten (10) business days of the provision of the last auditor’s
report to the parties, or within such other time period as the parties may
mutually agree upon. Intuit shall make commercially reasonable efforts to
coordinate the different audits permitted under this section to minimize the
impact on SDM. The audit rights set forth herein shall continue for two (2)
years following the termination of this Agreement for any reason.

(f)  SDM agrees and shall ensure that, at all times during the Term, the prices
and fees charged Intuit for the Services performed or Deliverables provided
under this Agreement or any Statement of Work hereunder, shall be no less
favorable than the prices and fees (of whatever nature) charged by SDM to third
parties engaged in similar arrangements under which SDM’s responsibilities are
substantially similar to those it assumes under this Agreement.

8. Key Personnel.

(a)  Intuit and SDM may designate pursuant to a Statement of Work certain key
employees of SDM that are deemed to play a significant role in SDM’s
performance of Services pursuant to such Statement of Work. SDM shall consider
in good faith any such designation when determining (or revising) the
responsibilities for any such employee.

(b)  Intuit shall be entitled to notify SDM in the event that any of SDM’s
employees or subcontractors whom Intuit and SDM have so designated as key
personnel are not performing the Services adequately, in Intuit’s reasonable
opinion. Upon receipt of such notice, SDM shall discuss such deficiency with
Intuit and take commercially reasonable steps to resolve such deficiency.

7

 

(c)  SDM shall not delegate or otherwise subcontract any of its obligations
under this Agreement or any separate Statement of Work without first providing
three (3) months prior notice and obtaining Intuit’s prior written consent.
Notwithstanding any such approved delegation or subcontracting, SDM shall be
responsible for fulfilling all of its responsibilities under the Agreement and
each separate Statement of Work and ensuring that all of Intuit’s requirements
as defined under this agreement are met.

9. Term/Termination.

(a)  Unless otherwise terminated in accordance with this Agreement, the term of
this Agreement shall begin on the Effective Date and shall continue for a
period of three (3) years after the Effective Date (the “Term”).

(b)  Either party may terminate this Agreement or any separate Statement of Work
due to a material breach of this Agreement or such Statement of Work by the
other party if such material breach remains uncured for a period of fifteen
(15) calendar days following receipt of written notice by the breaching party.

(c)  If either Intuit or SDM should become insolvent, or make any assignment for
the benefit of creditors, or admit in writing its inability to pay debts when
due, or make or suffer to be made any transfer to any person, trustee,
receiver, liquidator, or referee for the benefit of creditors, or file a
voluntary petition in bankruptcy, or suffer an involuntary petition in
bankruptcy to be filed against it which is not stayed within
thirty (30) days of filing, or file any petition in any reorganization,
arrangement, composition, readjustment, liquidation, or dissolution or similar
relief for itself, or become unable to pay its debts generally as they become
due, the other party shall have the immediate right upon providing notice to
terminate this Agreement or any separate Statement of Work.

(d)  In the event that the Agreement is terminated, and the Services under one
(1) or more Statements of Work are in progress, Intuit or SDM shall have the
right to terminate the relevant Statement(s) of Work. Any Services governed by
a Statement of Work not terminated following any termination of this Agreement
shall be completed by SDM, in accordance with the terms and conditions of this
Agreement. The parties agree to negotiate in good faith any changes that might
be necessary in the scheduling of the provision of Services under such
Statement(s) of Work that might be deemed necessary at such time.

(e)  Upon termination or expiration of this Agreement or any Statement of Work,
or at any prior time upon the request of Intuit, SDM shall promptly deliver to
Intuit, or certify to the destruction thereof, all memoranda, notes, records,
drawings, manuals, disks, documents, media, equipment, papers or other
information, obtained by SDM from Intuit, including all copies thereof. SDM
acknowledges that all such materials are the property of Intuit and SDM agrees
not to retain any copies of such materials after the termination or expiration
of this Agreement or of any Statement of Work.

(f)  The provisions of Sections 7; 9(d), (e), (f); 10; 11(a), (b), (c), (e)
(solely for the purposes of section 12); 12; 14; and 16(a), (b) and (c) as well
as corresponding provisions of any Statements of Work, shall survive any
termination or expiration of this Agreement and any separate Statement of Work.

10. Confidential Information.

(a)  For the purposes of this Agreement, “Confidential Information” means the
existence and terms and conditions of this Agreement and each Statement of
Work, information regarding the quantity of Services ordered pursuant to this
Agreement or any separate Statement of Work, and all non-public information
about the
disclosing party’s (or its suppliers’) business or activities that a reasonable
person would consider to be proprietary and confidential, which shall include
all business, financial, technical and other information of either party, (e.g.
information concerning forecasts, pricing, future business plans, etc.) whether
or not it is marked or designated by such party as “confidential” or
“proprietary” at the time of disclosure. Confidential Information shall not
include information that: (i) is in or enters the public domain without breach
of this Agreement; (ii) the receiving party lawfully receives from a third
party without restriction on disclosure and without breach of a nondisclosure
obligation; (iii) the receiving party rightfully knew prior to receiving such
information from the disclosing party; or (iv) the receiving party develops
independent of any information originating from the disclosing party.

(b)  Each party agrees that (i) it shall not disclose to any third party any
Confidential Information disclosed to it by the other party except as expressly
permitted in this Agreement; (ii) it shall not use any Confidential Information
disclosed to it by the other party except as necessary to perform its
obligations under this Agreement; and (iii) it shall take all reasonable
measures to maintain the confidentiality of all Confidential

8

 

 Information of the
other party in its possession or control, which will in no event be less than
the measures it uses to maintain the confidentiality of its own information of
similar importance. Notwithstanding the foregoing, each party may disclose
Confidential Information to the extent required by a court of competent
jurisdiction or other governmental authority or otherwise as required by law,
provided that such party uses reasonable efforts to request confidential
treatment or a protective order before such disclosure; or on a “need-to-know”
basis under an obligation of confidentiality to its legal counsel and
accountants. In addition, the parties agree that the parties may disclose
information to Intuit’s Agent pursuant to the terms of a separate
non-disclosure agreement entered into by the parties and Intuit’s Agent.

(c)  Notwithstanding anything to the contrary in subparagraphs 10(a) or (b)
above, SDM agrees that any Intuit software delivered to SDM pursuant to this
Agreement or any Statement of Work shall be Confidential Information pursuant
to this Agreement and shall be maintained by SDM under lock and key in a
controlled environment, and that access to such software shall be limited to
SDM employees
on a bona fide “need to know” basis in order to support the performance of
Services. To the extent that appropriate notices have not already been affixed
by Intuit, SDM shall, upon written request by Intuit, affix appropriate notices
or labels to all physical expressions of Intuit’s software describing Intuit’s
proprietary rights thereto. SDM shall not alter or remove or permit to be
altered or removed any such notices or labels. SDM shall inform its present
and future employees who have access to Intuit’s software that such software is
confidential and proprietary to Intuit. SDM shall notify Intuit immediately of
and provide details regarding any unauthorized possession, use or knowledge of
Intuit’s software of which SDM becomes aware. SDM shall ensure that each of
its present employees has signed, and each of its future employees will sign, a
non-disclosure agreement that sets forth SDM’s policies with respect to the
protection and treatment of SDM’s confidential information and that of third
parties with whom SDM does business. SDM further affirms that it shall enforce
the terms of such non-disclosure agreements as to Intuit information to the
same extent SDM enforces such arguments with respect to its own similarly
sensitive information. In the event Intuit notifies SDM that it has reasonable
grounds to believe there has been a violation of any such nondisclosure
agreement, or SDM itself believes such a violation may have occurred, SDM shall
take immediate steps to investigate such alleged violation, inform Intuit of
the results of such investigation and provide Intuit reasonable assistance in
resolving such issue.

(d)  Each of the parties acknowledges and agrees that a breach of the provisions
of this Section shall result in irreparable harm to the other and that the
other shall have the right to enforce this Agreement and any of its provisions
by injunction, specific performance and/or other equitable relief without
prejudice to any other rights and remedies that it may have.

(e)  Nothing in this Agreement or any separate Statement of Work shall relieve
any party of any of its obligations under any separate non-disclosure agreement
between the parties, including any obligation with respect to procedures for
handling customer data or other similarly sensitive information.

(f)  The parties agree that the obligations set forth in this section 10 shall
remain
in effect for three (3) years after the termination of this Agreement.

11. Representations and Warranties.

(a)  Each party to this Agreement represents and warrants that: (i) it is a
corporation duly incorporated, validly existing and in good standing; (ii) it
has all requisite corporate power and authority to execute, deliver and perform
its obligations hereunder; (iii) it is duly licensed, authorized or qualified
to do business and is in good standing in every jurisdiction in which a
license, authorization or qualification is required for the ownership or
leasing of its assets or the transaction of business of the character
transacted by it except when the failure to be so licensed, authorized or
qualified would not have a material, adverse effect on its ability to fulfill
its obligations hereunder; (iv) it shall comply with all laws and regulations
applicable to the performance of its obligations hereunder and shall obtain all
applicable permits and licenses required of it in connection with its
obligations hereunder; and (v) it is not a party to any agreement with a third
party, the performance of which is reasonably likely to affect adversely its
ability or the ability of the other party to perform fully its respective
obligations hereunder.

(b)  SDM represents and warrants that any and all Services rendered under this
Agreement and any Statement of Work shall be performed by SDM, including its
employees or its subcontractors, in a good and workmanlike fashion, in
accordance with commercially reasonable standards of competence within SDM’s
industry, and in conformance with any specifications for such Services as set
forth in the applicable Statement of Work. SDM further represents and warrants
that any CDs manufactured by SDM shall conform to agreed

9

 

 upon industry
standards as accepted by Intuit from samples provided by SDM, including
manufacturing standards, incoming sampling plans, and any such reasonable
revisions as may be made by mutual agreement of the parties during the Term of
this Agreement. SDM further represents and warrants that it has all right,
title and authority necessary to perform the Services and carry out its
responsibilities under this Agreement and each Statement of Work.

(c)  SDM represents and warrants that all materials provided for use by SDM
within any Deliverables shall not be Defective (as defined in section 4(c)
above) and
shall conform to the specifications, drawings, samples, descriptions and
quality standards set forth in the applicable Statement of Work. SDM further
represents and warrants that title to all Deliverables delivered under this
Agreement and any Statement of Work shall be free and clear of all liens,
encumbrances, security interests or other claims.

(d)  If at any time greater than two hundred parts per million (200 ppm) of any
Deliverables shipped by SDM under any separate Statement of Work fail to
conform to the performance specifications set forth in the applicable Statement
of Work, due to the same root cause failure (an “Epidemic Failure”), the
following remedies shall apply:

(i)  SDM shall replace the Deliverables affected by the Epidemic Failure
pursuant to the terms and time tables set forth in section 4(c) for defective
deliverable and Defective Shipments, and (ii) shall provide the remedies set
forth below , pursuant to the process set forth in section 5(b) with the
progression in remedies applying per the incidence of Epidemic Failures as set
forth below:

	 	 	 	 	 	 	 	 	 	 
	Incidence of Epidemic Failure	 	Launch Orders	 	Replenishment Orders
	
	 	
	 	

	 	1st time in a 30 day period
	 	Written corrective action report	 	Written corrective action report
	 	2nd time in a 30 day period
	 	 	10	%	 	 	5	%
	3rd (or additional) times in a 30 day period
	 	 	20	%	 	 	10	%

The percentages listed in the above table shall reflect the listed percentage
of the total amount SDM charges Intuit for Deliverables affected by the
Epidemic Failure.

The remedy provided by this Section shall be in addition to any other remedies
Intuit may possess and shall not be deemed to limit Intuit’s ability to seek
any other applicable relief. SDM shall also promptly provide a written
corrective action report
addressing the steps that will be taken to eliminate the cause of the problem.

(e)  EXCEPT FOR THE EXPRESS WARRANTIES MADE OR REFERENCED IN THIS AGREEMENT OR
ANY SEPARATE STATEMENT OF WORK, NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR
IMPLIED, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT OR ANY SEPARATE
STATEMENT OF WORK, AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE.

12. Indemnification.

(a)  SDM agrees to defend, indemnify and hold Intuit and its affiliates, and all
of their respective officers, directors, agents and employees, harmless from
and against any and all claims, including liabilities, actions, judgments,
costs, and expenses and reasonable attorneys’ fees (collectively “Claims”),
asserted by a third party arising out of or related to: (i) any breach or
alleged breach of any of SDM’s representations and warranties under this
Agreement or any separate Statement of Work; (ii) SDM’s negligent acts,
omissions and/or willful misconduct in supplying the Services or otherwise
performing its obligations under this Agreement or any separate Statement of
Work and (iii) any infringement or alleged infringement by SDM in the
performance of the Services or by any materials provided by SDM to Intuit
(excluding materials originally provided by Intuit or at Intuit’s direction)
with respect to any Deliverables or otherwise used in the production of such
Deliverables or the provision of the Services hereunder.

(b)  Intuit agrees to defend, indemnify and hold SDM and its affiliates, and all
of their respective officers, directors, agents and employees, harmless from
and against any and all Claims asserted by a third party arising out of or
related to: (i) any breach or alleged breach by Intuit of any of Intuit’s
representations and warranties under this Agreement or any separate Statement
of Work; (ii) the negligent acts, omissions and/or

10

 

 willful misconduct of Intuit
in using the Services or otherwise performing its obligations under this
Agreement or any separate Statement of Work; (iii) any infringement or alleged
infringement by any materials
provided by Intuit to SDM to be embodied on any Deliverables or otherwise used
in the production of such Deliverables or the provisions of the Services
hereunder; or (iv) the contents of the materials provided by Intuit or at
Intuit’s direction.

(c)  The party seeking indemnification under Section 12(a) or 12(b), as the case
may be (the “Indemnified Party”), shall give prompt written notice to the other
party (the “Indemnifying Party”). The failure by an Indemnified Party to give
notice as provided, above, shall not relieve the Indemnifying Party of its
obligations under this Section, except to the extent that the failure results
in the failure of actual notice and the Indemnifying Party is damaged as a
result of the failure to give notice. In addition, the Indemnified Party will
allow the Indemnifying Party to direct the defense and settlement of any such
claim, with counsel of the Indemnifying Party’s choosing, and will provide the
Indemnifying Party, at the Indemnifying Party’s expense, with information and
assistance that is reasonably necessary for the defense and settlement of the
claim. The Indemnified Party shall have the right to employ separate counsel
and to participate in (but not control) any such action, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party
unless: (i) the employment of counsel by the Indemnified Party has been
authorized by the Indemnifying Party; (ii) the Indemnified Party has been
advised by its counsel in writing that there is a conflict of interest between
the Indemnifying Party and the Indemnified Party in the conduct of the defense
of the action (in which case the Indemnifying Party shall not have the right to
direct the defense of the action on behalf of the Indemnified Party); or (iii)
the Indemnifying Party has not in fact employed counsel to assume the defense
of the action within a reasonable time following receipt of the notice given
pursuant to this Section, in each of which cases the fees and expenses of such
counsel shall be at the expense of the Indemnifying Party. An Indemnifying
Party shall not be liable for any settlement of an action effected without its
written consent (which consent shall not be unreasonably withheld), nor shall
an Indemnifying Party settle any such action without the written consent of the
Indemnified Party (which consent shall not be unreasonably withheld). No
Indemnifying Party shall consent to the entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to the Indemnified Party a release from all liability
with respect to
the claim.

13. Insurance. SDM shall, at SDM’s expense, maintain insurance policies that
cover SDM’s activities under this Agreement and each Statement of Work, and the
activities of SDM’s employees, agents and representatives, including, but not
limited to, workers compensation insurance and comprehensive general liability,
errors and omissions liability and media liability with minimum limits of
insurance of $5 million per claim and $20 million annual aggregate. Upon the
request of Intuit, SDM shall provide Intuit with a certificate of insurance
evidencing such coverage. In addition, SDM shall provide Intuit thirty (30)
days advance written notice of any cancellation or reduction in coverage or
limits.

14. Limitation of Liability

IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF
CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT
THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE; PROVIDED,
HOWEVER, THAT THIS RESTRICTION SHALL NOT IN ANY WAY LIMIT EITHER PARTY’S
INDEMNIFICATION OBLIGATIONS PURSUANT TO PARAGRAPH 12(a)(ii), (iii) AND
12(b)(ii)-(iv) AND ARISING FROM 11(a)(iv) ABOVE.

15. Disaster Recovery and Business Continuity. SDM shall implement and
maintain a disaster recovery plan and commercially reasonable business
continuity procedures. Such plan and procedures shall address, at a minimum,
documented disaster recovery and contingency plans, established backup cycles
for critical records, safe and secure storage for Intuit’s confidential
information and/or records, off-site storage for backups to ensure restoration
capability, detailed callout and escalation lists for management personnel,
adequate protection from environmental problems, documented procedures to
respond to and recover from common local environmental problems, redundancies
in equipment, and procedures for the transfer of data and the performance of
Services at alternative facilities, as well as
procedures in such other areas as reasonably deemed necessary by Intuit. SDM
shall provide Intuit with a reasonably detailed summary of such plan within
thirty (30) days of the Effective Date. At Intuit’s request, SDM and Intuit
shall review such summary from time to time during the Term (but in no event
more than once in any given calendar quarter), and SDM

11

 

 shall consider in good
faith any request by Intuit to update the underlying plan or procedures as
necessary to reflect changes in the character or quantity of Services being
performed by SDM for Intuit hereunder.

16. General.

(a)  Publicity. The parties may agree to issue joint press releases and other
appropriate announcements and presentations regarding the existence or
performance of this Agreement or any separate Statement of Work, the content
and timing of which shall be mutually agreed upon by the parties in writing.
Notwithstanding the foregoing, unless required by law, neither party will,
without the prior written approval of the other party, make any public
statement, press release, presentation, or other announcement relating to the
terms, existence of or performance by either party of its obligations under
this Agreement or any separate Statement of Work. Without limiting the
generality of the foregoing, neither party may issue press releases or
endorsements which reference the other party or include statements attributable
to the other party, and neither party may use any trademark or logo of the
other party, in each case without the prior written consent of the other party,
which consent must include (with respect to Intuit) the written approval of the
Corporate Communications Department and its legal counsel. No press release or
endorsement which references the other party or includes a statement by the
other party shall be made except as provided above.

(b)  Assignment. Neither party shall be entitled to assign this Agreement or
any separate Statement of Work, in whole or in part, without the other party’s
prior written consent, which consent shall not be unreasonably withheld, unless
an assignment is expressly agreed upon in a separate Statement of Work. Any
attempt by either party to assign this Agreement or any separate Statement of
Work other than as permitted above shall be null and void. Subject to the
foregoing, this Agreement and each Statement of Work shall be binding upon and
shall inure to the
benefit of both parties, their successors and permitted assigns.

(c)  Law and Jurisdiction. This Agreement and each separate Statement of Work
shall be governed by and construed in accordance with the laws of the State of
New York, other than such laws rules, regulations and case law that would
result in the application of the laws of a jurisdiction other than the State of
New York. The parties hereby consent to the exclusive jurisdiction and venue
in the state and federal courts of either Santa Clara County, California, or
Los Angeles County, California.

(d)  Notice. Unless otherwise stated, all notices required under this Agreement
and each separate Statement of Work shall be in writing and shall be considered
given (i) when delivered personally; (ii) five (5) days after mailing, when
sent certified mail, return receipt requested and postage prepaid; (iii) one
(1) business day after dispatch, when sent via a commercial overnight carrier,
fees prepaid; or (iv) upon delivery when sent by facsimile transmission
confirmed by telephone. All communications shall be addressed as follows
(unless changed by notice):

To SDM:

Sony Disc Manufacturing

1800 North Fruitridge Ave.

Terre Haute, Indiana 48704

Attn: Contract Administrator

Phone: 812-462-8100

Fax: 812-462-8687

	 	 	 
	To Intuit:	 	
with a copy to:
	
	
	
	

	Intuit Inc.

2700 Coast Avenue

Mountain View, California 94043

Attn: Operations Manager

Phone: (650) 944-2889

Fax: (650) 944-3551	 	
Intuit Inc.

2700 Coast Avenue

Mountain View, California 94043

Attn: General Counsel, Legal Dept.

Phone: (650) 944-6000

Fax: (650) 944-6622

(e)  Force Majeure. Except with respect to delays or failures caused by the
negligent act or omission of either party, any delay in or failure of
performance by either party under this Agreement or any separate Statement of
Work shall not be considered a breach of this Agreement or such Statement of
Work and shall be excused to the extent caused by any occurrence beyond the
reasonable control of such party including, but

12

 

 not limited to, acts of God,
power outages, and failures of the Internet, provided that the party affected
by such event shall immediately begin or resume performance as soon as
practicable after the event has abated. Excusable delays do not include
lockout, shortage of labor, lack of or inability to obtain raw materials, fuel
or supplies or any other industrial disturbance. In the event that SDM is not
able to resume performance within fifteen (15) days after the force majeure
event has commenced, Intuit shall have the right to terminate this Agreement
and/or the applicable Statement(s) of Work immediately upon written notice to
SDM.

(f)  Severability. If any provision of this Agreement or any separate Statement
of Work is found illegal or unenforceable, such provision shall be deemed
restated, in accordance with applicable law, to reflect as nearly as possible
the original intention of the parties, and the remainder of the Agreement or
such Statement of Work shall continue in full force and effect.

(g)  Entire Agreement. This Agreement, together with each separate Statement of
Work and any Purchase Orders issued in connection therewith, is the complete
and exclusive agreement between the parties with respect to the subject matter
hereof, superseding any prior agreements and communications (both written and
oral) regarding such subject matter. This Agreement (and each separate
Statement of Work and Purchase Order) may only be modified, or any rights under
it waived, by a written document executed by both parties.

(h)  No Third Party Beneficiaries. This Agreement and each separate Statement
of Work are intended for the sole and exclusive benefit of the signatories and
is not intended to benefit any third party.

(i)  Counterparts. This Agreement and each separate Statement of Work may be
executed in counterparts, each of shall constitute an original, and all of
which shall constitute one agreement.

(j)  Headings. The headings in this Agreement and each separate Statement of
Work are for convenience of reference only and have no legal effect.

IN WITNESS WHEREOF, the authorized representatives of the parties have
executed this Agreement as of the date of the later signature below.

	 	 	 	 	 
	SONY DISC MANUFACTURING
	INTUIT INC.
	
	
	
	

	By:	
/s/ ROBERT HURLEY
	 	By:
	/s/ KENNETH R. MUDGE
	
	
	
	

	Name:	
Robert Hurley
	 	Name:
	Kenneth R. Mudge
	
	
	
	

	Title:	
Senior Vice President
	 	Title:
	Vice President, Supply Chain
	
	
	
	

	Date:	
July 14, 2002
	 	Date:
	July 14, 2002

13<PAGE>
                                                                   EXHIBIT 10.10

WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document
================================================================================

                              AMENDED AND RESTATED

                            EFFECTIVE AUGUST 1, 2001

                                COPYRIGHT(C) 1997
                      BY COMPENSATION RESOURCE GROUP, INC.
                               ALL RIGHTS RESERVED

<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                PAGE
                                                                                ----
<S>                                                                            <C>
PURPOSE ......................................................................    1

ARTICLE 1     DEFINITIONS.....................................................    1

ARTICLE 2     SELECTION, ENROLLMENT, ELIGIBILITY..............................    8

        2.1   SELECTION BY COMMITTEE..........................................    8
        2.2   ENROLLMENT REQUIREMENTS.........................................    8
        2.3   ELIGIBILITY; COMMENCEMENT OF PARTICIPATION......................    8
        2.4   TERMINATION OF PARTICIPATION AND/OR DEFERRALS...................    8

ARTICLE 3     DEFERRAL COMMITMENTS/COMPANY MATCHING/CREDITING TAXES...........    9

        3.1   MINIMUM DEFERRALS...............................................    9
        3.2   MAXIMUM DEFERRAL................................................    9
        3.3   ELECTION TO DEFER; EFFECT OF ELECTION FORM......................   10
        3.4   WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS..........................   10
        3.5   ANNUAL COMPANY CONTRIBUTION AMOUNT..............................   11
        3.6   INVESTMENT OF TRUST ASSETS......................................   11
        3.7   VESTING.........................................................   11
        3.8   CREDITING/DEBITING OF ACCOUNT BALANCES..........................   11
        3.9   FICA AND OTHER TAXES............................................   15
        3.10  DISTRIBUTIONS...................................................   15

ARTICLE 4     SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES;
              WITHDRAWAL ELECTION.............................................   16

        4.1   SHORT-TERM PAYOUT...............................................   16
        4.2   OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM..................   16
        4.3   WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL
              EMERGENCIES.....................................................   16
        4.4   WITHDRAWAL ELECTION.............................................   17

ARTICLE 5     RETIREMENT BENEFIT..............................................   17

        5.1   RETIREMENT BENEFIT..............................................   17
        5.2   PAYMENT OF RETIREMENT BENEFIT...................................   17
        5.3   DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT.................   18

ARTICLE 6     PRE-RETIREMENT SURVIVOR BENEFIT.................................   18
</TABLE>

                                      -i-
<PAGE>
<TABLE>
<S>                                                                            <C>
        6.1   PRE-RETIREMENT SURVIVOR BENEFIT.................................   18
        6.2   PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT......................   18

ARTICLE 7     TERMINATION BENEFIT.............................................   19

        7.1   TERMINATION BENEFIT.............................................   19
        7.2   PAYMENT OF TERMINATION BENEFIT..................................   19

ARTICLE 8     DISABILITY WAIVER AND BENEFIT...................................   19

        8.1   DISABILITY WAIVER...............................................   19
        8.2   CONTINUED ELIGIBILITY; DISABILITY BENEFIT.......................   19

ARTICLE 9     BENEFICIARY DESIGNATION.........................................   21

        9.1   BENEFICIARY.....................................................   21
        9.2   BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT................   21
        9.3   ACKNOWLEDGEMENT.................................................   21
        9.4   NO BENEFICIARY DESIGNATION......................................   21
        9.5   DOUBT AS TO BENEFICIARY.........................................   21
        9.6   DISCHARGE OF OBLIGATIONS........................................   22

ARTICLE 10    LEAVE OF ABSENCE................................................   22

        10.1  PAID LEAVE OF ABSENCE...........................................   22
        10.2  UNPAID LEAVE OF ABSENCE.........................................   22

ARTICLE 11    TERMINATION, AMENDMENT OR MODIFICATION..........................   22

        11.1  TERMINATION.....................................................   22
        11.2  AMENDMENT.......................................................   23
        11.3  PLAN AGREEMENT..................................................   23
        11.4  EFFECT OF PAYMENT...............................................   24

ARTICLE 12    ADMINISTRATION..................................................   24

        12.1  COMMITTEE DUTIES................................................   24
        12.2  AGENTS..........................................................   24
        12.3  BINDING EFFECT OF DECISIONS.....................................   24
        12.4  INDEMNITY OF COMMITTEE..........................................   24
        12.5  EMPLOYER INFORMATION............................................   24

ARTICLE 13    OTHER BENEFITS AND AGREEMENTS...................................   25

        13.1  COORDINATION WITH OTHER BENEFITS................................   25
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<S>                                                                            <C>
ARTICLE 14    CLAIMS PROCEDURES...............................................   25

        14.1  PRESENTATION OF CLAIM...........................................   25
        14.2  NOTIFICATION OF DECISION........................................   25
        14.3  REVIEW OF A DENIED CLAIM........................................   26
        14.4  DECISION ON REVIEW..............................................   26
        14.5  LEGAL ACTION....................................................   26

ARTICLE 15    TRUST...........................................................   26

        15.1  ESTABLISHMENT OF THE TRUST......................................   27
        15.2  INTERRELATIONSHIP OF THE PLAN AND THE TRUST.....................   27
        15.3  DISTRIBUTIONS FROM THE TRUST....................................   27

ARTICLE 16    MISCELLANEOUS...................................................   27

        16.1  STATUS OF PLAN..................................................   27
        16.2  UNSECURED GENERAL CREDITOR......................................   27
        16.3  EMPLOYER'S LIABILITY............................................   27
        16.4  NONASSIGNABILITY................................................   28
        16.5  NOT A CONTRACT OF EMPLOYMENT....................................   28
        16.6  FURNISHING INFORMATION..........................................   28
        16.7  TERMS...........................................................   28
        16.8  CAPTIONS........................................................   28
        16.9  GOVERNING LAW...................................................   29
        16.10 NOTICE..........................................................   29
        16.11 SUCCESSORS......................................................   29
        16.12 SPOUSE'S INTEREST...............................................   29
        16.13 VALIDITY........................................................   29
        16.14 INCOMPETENT.....................................................   29
        16.15 COURT ORDER.....................................................   30
        16.16 DISTRIBUTION IN THE EVENT OF TAXATION...........................   31
        16.17 INSURANCE.......................................................   31
        16.18 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL............   31
</TABLE>

                                     -iii-
<PAGE>
                           WESTERN DIGITAL CORPORATION

                           DEFERRED COMPENSATION PLAN

                              Amended and Restated

                            Effective August 1, 2001

                                     PURPOSE

      The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of Western Digital Corporation a Delaware corporation, and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA. The Plan was originally
adopted effective May 16, 1994, previously amended and restated effective
January 9, 1997, then again effective January 1, 1998, and is hereby amended and
restated in its entirety effective August, 2001.

                                    ARTICLE 1
                                   DEFINITIONS

      For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:

1.1   "Account Balance" shall mean, with respect to a Participant, a credit on
      the records of the Employer equal to the sum of (i) the Deferral Account
      balance and (ii) the Company Contribution Account balance. The Account
      Balance, and each other specified account balance, shall be a bookkeeping
      entry only and shall be utilized solely as a device for the measurement
      and determination of the amounts to be paid to a Participant, or his or
      her designated Beneficiary, pursuant to this Plan.

1.2   "Annual Bonus" shall mean any compensation, in addition to Base Annual
      Salary relating to services performed during any calendar year, whether or
      not paid in such calendar year or included on the Federal Income Tax Form
      W-2 for such calendar year, payable to a Participant as an Employee under
      the Management Incentive Compensation Plan, Profit Sharing Plan (Cash
      Element) or Long-Term Incentive Plan.

1.3   "Annual Company Contribution Amount" shall mean, for any one Plan Year,
      the amount determined in accordance with Section 3.5.

1.4   "Annual Deferral Amount" shall mean that portion of a Participant's Base
      Annual Salary, Annual Bonus and Directors Fees that a Participant elects
      to have, and is deferred, in

                                      -1-
<PAGE>
      accordance with Article 3, for any one Plan Year. In the event of a
      Participant's Retirement, Disability (if deferrals cease in accordance
      with Section 8.1), death or a Termination of Employment prior to the end
      of a Plan Year, such year's Annual Deferral Amount shall be the actual
      amount withheld prior to such event.

1.5   "Annual Installment Method" shall be an annual installment payment over
      the number of years selected by the Participant in accordance with this
      Plan, calculated as follows: The vested Account Balance of the Participant
      shall be calculated as of the close of business on the last business day
      of the year. The annual installment shall be calculated by multiplying
      this balance by a fraction, the numerator of which is one, and the
      denominator of which is the remaining number of annual payments due the
      Participant. By way of example, if the Participant elects a 10 year Annual
      Installment Method, the first payment shall be 1/10 of the vested Account
      Balance, calculated as described in this definition. The following year,
      the payment shall be 1/9 of the vested Account Balance, calculated as
      described in this definition. Each annual installment shall be paid on or
      as soon as practicable after the last business day of the applicable year.

1.6   "Base Annual Salary" shall mean the annual cash compensation relating to
      services performed during any calendar year, whether or not paid in such
      calendar year or included on the Federal Income Tax Form W-2 for such
      calendar year, excluding bonuses, commissions, overtime, fringe benefits,
      stock options, relocation expenses, incentive payments, non-monetary
      awards, directors fees and other fees, automobile and other allowances
      paid to a Participant for employment services rendered (whether or not
      such allowances are included in the Employee's gross income). Base Annual
      Salary shall be calculated before reduction for compensation voluntarily
      deferred or contributed by the Participant pursuant to all qualified or
      non-qualified plans of any Employer and shall be calculated to include
      amounts not otherwise included in the Participant's gross income under
      Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans
      established by any Employer; provided, however, that all such amounts will
      be included in compensation only to the extent that, had there been no
      such plan, the amount would have been payable in cash to the Employee.

1.7   "Beneficiary" shall mean one or more persons, trusts, estates or other
      entities, designated in accordance with Article 9, that are entitled to
      receive benefits under this Plan upon the death of a Participant.

1.8   "Beneficiary Designation Form" shall mean the form established from time
      to time by the Committee that a Participant completes, signs and returns
      to the Committee to designate one or more Beneficiaries.

1.9   "Board" shall mean the board of directors of the Company.

                                      -2-
<PAGE>
1.10  "Change in Control" shall mean the first to occur of any of the following
      events:

      (a)   Any person (other than an Exempt Person), alone or together with
            its Affiliates and Associates, including any group of Persons
            which is deemed a "person" under Section 13(d)(3) of the Exchange
            Act, becomes the Beneficial Owner, directly or indirectly, of
            thirty-three and one-third percent or more of (i) the
            then-outstanding shares of the Company's common stock or (ii)
            securities representing thirty-three and one-third percent or more
            of the combined voting power of the Company's then outstanding
            voting securities;

      (b)   A change, during any period of two consecutive years, of a
            majority of the Board of the Company as constituted as of the
            beginning of such period, unless the election, or nomination for
            election by the Company's stockholders, of each director who was
            not a director at the beginning of such period was approved by
            vote of at least two-thirds of the Incumbent Directors then in
            office (for purposes hereof, "Incumbent Directors" shall consist
            of the directors holding office as of the effective date of this
            Plan and any person becoming a director subsequent to such date
            whose election, or nomination for election by the Company's
            stockholders, is approved by a vote of at least a majority of the
            incumbent Directors then in office);

      (c)   Consummation of any merger, consolidation, reorganization or other
            extraordinary transactions (or series of related transactions)
            involving the Company which results in the stockholders of the
            Company having power to vote in the ordinary election of directors
            immediately prior to such transaction (or series of related
            transactions) failing to beneficially own at least a majority of
            the securities of the Company having the power to vote in the
            ordinary election of directors which are outstanding after giving
            effect to such transaction (or series of related transactions); or

      (d)   The stockholders of the Company approve a plan of complete
            liquidation of the Company or the sale of substantially all of the
            assets of the Company; or

      (e)   Substantially all of the assets of the Company are sold or otherwise
            transferred to parties that are not within a "controlled group of
            corporations" (as defined in Code Section 1563) in which the Company
            is a member.

1.11  "Claimant" shall have the meaning set forth in Section 14.1.

1.12  "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
      from time to time.

1.13  "Committee" shall mean the committee described in Article 12.

                                      -3-
<PAGE>
1.14  "Company" shall mean Western Digital Corporation a Delaware corporation,
      and any successor to all or substantially all of the Company's assets or
      business.

1.15  "Company Common Stock" shall mean authorized and unissued shares or
      treasury shares of the Company's common stock.

1.16  "Company Contribution Account" shall mean (i) the sum of the Participant's
      Annual Company Contribution Amounts, plus (ii) amounts credited in
      accordance with all the applicable crediting provisions of this Plan that
      relate to the Participant's Company Contribution Account, less (iii) all
      distributions made to the Participant or his or her Beneficiary pursuant
      to this Plan that relate to the Participant's Company Contribution
      Account.

1.17  "Deduction Limitation" shall mean the following described limitation on a
      benefit that may otherwise be distributable pursuant to the provisions of
      this Plan. Except as otherwise provided, this limitation shall be applied
      to all distributions that are "subject to the Deduction Limitation" under
      this Plan. If an Employer determines in good faith prior to a Change in
      Control that there is a reasonable likelihood that any compensation paid
      to a Participant for a taxable year of the Employer would not be
      deductible by the Employer solely by reason of the limitation under Code
      Section 162(m), then to the extent deemed necessary by the Employer to
      ensure that the entire amount of any distribution to the Participant
      pursuant to this Plan prior to the Change in Control is deductible, the
      Employer may defer all or any portion of a distribution under this Plan.
      Any amounts deferred pursuant to this limitation shall continue to be
      credited/debited with additional amounts in accordance with Section 3.8
      below, even if such amount is being paid out in installments. The amounts
      so deferred and amounts credited thereon shall be distributed to the
      Participant or his or her Beneficiary (in the event of the Participant's
      death) at the earliest possible date, as determined by the Employer in
      good faith, on which the deductibility of compensation paid or payable to
      the Participant for the taxable year of the Employer during which the
      distribution is made will not be limited by Section 162(m), or if earlier,
      the effective date of a Change in Control. Notwithstanding anything to the
      contrary in this Plan, the Deduction Limitation shall not apply to any
      distributions made after a Change in Control.

1.18  "Deferral Account" shall mean (i) the sum of all of a Participant's Annual
      Deferral Amounts, plus (ii) amounts credited in accordance with all the
      applicable crediting provisions of this Plan that relate to the
      Participant's Deferral Account, less (iii) all distributions made to the
      Participant or his or her Beneficiary pursuant to this Plan that relate to
      his or her Deferral Account.

1.19  "Director" shall mean any member of the board of directors of any
      Employer.

                                      -4-
<PAGE>
1.20  "Directors Fees" shall mean the annual fees paid by any Employer,
      including retainer fees and meetings fees, as compensation for serving on
      the board of directors and, after January 8, 1997, shall include Directors
      Fees (Stock Element).

1.21  "Directors Fees (Stock Element)" shall mean that portion of Directors Fees
      paid in the form of shares of Company Common Stock and granted to
      Non-Employee Directors on a mandatory or elective basis under the terms of
      the Stock Plan after January 8, 1997.

1.22  "Disability" shall mean a period of disability during which a Participant
      qualifies for permanent disability benefits under the Participant's
      Employer's long-term disability plan, or, if a Participant does not
      participate in such a plan, a period of disability during which the
      Participant would have qualified for permanent disability benefits under
      such a plan had the Participant been a participant in such a plan, as
      determined in the sole discretion of the Committee. If the Participant's
      Employer does not sponsor such a plan, or discontinues to sponsor such a
      plan, Disability shall be determined by the Committee in its sole
      discretion.

1.23  "Disability Benefit" shall mean the benefit set forth in Article 8.

1.24  "Election Form" shall mean the form established from time to time by the
      Committee that a Participant completes, signs and returns to the Committee
      to make an election under the Plan.

1.25  "Employee" shall mean a person who is an employee of any Employer.

1.26  "Employer(s)" shall mean the Company and/or any of its subsidiaries (now
      in existence or hereafter formed or acquired) that have been selected by
      the Board to participate in the Plan and have adopted the Plan as a
      sponsor.

1.27  "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
      it may be amended from time to time.

1.28  "First Plan Year" shall mean the period beginning May 16, 1994 and ending
      December 31, 1994.

1.29  "Long-Term Incentive Plan" shall mean the Western Digital Corporation
      Long-Term Incentive Plan.

1.30  "Management Incentive Plan" shall mean the Western Digital Corporation
      Management Incentive Plan.

1.31  "Participant" shall mean any Employee or Director (i) who is selected to
      participate in the Plan, (ii) who elects to participate in the Plan, (iii)
      who signs a Plan Agreement, an

                                      -5-
<PAGE>
      Election Form and a Beneficiary Designation Form, (iv) whose signed Plan
      Agreement, Election Form and Beneficiary Designation Form are accepted by
      the Committee, (v) who commences participation in the Plan, and (vi) whose
      Plan Agreement has not terminated. A spouse or former spouse of a
      Participant shall not be treated as a Participant in the Plan or have an
      account balance under the Plan, even if he or she has an interest in the
      Participant's benefits under the Plan as a result of applicable law or
      property settlements resulting from legal separation or divorce.

1.32  "Plan" shall mean the Western Digital Corporation Deferred Compensation
      Plan, originally adopted effective May 16, 1994, amended and restated in
      its entirety January 9, 1997, and further amended and restated in its
      entirety effective January 1, 1998, which shall be evidenced by this
      instrument and by each Plan Agreement, as they may be amended from time to
      time.

1.33  "Plan Agreement" shall mean a written agreement, as may be amended from
      time to time, which is entered into by and between an Employer and a
      Participant. Each Plan Agreement executed by a Participant and the
      Participant's Employer shall provide for the entire benefit to which such
      Participant is entitled under the Plan; should there be more than one Plan
      Agreement, the Plan Agreement bearing the latest date of acceptance by the
      Employer shall supersede all previous Plan Agreements in their entirety
      and shall govern such entitlement. The terms of any Plan Agreement may be
      different for any Participant, and any Plan Agreement may provide
      additional benefits not set forth in the Plan or limit the benefits
      otherwise provided under the Plan; provided, however, that any such
      additional benefits or benefit limitations must be agreed to by both the
      Employer and the Participant.

1.34  "Plan Year" shall, except for the First Plan Year, mean a period beginning
      on January 1 of each calendar year and continuing through December 31 of
      such calendar year.

1.35  "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
      Article 6.

1.36  "Profit Sharing Plan (Cash Element)" shall mean the portion of the Western
      Digital Corporation Profit Sharing Plan which, in accordance with its
      terms, pays benefits in cash.

1.37  "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
      Employee, severance from employment from all Employers for any reason
      other than a leave of absence, death or Disability on or after the
      attainment of age fifty-five (55); and shall mean with respect to a
      Director who is not an Employee, severance of his or her directorships
      with all Employers on or after the later of (a) the attainment of age
      seventy (70), or (b) in the sole discretion of the Committee, an age later
      than age seventy (70). If a Participant is both an Employee and a
      Director, Retirement shall not occur until he or she Retires as both an
      Employee and a Director, which Retirement shall be deemed to be a
      Retirement as a Director; provided, however, that such a Participant may
      elect, at least three years prior to Retirement and in

                                      -6-
<PAGE>
      accordance with the policies and procedures established by the Committee,
      to Retire for purposes of this Plan at the time he or she Retires as an
      Employee, which Retirement shall be deemed to be a Retirement as an
      Employee. In this regard, a Participant shall be deemed to cease being
      employed by an Employer if and when the Employer employing such
      Participant ceases to be a majority owned subsidiary of the Company and
      the Board provides that such event shall be treated as a cessation of
      employment by all Employers.

1.38  "Retirement Benefit" shall mean the benefit set forth in Article 5.

1.39  "Short-Term Payout" shall mean the payout set forth in Section 4.1.

1.40  "Stock Plan" shall mean the Western Digital Corporation Non-Employee
      Directors Stock-For-Fees Plan, as amended and restated effective
      January 9, 1997.

1.41  "Termination Benefit" shall mean the benefit set forth in Article 7.

1.42  "Termination of Employment" shall mean the severing of employment with all
      Employers, or service as a Director of all Employers, voluntarily or
      involuntarily, for any reason other than Retirement, Disability, death or
      an authorized leave of absence. If a Participant is both an Employee and a
      Director, a Termination of Employment shall occur only upon the
      termination of the last position held; provided, however, that such a
      Participant may elect, at least three years before Termination of
      Employment and in accordance with the policies and procedures established
      by the Committee, to be treated for purposes of this Plan as having
      experienced a Termination of Employment at the time he or she ceases
      employment with an Employer as an Employee. In this regard, a Participant
      shall be deemed to cease being employed by an Employer if and when the
      Employer employing such Participant ceases to be a majority owned
      subsidiary of the Company and the Board provides that such event shall be
      treated as a cessation of employment by all Employers.

1.43  "Trust" shall mean one or more trusts established pursuant to that certain
      Master Trust Agreement, dated as of May 16, 1994 between the Company and
      the trustee named therein, as amended from time to time.

1.44  "Unforeseeable Financial Emergency" shall mean an unanticipated emergency
      that is caused by an event beyond the control of the Participant that
      would result in severe financial hardship to the Participant resulting
      from (i) a sudden and unexpected illness or accident of the Participant or
      a dependent of the Participant, (ii) a loss of the Participant's property
      due to casualty, or (iii) such other extraordinary and unforeseeable
      circumstances arising as a result of events beyond the control of the
      Participant, all as determined in the sole discretion of the Committee.

                                      -7-
<PAGE>
                                    ARTICLE 2
                       SELECTION, ENROLLMENT, ELIGIBILITY

2.1   SELECTION BY COMMITTEE. Participation in the Plan shall be limited to a
      select group of management and highly compensated Employees and Directors
      of the Employers, as determined by the Committee in its sole discretion.
      From that group, the Committee shall select, in its sole discretion,
      Employees and Directors to participate in the Plan.

2.2   ENROLLMENT REQUIREMENTS. As a condition to participation, for the First
      Plan Year, each selected Employee or Director shall complete, execute and
      return to the Committee any time prior to May 16, 1994, a Plan Agreement,
      an Election Form and a Beneficiary Designation Form. Individuals initially
      selected to participate after May 16, 1994 may commence participation by
      completing, executing and returning to the Committee a Plan Agreement, an
      Election Form and a Beneficiary Designation Form, all within 30 days of
      selection. In addition, the Committee shall establish from time to time
      such other enrollment requirements as it determines in its sole discretion
      are necessary.

2.3   ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee or
      Director selected to participate in the Plan has met all enrollment
      requirements set forth in this Plan and required by the Committee,
      including returning all required documents to the Committee within the
      specified time period, that Employee or Director shall commence
      participation in the Plan on May 16, 1994, or, in the case of those
      selected for participation after that date, the May 1, or January 1
      immediately following the date in which the Employee or Director completes
      all enrollment requirements, provided that a Director who is elected or
      appointed other than at an annual stockholders meeting may commence
      participation on the date he or she joins the Board, subject to new
      elections for each succeeding Plan Year pursuant to Section 3.3. If an
      Employee or a Director fails to meet all such requirements within the
      period required, in accordance with Section 2.2, that Employee or Director
      shall not be eligible to participate in the Plan until the first day of
      the Plan Year following the delivery to and acceptance by the Committee of
      the required documents.

2.4   TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee determines
      in good faith that a Participant no longer qualifies as a member of a
      select group of management or highly compensated employees, as membership
      in such group is determined in accordance with Sections 201(2), 301(a)(3)
      and 401(a)(1) of ERISA, the Committee shall have the right, in its sole
      discretion, to (i) terminate any deferral election the Participant has
      made for the remainder of the Plan Year in which the Participant's
      membership status changes, (ii) prevent the Participant from making future
      deferral elections and/or (iii) immediately distribute the Participant's
      then vested Account Balance as a Termination Benefit and terminate the
      Participant's participation in the Plan.

                                      -8-
<PAGE>
                                    ARTICLE 3
           DEFERRAL COMMITMENTS/COMPANY CONTRIBUTION/CREDITING/TAXES

3.1   MINIMUM DEFERRALS.

      (a)   BASE ANNUAL SALARY, ANNUAL BONUS AND DIRECTOR'S FEES. For each Plan
            Year, a Participant may elect to defer, as his or her Annual
            Deferral Amount, Base Annual Salary, Annual Bonus and/or Director's
            Fees in the following minimum amounts for each deferral elected:

<TABLE>
<CAPTION>
                          DEFERRAL          MINIMUM AMOUNT
                          --------          --------------
<S>                                         <C>
                      Base Annual Salary        $2,000
                      Annual Bonus              $2,000
                      Directors Fees            $    0
</TABLE>

            If an election is made for less than stated minimum amounts, or if
            no election is made, the amount deferred shall be zero.

      (b)   SHORT PLAN YEAR. Notwithstanding the foregoing, if a Participant
            first becomes a Participant after the first day of a Plan Year, or
            in the case of the First Plan Year of the Plan, the minimum Base
            Annual Salary deferral shall be an amount equal to the minimum set
            forth above, multiplied by a fraction, the numerator of which is the
            number of complete months remaining in the Plan Year and the
            denominator of which is 12.

3.2   MAXIMUM DEFERRAL.

      (a)   BASE ANNUAL SALARY, ANNUAL BONUS AND DIRECTORS FEES. For each Plan
            Year, a Participant may elect to defer, as his or her Annual
            Deferral Amount, Base Annual Salary, Annual Bonus and/or Directors
            Fees up to the following maximum percentages for each deferral
            elected:

<TABLE>
<CAPTION>
                 DEFERRAL          MAXIMUM AMOUNT
                 --------          --------------
<S>                                <C>
             Base Annual Salary         100%
             Annual Bonus               100%
             Directors Fees             100%
</TABLE>

      (b)   Notwithstanding the foregoing, if a Participant first becomes a
            Participant after the first day of a Plan Year, or in the case of
            the First Plan Year, the maximum Annual Deferral Amount, with
            respect to Base Annual Salary, Annual Bonus and Directors Fees shall
            be limited to the amount of compensation not yet earned by the
            Participant as of the date the Participant submits a Plan Agreement
            and Election Form to the Committee for acceptance.

                                      -9-
<PAGE>
3.3   ELECTION TO DEFER; EFFECT OF ELECTION FORM.

      (a)   FIRST PLAN YEAR. In connection with a Participant's commencement of
            participation in the Plan, the Participant shall make an irrevocable
            deferral election for the Plan Year in which the Participant
            commences participation in the Plan, along with such other elections
            as the Committee deems necessary or desirable under the Plan. For
            these elections to be valid, the Election Form must be completed and
            signed by the Participant, timely delivered to the Committee (in
            accordance with Section 2.2 above) and accepted by the Committee.

      (b)   SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an irrevocable
            deferral election for that Plan Year, and such other elections as
            the Committee deems necessary or desirable under the Plan, shall be
            made by timely delivering to the Committee, in accordance with its
            rules and procedures, before the end of the Plan Year preceding the
            Plan Year for which the election is made, a new Election Form;
            provided that any deferral election in respect of Directors Fees for
            the 1997 Plan Year may be made on or before January 31, 1997. If no
            such Election Form is timely delivered for a Plan Year, the Annual
            Deferral Amount shall be zero for that Plan Year.

3.4   WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the Base
      Annual Salary portion of the Annual Deferral Amount shall be withheld from
      each regularly scheduled Base Annual Salary payroll in equal amounts, as
      adjusted from time to time for increases and decreases in Base Annual
      Salary. The Annual Bonus and/or Directors Fees portion of the Annual
      Deferral Amount shall be withheld at the time the Annual Bonus or
      Directors Fees are or otherwise would be paid to the Participant, whether
      or not this occurs during the Plan Year itself.

3.5   ANNUAL COMPANY CONTRIBUTION AMOUNT. For each Plan Year, the Board, in its
      sole discretion, may, but is not required to, credit any amount it desires
      to any Participant's Company Contribution Account under this Plan, which
      amount shall be for that Participant the Annual Company Contribution
      Amount for that Plan Year. The amount so credited to a Participant may be
      smaller or larger than the amount credited to any other Participant, and
      the amount credited to any Participant for a Plan Year may be zero, even
      though one or more other Participants receive an Annual Company
      Contribution Amount for that Plan Year. The Annual Company Contribution
      Amount, if any, shall be credited as of the last day of the Plan Year. If
      a Participant is not employed by an Employer as of the last day of a Plan
      Year other than by reason of his or her Retirement or death while
      employed, the Annual Company Contribution Amount for that Plan Year shall
      be zero. Notwithstanding the foregoing, the Company shall credit to the
      Account Balances of Participants who are non-employee Directors an Annual
      Company Contribution Amount each Plan Year

                                      -10-
<PAGE>
      representing the 15 percent premium awarded under Section 7(b) of the
      Stock Plan (the "Premium Award"), which amount shall be credited at such
      times as the Company shall determine.

3.6   INVESTMENT OF TRUST ASSETS. The Trustee of the Trust shall be authorized,
      upon written instructions received from the Committee or investment
      manager appointed by the Committee, to invest and reinvest the assets of
      the Trust in accordance with the applicable Trust Agreement, including the
      disposition of stock and reinvestment of the proceeds in one or more
      investment vehicles designated by the Committee.

3.7   VESTING.

      (a)   A Participant shall at all times be 100% vested in his or her
            Deferral Account.

      (b)   Except as otherwise provided in this Section 3.7, a Participant
            shall be vested in his or her Company Contribution Account in
            accordance with the provisions governing employer contributions
            under the Company's qualified 401(k) plan.

      (c)   A Participant shall at all times be 100% vested in the portion of
            his or her Deferral Account attributable to the Premium Award(s).

      (d)   Notwithstanding anything to the contrary contained in this Section
            3.7, in the event of his or her Retirement, Disability or a Change
            in Control, a Participant's Company Contribution Account shall
            immediately become 100% vested (if it is not already vested in
            accordance with this Section 3.7).

3.8   CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and subject
      to, the rules and procedures that are established from time to time by the
      Committee, in its sole discretion, amounts shall be credited or debited to
      a Participant's Account Balance in accordance with the following rules:

      (a)   ELECTION OF MEASUREMENT FUNDS. Except as otherwise provided in
            Section 3.8 (d) or Section 3.8(e) below, a Participant, in
            connection with his or her initial deferral election in accordance
            with Section 3.3(a) above, shall elect, on the Election Form, one or
            more Measurement Fund(s) (as described in Section 3.8(c) below) to
            be used to determine the additional amounts to be credited to his or
            her Account Balance for the first day thereof in which the
            Participant commences participation in the Plan and continuing
            thereafter for each subsequent day in which

                                      -11-
<PAGE>
            the Participant participates in the Plan, unless changed in
            accordance with the next sentence. Except as otherwise provided in
            Section 3.8(d) or Section 3.8(e) below, commencing with the first
            day that follows the Participant's commencement of participation in
            the Plan and continuing thereafter for each subsequent day in which
            the Participant participates in the Plan, no later than the prior
            business day, the Participant may (but is not required to) elect, by
            submitting an Election Form to the Committee that is accepted by the
            Committee, to add or delete one or more Measurement Fund(s) to be
            used to determine the additional amounts to be credited to his or
            her Account Balance, or to change the portion of his or her Account
            Balance allocated to each previously or newly elected Measurement
            Fund; provided, however, that a Participant may make no more than
            two (2) such elections each Plan Year. If an election is made in
            accordance with the previous sentence, it shall apply to the next
            day and continue thereafter for each subsequent day in which the
            Participant participates in the Plan, unless changed in accordance
            with the previous sentence.

      (b)   PROPORTIONATE ALLOCATION. In making any election described in
            Section 3.8(a) above, the Participant shall specify on the Election
            Form, in increments of five percentage points (5%), the percentage
            of his or her Account Balance to be allocated to a Measurement Fund
            (as if the Participant was making an investment in that Measurement
            Fund with that portion of his or her Account Balance and Annual
            Deferral Amount).

      (c)   MEASUREMENT FUNDS. Except as otherwise provided in Section 3.8(d) or
            Section 3.8(e) below, the Participant may elect one or more of the
            following measurement funds, based on certain mutual funds (the
            "Measurement Funds"), for the purpose of crediting additional
            amounts to his or her Account Balance:

            (1)   Fidelity VIP Money Market Portfolio (described as a mutual
                  fund seeking a high level of current income as is consistent
                  with preserving capital and providing liquidity);

            (2)   Fidelity VIP II Index 500 Portfolio (described as a mutual
                  fund which seeks to achieve investment results corresponding
                  to the total return of common stocks publicly traded in the
                  United States);

            (3)   Neuberger & Berman Management Inc. AMT Partners Portfolio
                  (described as a mutual fund which seeks long-term growth of
                  capital primarily through investments in common stocks);

            (4)   Fred Alger Management Inc. Small Capitalization Portfolio
                  (described as a mutual fund which seeks long-term growth of
                  capital primarily through investments in small
                  capitalization common stocks); and

                                      -12-
<PAGE>
            (5)   Declared Rate Fund (described as a fund which is credited with
                  interest at a fixed rate declared as an annual rate for each
                  Plan Year by the Company prior to the beginning of the Plan
                  Year).

            As necessary, the Committee may, in its sole discretion,
            discontinue, substitute or add a Measurement Fund. Each such action
            will take effect as of the first day of the calendar quarter that
            follows by thirty (30) days the day on which the Committee gives
            Participants advance written notice of such change.

                                      -13-
<PAGE>
      (d)   MINIMUM PERCENTAGE FOR DECLARED RATE MEASUREMENT FUND.
            Notwithstanding any provision of this Plan, other than Section
            3.8(e) below, that may be construed to the contrary, effective
            January 1, 1998, a Participant's Account Balance as of such date
            shall be allocated to the Declared Rate Measurement Fund. Except as
            otherwise provided in Section 3.8(e) below, effective January 2,
            1998, at all times during a Plan Year, a Participant must allocate a
            minimum percentage of his or her existing Account Balance and Annual
            Deferral Amount to the Declared Rate Measurement Fund (the "Minimum
            Percentage"). The Minimum Percentage for a Plan Year (i) must be
            fifty percent (50%) for the 1998 Plan Year, (ii) must be determined
            by the Committee, in its sole discretion, and announced prior to the
            beginning of any other Plan Year, (iii) may be higher or lower than
            the Minimum Percentage for any other Plan Year and (iv) may be zero
            for any other Plan Year.

      (e)   COMPANY STOCK MEASUREMENT FUND FOR DIRECTORS' FEES (STOCK
            ELEMENT). Notwithstanding any provision of this Plan that may be
            construed to the contrary, the portion of a Participant's Deferral
            Account balance attributable to his or her deferral of Directors'
            Fees (Stock Element) and the portion of a Participant's Company
            Contribution Account balance attributable to the Premium Award(s),
            as that term is defined in Section 3.5 above, must be (i) deemed
            invested at all times prior to distribution in the Company Stock
            Measurement Fund and (ii) distributed, in the form of Company
            Common Stock, as a lump sum at the time distribution to the
            Participant or his or her Beneficiary(ies) is to commence.  For
            purposes of this Section 3.8(e), the Company Stock Measurement
            Fund is described as a fund which shall be credited or debited
            with investment results corresponding to the total return of
            Company Common Stock.

      (f)   CREDITING OR DEBITING METHOD. The performance of each elected
            Measurement Fund (either positive or negative) will be determined by
            the Committee, in its reasonable discretion, based on the
            performance of the Measurement Funds themselves. A Participant's
            Account Balance shall be credited or debited on a daily basis based
            on the performance of each Measurement Fund selected by the
            Participant, as determined by the Committee in its sole discretion,
            as though (i) a Participant's Account Balance were invested in the
            Measurement Fund(s) selected by the Participant, in the percentages
            applicable to such calendar date, at the closing price on such date;
            (ii) the portion of the Annual Deferral Amount that was actually
            deferred during any calendar date were invested in the Measurement
            Fund(s) selected by the Participant, in the percentages applicable
            to such calendar date, no later than the close of business on the
            third business day after the day on which such amounts are actually
            deferred from the Participant's Base Annual Salary through
            reductions in his or her payroll, at the closing price on such date;
            and (iii) any distribution made to a Participant that decreases such
            Participant's Account

                                      -14-
<PAGE>
            Balance ceased being invested in the Measurement Fund(s), in the
            percentages applicable to such calendar date, no earlier than three
            business days prior to the distribution, at the closing price on
            such date.

      (g)   NO ACTUAL INVESTMENT. Notwithstanding any other provision of this
            Plan that may be interpreted to the contrary, the Measurement Funds
            are to be used for measurement purposes only, and a Participant's
            election of any such Measurement Fund, the allocation to his or her
            Account Balance thereto, the calculation of additional amounts and
            the crediting or debiting of such amounts to a Participant's Account
            Balance shall not be considered or construed in any manner as an
            actual investment of his or her Account Balance in any such
            Measurement Fund. In the event that the Company or the Trustee (as
            that term is defined in the Trust), in its own discretion, decides
            to invest funds in any or all of the Measurement Funds, no
            Participant shall have any rights in or to such investments
            themselves. Without limiting the foregoing, a Participant's Account
            Balance shall at all times be a bookkeeping entry only and shall not
            represent any investment made on his or her behalf by the Company or
            the Trust; the Participant shall at all times remain an unsecured
            creditor of the Company.

3.9   FICA AND OTHER TAXES.

      (a)   ANNUAL DEFERRAL AMOUNTS. For each Plan Year in which an Annual
            Deferral Amount is being withheld from a Participant, the
            Participant's Employer(s) shall withhold from that portion of the
            Participant's Base Annual Salary and Bonus that is not being
            deferred, in a manner determined by the Employer(s), the
            Participant's share of FICA and other employment taxes on such
            Annual Deferral Amount. If necessary, the Committee may reduce the
            Annual Deferral Amount in order to comply with this Section 3.9.

      (b)   ANNUAL COMPANY CONTRIBUTION AMOUNTS. When a participant becomes
            vested in a portion of his or her Company Contribution Account, the
            Participant's Employer(s) shall withhold from the Participant's Base
            Annual Salary and/or Bonus that is not deferred, in a manner
            determined by the Employer(s), the Participant's share of FICA and
            other employment taxes. If necessary, the Committee may reduce the
            vested portion of the Participant's Company Contribution Account in
            order to comply with this Section 3.9.

3.10  DISTRIBUTIONS. The Participant's Employer(s), or the trustee of the Trust,
      shall withhold from any payments made to a Participant under this Plan all
      federal, state and local income, employment and other taxes required to be
      withheld by the Employer(s), or the trustee of the Trust, in connection
      with such payments, in amounts and in a manner to be determined in the
      sole discretion of the Employer(s) and the trustee of the Trust.

                                      -15-
<PAGE>
                                    ARTICLE 4
  SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION

4.1   SHORT-TERM PAYOUT. In connection with each election to defer an Annual
      Deferral Amount, a Participant may irrevocably elect to receive a future
      "Short-Term Payout" from the Plan with respect to such Annual Deferral
      Amount. Subject to the Deduction Limitation, the Short-Term Payout shall
      be a lump sum payment in an amount that is equal to the Annual Deferral
      Amount plus amounts credited or debited in the manner provided in Section
      3.9 above on that amount, determined at the time that the Short-Term
      Payout becomes payable (rather than the date of a Termination of
      Employment). Subject to the Deduction Limitation and the other terms and
      conditions of this Plan, each Short-Term Payout elected shall be paid
      within a 60 days after the first day of any Plan Year designated by the
      Participant that is at least three Plan Years after the Plan Year in which
      the Annual Deferral Amount is actually deferred. Notwithstanding the
      foregoing, the Participant may irrevocably elect to defer the distribution
      of a Short-Term Payout to the first 60 days of another Plan Year
      designated by the Participant that is at least two Plan Years after the
      Plan Year in which such Short-Term Payout would otherwise be paid,
      provided such election is made no later than the first day of the Plan
      Year immediately proceeding the Plan Year in which the Short-Term Payout
      would otherwise be paid.

4.2   OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM. Should an event occur that
      triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral Amount,
      plus amounts credited or debited thereon, that is subject to a Short-Term
      Payout election under Section 4.1 shall not be paid in accordance with
      Section 4.1 but shall be paid in accordance with the other applicable
      Article.

4.3   WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES. If
      the Participant experiences an Unforeseeable Financial Emergency, the
      Participant may petition the Committee to (i) suspend any deferrals
      required to be made by a Participant and/or (ii) receive a partial or full
      payout from the Plan. The payout shall not exceed the lesser of the
      Participant's vested Account Balance, calculated as if such Participant
      were receiving a Termination Benefit, or the amount reasonably needed to
      satisfy the Unforeseeable Financial Emergency. If, subject to the sole
      discretion of the Committee, the petition for a suspension and/or payout
      is approved, suspension shall take effect upon the date of approval and
      any payout shall be made within 60 days of the date of approval. The
      payment of any amount under this Section 4.3 shall not be subject to the
      Deduction Limitation.

4.4   WITHDRAWAL ELECTION. A Participant (or, after a Participant's death, his
      or her Beneficiary) may elect, at any time, to withdraw all of his or her
      vested Account Balance, calculated as if there had occurred a Termination
      of Employment as of the day of the election, less a

                                      -16-
<PAGE>
      withdrawal penalty equal to 10% of such amount (the net amount shall be
      referred to as the "Withdrawal Amount"). This election can be made at any
      time, before or after Retirement, Disability, death or Termination of
      Employment, and whether or not the Participant (or Beneficiary) is in the
      process of being paid pursuant to an installment payment schedule. If made
      before Retirement, Disability or death, a Participant's Withdrawal Amount
      shall be his or her Account Balance calculated as if there had occurred a
      Termination of Employment as of the day of the election. No partial
      withdrawals of the Withdrawal Amount shall be allowed. The Participant (or
      his or her Beneficiary) shall make this election by giving the Committee
      advance written notice of the election in a form determined from time to
      time by the Committee. The Participant (or his or her Beneficiary) shall
      be paid the Withdrawal Amount within 60 days of his or her election. Once
      the Withdrawal Amount is paid, the Participant's participation in the Plan
      shall terminate and the Participant shall not be eligible to participate
      in the Plan in the future. The payment of this Withdrawal Amount shall not
      be subject to the Deduction Limitation.

                                    ARTICLE 5
                               RETIREMENT BENEFIT

5.1   RETIREMENT BENEFIT. Subject to the Deduction Limitation, a Participant who
      Retires shall receive, as a Retirement Benefit, his or her vested Account
      Balance.

5.2   PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his or
      her commencement of participation in the Plan, shall elect on an Election
      Form to receive the Retirement Benefit in a lump sum or pursuant to an
      Annual Installment Method of 5, 10, 15 or 20 years. The Participant may
      annually change his or her election to an allowable alternative payout
      period by submitting a new Election Form to the Committee, provided that
      any such Election Form is submitted at least 3 years prior to the
      Participant's Retirement and is accepted by the Committee in its sole
      discretion. The Election Form most recently accepted by the Committee
      shall govern the payout of the Retirement Benefit. If a Participant does
      not make any election with respect to the payment of the Retirement
      Benefit, then such benefit shall be payable in a lump sum. The lump sum
      payment shall be made, or installment payments shall commence, no later
      than 60 days after the last day of the Plan Year in which the Participant
      Retires. Any payment made shall be subject to the Deduction Limitation.

5.3   DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies
      after Retirement but before the Retirement Benefit is paid in full, the
      Participant's unpaid Retirement Benefit payments shall continue and shall
      be paid to the Participant's Beneficiary (a) over the remaining number of
      years and in the same amounts as that benefit would have been paid to the
      Participant had the Participant survived, or (b) in a lump sum, if
      requested by

                                      -17-
<PAGE>
      the Beneficiary and allowed in the sole discretion of the Committee, that
      is equal to the Participant's unpaid remaining vested Account Balance.

                                    ARTICLE 6
                         PRE-RETIREMENT SURVIVOR BENEFIT

6.1   PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction Limitation, the
      Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit
      equal to the Participant's vested Account Balance if the Participant dies
      before he or she Retires, experiences a Termination of Employment or
      suffers a Disability.

6.2   PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant, in connection
      with his or her commencement of participation in the Plan, shall elect on
      an Election Form whether the Pre-Retirement Survivor Benefit shall be
      received by his or her Beneficiary in a lump sum or pursuant to an Annual
      Installment Method of 5, 10, 15 or 20 years. The Participant may annually
      change this election to an allowable alternative payout period by
      submitting a new Election Form to the Committee, which form must be
      accepted by the Committee in its sole discretion. The Election Form most
      recently accepted by the Committee prior to the Participant's death shall
      govern the payout of the Participant's Pre-Retirement Survivor Benefit. If
      a Participant does not make any election with respect to the payment of
      the Pre-Retirement Survivor Benefit, then such benefit shall be paid in a
      lump sum. Despite the foregoing, if the Participant's vested Account
      Balance at the time of his or her death is less than $25,000, payment of
      the Pre-Retirement Survivor Benefit may be made, in the sole discretion of
      the Committee, in a lump sum or pursuant to an Annual Installment Method
      of not more than 5 years. The lump sum payment shall be made, or
      installment payments shall commence, no later than 60 days after the last
      day of the Plan Year in which the Committee is provided with proof that is
      satisfactory to the Committee of the Participant's death. Any payment made
      shall be subject to the Deduction Limitation.

                                    ARTICLE 7
                               TERMINATION BENEFIT

7.1   TERMINATION BENEFIT. Subject to the Deduction Limitation, the Participant
      shall receive a Termination Benefit, which shall be equal to the
      Participant's vested Account Balance if a Participant experiences a
      Termination of Employment prior to his or her Retirement, death or
      Disability.

7.2   PAYMENT OF TERMINATION BENEFIT. The Termination of Employment shall be
      paid in a lump sum within 60 days of the Termination of Employment.

                                      -18-
<PAGE>
                                    ARTICLE 8
                          DISABILITY WAIVER AND BENEFIT

8.1   DISABILITY WAIVER.

      (a)   WAIVER OF DEFERRAL. A Participant who is determined by the Committee
            to be suffering from a Disability shall be excused from fulfilling
            that portion of the Annual Deferral Amount commitment that would
            otherwise have been withheld from a Participant's Base Annual
            Salary, Annual Bonus and/or Directors Fees for the Plan Year during
            which the Participant first suffers a Disability. During the period
            of Disability, the Participant shall not be allowed to make any
            additional deferral elections, but will continue to be considered a
            Participant for all other purposes of this Plan.

      (b)   RETURN TO WORK. If a Participant returns to employment, or service
            as a Director, with an Employer, after a Disability ceases, the
            Participant may elect to defer an Annual Deferral Amount for the
            Plan Year following his or her return to employment or service and
            for every Plan Year thereafter while a Participant in the Plan;
            provided such deferral elections are otherwise allowed and an
            Election Form is delivered to and accepted by the Committee for each
            such election in accordance with Section 3.3 above.

8.2   CONTINUED ELIGIBILITY; DISABILITY BENEFIT. A Participant suffering a
      Disability shall, for benefit purposes under this Plan, continue to be
      considered to be employed, or in the service of an Employer as a Director,
      and shall be eligible for the benefits provided for in Articles 4, 5, 6 or
      7 in accordance with the provisions of those Articles. Notwithstanding the
      above, the Committee shall have the right to, in its sole and absolute
      discretion and for purposes of this Plan only, and must in the case of a
      Participant who is otherwise eligible to Retire, deem the Participant to
      have experienced a Termination of Employment, or in the case of a
      Participant who is eligible to Retire, to have Retired, at any time (or in
      the case of a Participant who is eligible to Retire, as soon as
      practicable) after such Participant is determined to be suffering a
      Disability, in which case the Participant shall receive a Disability
      Benefit equal to his or her vested Account Balance at the time of the
      Committee's determination; provided, however, that should the Participant
      otherwise have been eligible to Retire, he or she shall be paid in
      accordance with Article 5. The Disability Benefit shall be paid in a lump
      sum within 60 days of the Committee's exercise of such right. Any payment
      made shall be subject to the Deduction Limitation.

                                      -19-
<PAGE>
                                    ARTICLE 9
                             BENEFICIARY DESIGNATION

9.1   BENEFICIARY. Each Participant shall have the right, at any time, to
      designate his or her Beneficiary(ies) (both primary as well as contingent)
      to receive any benefits payable under the Plan to a beneficiary upon the
      death of a Participant. The Beneficiary designated under this Plan may be
      the same as or different from the Beneficiary designation under any other
      plan of an Employer in which the Participant participates.

9.2   BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant shall
      designate his or her Beneficiary by completing and signing the Beneficiary
      Designation Form, and returning it to the Committee or its designated
      agent. A Participant shall have the right to change a Beneficiary by
      completing, signing and otherwise complying with the terms of the
      Beneficiary Designation Form and the Committee's rules and procedures, as
      in effect from time to time. If the Participant names someone other than
      his or her spouse as a Beneficiary, a spousal consent, in the form
      designated by the Committee, must be signed by that Participant's spouse
      and returned to the Committee. Upon the acceptance by the Committee of a
      new Beneficiary Designation Form, all Beneficiary designations previously
      filed shall be canceled. The Committee shall be entitled to rely on the
      last Beneficiary Designation Form filed by the Participant and accepted by
      the Committee prior to his or her death.

9.3   ACKNOWLEDGMENT. No designation or change in designation of a Beneficiary
      shall be effective until received and acknowledged in writing by the
      Committee or its designated agent.

9.4   NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
      Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
      designated Beneficiaries predecease the Participant or die prior to
      complete distribution of the Participant's benefits, then the
      Participant's designated Beneficiary shall be deemed to be his or her
      surviving spouse. If the Participant has no surviving spouse, the benefits
      remaining under the Plan to be paid to a Beneficiary shall be payable to
      the executor or personal representative of the Participant's estate.

9.5   DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the proper
      Beneficiary to receive payments pursuant to this Plan, the Committee shall
      have the right, exercisable in its discretion, to cause the Participant's
      Employer to withhold such payments until this matter is resolved to the
      Committee's satisfaction.

                                      -20-
<PAGE>
9.6   DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
      Beneficiary shall fully and completely discharge all Employers and the
      Committee from all further obligations under this Plan with respect to the
      Participant, and that Participant's Plan Agreement shall terminate upon
      such full payment of benefits.

                                   ARTICLE 10
                                LEAVE OF ABSENCE

10.1  PAID LEAVE OF ABSENCE. If a Participant is authorized by the Participant's
      Employer for any reason to take a paid leave of absence from the
      employment of the Employer, the Participant shall continue to be
      considered employed by the Employer and the Annual Deferral Amount shall
      continue to be withheld during such paid leave of absence in accordance
      with Section 3.3.

10.2  UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the
      Participant's Employer for any reason to take an unpaid leave of absence
      from the employment of the Employer, the Participant shall continue to be
      considered employed by the Employer and the Participant shall be excused
      from making deferrals until the earlier of the date the leave of absence
      expires or the Participant returns to a paid employment status. Upon such
      expiration or return, deferrals shall resume for the remaining portion of
      the Plan Year in which the expiration or return occurs, based on the
      deferral election, if any, made for that Plan Year. If no election was
      made for that Plan Year, no deferral shall be withheld.

                                   ARTICLE 11
                     TERMINATION, AMENDMENT OR MODIFICATION

11.1  TERMINATION. Although each Employer anticipates that it will continue the
      Plan for an indefinite period of time, there is no guarantee that any
      Employer will continue the Plan or will not terminate the Plan at any time
      in the future. Accordingly, each Employer reserves the right to
      discontinue its sponsorship of the Plan and/or to terminate the Plan at
      any time with respect to any or all of its participating Employees and
      Directors, by action of its board of directors. Upon the termination of
      the Plan with respect to any Employer, the Plan Agreements of the affected
      Participants who are employed by that Employer, or in the service of that
      Employer as Directors, shall terminate and their vested Account Balances,
      determined as if they had experienced a Termination of Employment on the
      date of Plan termination or, if Plan termination occurs after the date
      upon which a Participant was eligible to Retire, then with respect to that
      Participant as if he or she had Retired on the date of Plan termination,
      shall be paid to the Participants as follows: Prior to a Change in
      Control, if the Plan is terminated with respect to all of its
      Participants, an Employer shall

                                      -21-
<PAGE>
      have the right, in its sole discretion, and notwithstanding any elections
      made by the Participant, to pay such benefits in a lump sum or pursuant to
      an Annual Installment Method of up to 15 years, with amounts credited and
      debited during the installment period as provided herein. If the Plan is
      terminated with respect to less than all of its Participants, an Employer
      shall be required to pay such benefits in a lump sum. After a Change in
      Control, the Employer shall be required to pay such benefits in a lump
      sum. The termination of the Plan shall not adversely affect any
      Participant or Beneficiary who has become entitled to the payment of any
      benefits under the Plan as of the date of termination; provided however,
      that the Employer shall have the right to accelerate installment payments
      without a premium or prepayment penalty by paying the vested Account
      Balance in a lump sum or pursuant to an Annual Installment Method using
      fewer years (provided that the present value of all payments that will
      have been received by a Participant at any given point of time under the
      different payment schedule shall equal or exceed the present value of all
      payments that would have been received at that point in time under the
      original payment schedule).

11.2  AMENDMENT. Any Employer may, at any time, amend or modify the Plan in
      whole or in part with respect to that Employer by the action of its board
      of directors; provided, however, that: (i) no amendment or modification
      shall be effective to decrease or restrict the value of a Participant's
      vested Account Balance in existence at the time the amendment or
      modification is made, calculated as if the Participant had experienced a
      Termination of Employment as of the effective date of the amendment or
      modification or, if the amendment or modification occurs after the date
      upon which the Participant was eligible to Retire, the Participant had
      Retired as of the effective date of the amendment or modification, and
      (ii) no amendment or modification of this Section 11.2 of the Plan shall
      be effective. The amendment or modification of the Plan shall not affect
      any Participant or Beneficiary who has become entitled to the payment of
      benefits under the Plan as of the date of the amendment or modification;
      provided, however, that the Employer shall have the right to accelerate
      installment payments by paying the vested Account Balance in a lump sum or
      pursuant to an Annual Installment Method using fewer years (provided that
      the present value of all payments that will have been received by a
      Participant at any given point of time under the different payment
      schedule shall equal or exceed the present value of all payments that
      would have been received at that point in time under the original payment
      schedule).

11.3  PLAN AGREEMENT. Despite the provisions of Sections 11.1 and 11.2 above, if
      a Participant's Plan Agreement contains benefits or limitations that are
      not in this Plan document, the Employer may only amend or terminate such
      provisions with the consent of the Participant.

                                      -22-
<PAGE>
11.4  EFFECT OF PAYMENT. The full payment of the applicable benefit under
      Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
      obligations to a Participant and his or her designated Beneficiaries under
      this Plan and the Participant's Plan Agreement shall terminate.

                                   ARTICLE 12
                                 ADMINISTRATION

12.1  COMMITTEE DUTIES. This Plan shall be administered by a Committee which
      shall consist of the Board, or such committee as the Board shall appoint.
      Members of the Committee may be Participants under this Plan. The
      Committee shall also have the discretion and authority to (i) make, amend,
      interpret, and enforce all appropriate rules and regulations for the
      administration of this Plan and (ii) decide or resolve any and all
      questions including interpretations of this Plan, as may arise in
      connection with the Plan. Any individual serving on the Committee who is a
      Participant shall not vote or act on any matter relating solely to himself
      or herself. When making a determination or calculation, the Committee
      shall be entitled to rely on information furnished by a Participant or the
      Company.

12.2  AGENTS. In the administration of this Plan, the Committee may, from time
      to time, employ agents and delegate to them such administrative duties as
      it sees fit (including acting through a duly appointed representative) and
      may from time to time consult with counsel who may be counsel to any
      Employer.

12.3  BINDING EFFECT OF DECISIONS. The decision or action of the Administrator
      with respect to any question arising out of or in connection with the
      administration, interpretation and application of the Plan and the rules
      and regulations promulgated hereunder shall be final and conclusive and
      binding upon all persons having any interest in the Plan.

12.4  INDEMNITY OF COMMITTEE. All Employers shall indemnify and hold harmless
      the members of the Committee, any Employee to whom the duties of the
      Committee may be delegated, and the Administrator against any and all
      claims, losses, damages, expenses or liabilities arising from any action
      or failure to act with respect to this Plan, except in the case of willful
      misconduct by the Committee, any of its members, any such Employee or the
      Administrator.

12.5  EMPLOYER INFORMATION. To enable the Committee and/or Administrator to
      perform its functions, the Company and each Employer shall supply full and
      timely information to the Committee and/or Administrator, as the case may
      be, on all matters relating to the compensation of its Participants, the
      date and circumstances of the Retirement, Disability, death or Termination
      of Employment of its Participants, and such other pertinent information as
      the Committee or Administrator may reasonably require.

                                      -23-
<PAGE>
                                   ARTICLE 13
                          OTHER BENEFITS AND AGREEMENTS

13.1  COORDINATION WITH OTHER BENEFITS. The benefits provided for a Participant
      and Participant's Beneficiary under the Plan are in addition to any other
      benefits available to such Participant under any other plan or program for
      employees of the Participant's Employer. The Plan shall supplement and
      shall not supersede, modify or amend any other such plan or program except
      as may otherwise be expressly provided.

                                   ARTICLE 14
                                CLAIMS PROCEDURES

14.1  PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
      Participant (such Participant or Beneficiary being referred to below as a
      "Claimant") may deliver to the Committee a written claim for a
      determination with respect to the amounts distributable to such Claimant
      from the Plan. If such a claim relates to the contents of a notice
      received by the Claimant, the claim must be made within 60 days after such
      notice was received by the Claimant. All other claims must be made within
      180 days of the date on which the event that caused the claim to arise
      occurred. The claim must state with particularity the determination
      desired by the Claimant.

14.2  NOTIFICATION OF DECISION. The Committee shall consider a Claimant's claim
      within a reasonable time, and shall notify the Claimant in writing:

      (a)   that the Claimant's requested determination has been made, and
            that the claim has been allowed in full; or

      (b)   that the Committee has reached a conclusion contrary, in whole or in
            part, to the Claimant's requested determination, and such notice
            must set forth in a manner calculated to be understood by the
            Claimant:

            (i)   the specific reason(s) for the denial of the claim, or any
                  part of it;

            (ii)  specific reference(s) to pertinent provisions of the Plan
                  upon which such denial was based;

            (iii) a description of any additional material or information
                  necessary for the Claimant to perfect the claim, and an
                  explanation of why such material or information is necessary;
                  and

            (iv)  an explanation of the claim review procedure set forth in
                  Section 14.3 below.

                                      -24-
<PAGE>
14.3  REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from the
      Committee that a claim has been denied, in whole or in part, a Claimant
      (or the Claimant's duly authorized representative) may file with the
      Committee a written request for a review of the denial of the claim.
      Thereafter, but not later than 30 days after the review procedure began,
      the Claimant (or the Claimant's duly authorized representative):

      (a)   may review pertinent documents;

      (b)   may submit written comments or other documents; and/or

      (c)   may request a hearing, which the Committee, in its sole discretion,
            may grant.

14.4  DECISION ON REVIEW. The Committee shall render its decision on review
      promptly, and not later than 60 days after the filing of a written request
      for review of the denial, unless a hearing is held or other special
      circumstances require additional time, in which case the Committee's
      decision must be rendered within 120 days after such date. Such decision
      must be written in a manner calculated to be understood by the Claimant,
      and it must contain:

      (a)   specific reasons for the decision;

      (b)   specific reference(s) to the pertinent Plan provisions upon which
            the decision was based; and

      (c)   such other matters as the Committee deems relevant.

14.5  LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
      this Article 14 is a mandatory prerequisite to a Claimant's right to
      commence any legal action with respect to any claim for benefits under
      this Plan.

                                   ARTICLE 15
                                      TRUST

15.1  ESTABLISHMENT OF THE TRUST. The Company shall establish the Trust, and
      each Employer shall at least annually transfer over to the Trust such
      assets as the Employer determines, in its sole discretion, are necessary
      to provide, on a present value basis, for its respective future
      liabilities created with respect to the Annual Deferral Amounts and Annual
      Company Contribution Amounts for such Employer's Participants for all
      periods prior to the transfer, as well as any debits and credits to the
      Participants' Account Balances for all periods prior to the transfer,
      taking into consideration the value of the assets in the trust at the time
      of the transfer.

                                      -25-

<PAGE>
15.2  INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the Plan
      and the Plan Agreement shall govern the rights of a Participant to receive
      distributions pursuant to the Plan. The provisions of the Trust shall
      govern the rights of the Employers, Participants and the creditors of the
      Employers to the assets transferred to the Trust. Each Employer shall at
      all times remain liable to carry out its obligations under the Plan.

15.3  DISTRIBUTIONS FROM THE TRUST. Each Employer's obligations under the Plan
      may be satisfied with Trust assets distributed pursuant to the terms of
      the Trust, and any such distribution shall reduce the Employer's
      obligations under this Plan.

                                   ARTICLE 16
                                  MISCELLANEOUS

16.1  STATUS OF PLAN. The Plan is intended to be a plan that is not qualified
      within the meaning of Code Section 401(a) and that "is unfunded and is
      maintained by an employer primarily for the purpose of providing deferred
      compensation for a select group of management or highly compensated
      employee" within the meaning of ERISA Sections 201(2), 301(a)(3) and
      401(a)(1). The Plan shall be administered and interpreted to the extent
      possible in a manner consistent with that intent.

16.2  UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries, heirs,
      successors and assigns shall have no legal or equitable rights, interests
      or claims in any property or assets of an Employer. For purposes of the
      payment of benefits under this Plan, any and all of an Employer's assets
      shall be, and remain, the general, unpledged unrestricted assets of the
      Employer. An Employer's obligation under the Plan shall be merely that of
      an unfunded and unsecured promise to pay money in the future.

16.3  EMPLOYER'S LIABILITY. An Employer's liability for the payment of benefits
      shall be defined only by the Plan and the Plan Agreement, as entered into
      between the Employer and a Participant. An Employer shall have no
      obligation to a Participant under the Plan except as expressly provided in
      the Plan and his or her Plan Agreement.

16.4  NONASSIGNABILITY. Neither a Participant nor any other person shall have
      any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
      or otherwise encumber, transfer, hypothecate, alienate or convey in
      advance of actual receipt, the amounts, if any, payable hereunder, or any
      part thereof, which are, and all rights to which are expressly declared to
      be, unassignable and non-transferable. No part of the amounts payable
      shall, prior to actual payment, be subject to seizure, attachment,
      garnishment or sequestration for the payment of any debts, judgments,
      alimony or separate maintenance owed by a Participant or any other person,
      be transferable by operation of law in the event of a

                                      -26-
<PAGE>
      Participant's or any other person's bankruptcy or insolvency or be
      transferable to a spouse as a result of a property settlement or
      otherwise.

16.5  NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan shall
      not be deemed to constitute a contract of employment between any Employer
      and the Participant. Such employment is hereby acknowledged to be an "at
      will" employment relationship that can be terminated at any time for any
      reason, or no reason, with or without cause, and with or without notice,
      unless expressly provided in a written employment agreement. Nothing in
      this Plan shall be deemed to give a Participant the right to be retained
      in the service of any Employer, either as an Employee or a Director, or to
      interfere with the right of any Employer to discipline or discharge the
      Participant at any time.

16.6  FURNISHING INFORMATION. A Participant or his or her Beneficiary will
      cooperate with the Committee by furnishing any and all information
      requested by the Committee and take such other actions as may be requested
      in order to facilitate the administration of the Plan and the payments of
      benefits hereunder, including but not limited to taking such physical
      examinations as the Committee may deem necessary.

16.7  TERMS. Whenever any words are used herein in the masculine, they shall be
      construed as though they were in the feminine in all cases where they
      would so apply; and whenever any words are used herein in the singular or
      in the plural, they shall be construed as though they were used in the
      plural or the singular, as the case may be, in all cases where they would
      so apply.

16.8  CAPTIONS. The captions of the articles, sections and paragraphs of this
      Plan are for convenience only and shall not control or affect the meaning
      or construction of any of its provisions.

16.9  GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
      construed and interpreted according to the internal laws of the State of
      California without regard to its conflicts of laws principles.

16.10 NOTICE. Any notice or filing required or permitted to be given to the
      Committee under this Plan shall be sufficient if in writing and
      hand-delivered, or sent by registered or certified mail, to the address
      below:

                     Deferred Compensation Plan Committee
                     Western Digital Corporation
                     8105 Irvine Center Drive
                     Irvine, CA 92718

                                      -27-
<PAGE>
      Such notice shall be deemed given as of the date of delivery or, if
      delivery is made by mail, as of the date shown on the postmark on the
      receipt for registration or certification.

      Any notice or filing required or permitted to be given to a Participant
      under this Plan shall be sufficient if in writing and hand-delivered, or
      sent by mail, to the last known address of the Participant.

16.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
      benefit of the Participant's Employer and its successors and assigns and
      the Participant and the Participant's designated Beneficiaries.

16.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse of a
      Participant who has predeceased the Participant shall automatically pass
      to the Participant and shall not be transferable by such spouse in any
      manner, including but not limited to such spouse's will, nor shall such
      interest pass under the laws of intestate succession.

16.13 VALIDITY. In case any provision of this Plan shall be illegal or invalid
      for any reason, said illegality or invalidity shall not affect the
      remaining parts hereof, but this Plan shall be construed and enforced as
      if such illegal or invalid provision had never been inserted herein.

16.14 INCOMPETENT. If the Committee determines in its discretion that a benefit
      under this Plan is to be paid to a minor, a person declared incompetent or
      to a person incapable of handling the disposition of that person's
      property, the Committee may direct payment of such benefit to the
      guardian, legal representative or person having the care and custody of
      such minor, incompetent or incapable person. The Committee may require
      proof of minority, incompetence, incapacity or guardianship, as it may
      deem appropriate prior to distribution of the benefit. Any payment of a
      benefit shall be a payment for the account of the Participant and the
      Participant's Beneficiary, as the case may be, and shall be a complete
      discharge of any liability under the Plan for such payment amount.

16.15 COURT ORDER. The Committee is authorized to make any payments directed by
      court order in any action in which the Plan or the Committee has been
      named as a party. In addition, if a court determines that a spouse or
      former spouse of a Participant has an interest in the Participant's
      benefits under the Plan in connection with a property settlement or
      otherwise, the Committee, in its sole discretion, shall have the right,
      notwithstanding any election made by a Participant, to immediately
      distribute the spouse's or former spouse's interest in the Participant's
      benefits under the Plan to that spouse or former spouse.

                                      -28-
<PAGE>
16.16 DISTRIBUTION IN THE EVENT OF TAXATION.

      (a)   IN GENERAL. If, for any reason, all or any portion of a
            Participant's benefits under this Plan becomes taxable to the
            Participant prior to receipt, a Participant may petition the
            Committee before a Change in Control, or the trustee of the Trust
            after a Change in Control, for a distribution of that portion of his
            or her benefit that has become taxable. Upon the grant of such a
            petition, which grant shall not be unreasonably withheld (and, after
            a Change in Control, shall be granted), a Participant's Employer
            shall distribute to the Participant immediately available funds in
            an amount equal to the taxable portion of his or her benefit (which
            amount shall not exceed a Participant's unpaid vested Account
            Balance under the Plan). If the petition is granted, the tax
            liability distribution shall be made within 90 days of the date when
            the Participant's petition is granted. Such a distribution shall
            affect and reduce the benefits to be paid under this Plan.

      (b)   TRUST. If the Trust terminates in accordance with Section 3.6(e) of
            the Trust and benefits are distributed from the Trust to a
            Participant in accordance with that Section, the Participant's
            benefits under this Plan shall be reduced to the extent of such
            distributions.

16.17 INSURANCE. The Employers, on their own behalf or on behalf of the trustee
      of the Trust, and, in their sole discretion, may apply for and procure
      insurance on the life of the Participant, in such amounts and in such
      forms as the Trust may choose. The Employers or the trustee of the Trust,
      as the case may be, shall be the sole owner and beneficiary of any such
      insurance. The Participant shall have no interest whatsoever in any such
      policy or policies, and at the request of the Employers shall submit to
      medical examinations and supply such information and execute such
      documents as may be required by the insurance company or companies to whom
      the Employers have applied for insurance.

16.18 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company and each
      Employer is aware that upon the occurrence of a Change in Control, the
      Board or the board of directors of a Participant's Employer (which might
      then be composed of new members) or a shareholder of the Company or the
      Participant's Employer, or of any successor corporation might then cause
      or attempt to cause the Company, the Participant's Employer or such
      successor to refuse to comply with its obligations under the Plan and
      might cause or attempt to cause the Company or the Participant's Employer
      to institute, or may institute, litigation seeking to deny Participants
      the benefits intended under the Plan. In these circumstances, the purpose
      of the Plan could be frustrated. Accordingly, if, following a Change in
      Control, it should appear to any Participant that the Company, the
      Participant's Employer or any successor corporation has failed to comply
      with any of its obligations under the Plan or any agreement thereunder or,
      if the Company, such Employer or any

                                      -29-
<PAGE>
      other person takes any action to declare the Plan void or unenforceable or
      institutes any litigation or other legal action designed to deny, diminish
      or to recover from any Participant the benefits intended to be provided,
      then the Company and the Participant's Employer irrevocably authorize such
      Participant to retain counsel of his or her choice at the expense of the
      Company and the Participant's Employer (who shall be jointly and severally
      liable) to represent such Participant in connection with the initiation or
      defense of any litigation or other legal action, whether by or against the
      Company, the Participant's Employer or any director, officer, shareholder
      or other person affiliated with the Company, the Participant's Employer or
      any successor thereto in any jurisdiction.

      IN WITNESS WHEREOF, the Company has signed this Plan document as of August
1, 2001.

                                    "Company"

                                    Western Digital Corporation a Delaware
                                      corporation

                                    By:
                                           -------------------------------------
                                    Title:
                                           -------------------------------------

                                      -30-

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