Document:

Exhibit 10.1

Exhibit 10.1

Western Digital Corporation

Summary of Compensation Arrangements

for

Named Executive Officers and Directors

NAMED EXECUTIVE OFFICERS

Base Salaries. The current annual base salaries for the current executive officers of Western
Digital Corporation (the “Company”) who were named in the Summary Compensation Table in the
Company’s Proxy Statement that was filed with the Securities and Exchange Commission in connection
with the Company’s 2010 Annual Meeting of Stockholders (the “Named Executive Officers”) are as
follows:

	 	 	 	 	 	 	 
	Named Executive Officer	 	Title	 	Current Base Salary	 
	John F. Coyne
	 	President and Chief Executive Officer	 	$	1,000,000	 
	Timothy M. Leyden
	 	Chief Operating Officer	 	$	600,000	 

Semi-Annual Bonuses. Under the Company’s Incentive Compensation Plan (the “ICP”), the Named
Executive Officers are also eligible to receive semi-annual cash bonus awards that are determined
based on the Company’s achievement of performance goals pre-established by the Compensation
Committee (the “Committee”) of the Company’s Board of Directors as well as other discretionary
factors. The ICP, including the performance goals established by the Committee for the second half
of fiscal 2011, are further described in the Company’s current report on form 8-K filed with the
Securities and Exchange Commission on February 15, 2011, which is incorporated herein by reference.

Additional Compensation. The Named Executive Officers are also eligible to receive
equity-based incentives and discretionary bonuses as determined from time to time by the Committee,
are entitled to participate in various Company plans, and are subject to other written agreements,
in each case as set forth in exhibits to the Company’s filings with the Securities and Exchange
Commission. In addition, the Named Executive Officers may be eligible to receive perquisites and
other personal benefits as disclosed in the Company’s Proxy Statement filed with the Securities and
Exchange Commission in connection with the Company’s 2010 Annual Meeting of Stockholders.

 

 

 

DIRECTORS

Annual Retainer and Committee Retainer Fees. The following table sets forth the current
annual retainer and committee membership fees payable to each of the Company’s non-employee
directors:

	 	 	 	 	 
	Type of Fee	 	Current Annual Retainer Fees	 
	Annual Retainer
	 	$	75,000	 
	Lead Independent Director Retainer
	 	$	20,000	 
	Non-Executive Chairman of Board Retainer
	 	$	100,000	 
	Additional Committee Retainers
	 	 	 	 
	• Audit Committee
	 	$	10,000	 
	• Compensation Committee
	 	$	5,000	 
	• Governance Committee
	 	$	2,500	 
	Additional Committee Chairman Retainers
	 	 	 	 
	• Audit Committee
	 	$	15,000	 
	• Compensation Committee
	 	$	10,000	 
	• Governance Committee
	 	$	7,500	 

The retainer fee to the Company’s lead independent director referred to above is paid only if
the Chairman of the Board is an employee of the Company. Effective commencing with the Company’s
2010 Annual Meeting of Stockholders, the annual retainer fees are paid immediately following the
Annual Meeting of Stockholders.

Non-employee directors do not receive a separate fee for each Board of Directors or committee
meeting they attend. However, the Company reimburses all non-employee directors for reasonable
out-of-pocket expenses incurred to attend each Board of Directors or committee meeting. Mr. Coyne,
who is an employee of the Company, does not receive any compensation for his service on the Board
or any Board committee.

Additional Director Compensation. The Company’s non-employee directors are also entitled to
participate in the following other Company plans as set forth in exhibits to the Company’s filings
with the Securities and Exchange Commission: Non-Employee Director Option Grant Program and
Non-Employee Director Restricted Stock Unit Grant Program, each as adopted under the Company’s
Amended and Restated 2004 Performance Incentive Plan; Amended and Restated Non-Employee Directors
Stock-for-Fees Plan; and Deferred Compensation Plan.Exhibit 10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into by and between Western
Digital Corporation (the “Company”) and John F. Coyne (“Executive”), as of the 7th
day of March, 2011. This Agreement is being entered into in connection with the Company’s entry
into a Stock Purchase Agreement by and among the Company, Western Digital Ireland, Ltd., Hitachi,
Ltd. and Viviti Technologies Ltd. dated on or about the date hereof (the “Stock Purchase
Agreement”), and shall become effective on the date hereof (the “Effective Date”).

1. EMPLOYMENT.

The Company hereby agrees to continue to employ Executive and Executive hereby agrees to
accept such continued employment, upon the terms and conditions hereinafter set forth including but
not limited to provisions governing early termination, from the Effective Date to and including the
fifth anniversary of the Effective Date, provided that if the transactions contemplated by the
Stock Purchase Agreement successfully close, the employment term shall automatically extend until
the fifth anniversary of the date of the closing (the “Closing Date”) of the transactions
contemplated by the Stock Purchase Agreement (“Employment Period”). Unless Executive’s
employment is terminated pursuant to any early termination provision hereof or the parties mutually
agree otherwise in writing, Executive’s employment with the Company shall terminate without further
action by either party at the end of the Employment Period.

2. DUTIES.

A. Chief Executive Officer. On the Effective Date, Executive shall serve as Chief
Executive Officer of the Company. In this capacity, Executive shall report to the Board of
Directors of the Company, and shall have such duties and responsibilities consistent with his
position as Chief Executive Officer as the Board of Directors of the Company shall determine from
time to time.

B. Executive Commitment. During the Employment Period, Executive agrees to devote
substantially all of his time, energy and ability to the business of the Company, subject to
paragraph E of Section 3.

3. COMPENSATION.

A. Base Salary. During the Employment Period, the Company will pay to Executive a
base salary at the rate of $1,000,000 per year. Such salary shall be earned monthly and shall be
payable in periodic installments in accordance with the Company’s customary practices. Amounts
payable shall be reduced by standard withholding and other authorized deductions. Executive’s base
salary may be increased in the sole discretion of the Compensation Committee of the Board of
Directors (the “Compensation Committee”).

B. Bonus. Executive’s target bonus during the Employment Period for purposes of the
Company’s semi-annual Incentive Compensation Plan (ICP) bonus program shall be 150% of his
semi-annual base salary from the Company in effect on the last day of such fiscal period.
Executive’s actual bonus under the ICP may range from 0% to 200% of his target bonus based on the
level of attainment of the applicable performance objectives established
under the ICP. Executive’s target bonus may be increased in the sole discretion of the
Compensation Committee.

 

 

 

C. Retirement and Welfare Benefit Plans; Fringe Benefits. During the Employment
Period, Executive (and, in the case of welfare benefit plans, his eligible dependents, as the case
may be) shall be eligible for participation in the retirement, welfare, and fringe benefit plans,
practices, policies and programs provided by the Company on terms consistent with those generally
applicable to the Company’s other senior executives and approved by the Compensation Committee.

D. Expenses. During the Employment Period, Executive shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by him in accordance with the
policies, practices and procedures as in effect generally with respect to other senior executives
of the Company.

E. Vacation and Other Leave. During the Employment Period, Executive shall receive
paid vacation in an amount determined by the Company’s then-existing policies based upon
Executive’s years of service with the Company. Such vacation shall be scheduled and taken in
accordance with the Company’s standard vacation policies applicable to Company executives.
Executive shall also be entitled to all other holiday and leave pay generally available to other
executives of the Company.

F. Modification. The Company reserves the right to modify, suspend or discontinue any
and all of the above plans, practices, policies and programs at any time without recourse by
Executive so long as such action is taken generally with respect to other senior executives of the
Company and does not single out Executive.

4. LONG-TERM INCENTIVE COMPENSATION.

A. Long-Term Incentive Awards. During the Employment Period, the Executive shall be
eligible to receive long-term incentive awards on a basis commensurate with the Executive’s
position and in accordance with the long-term incentive guidelines applicable to the Executive’s
position established by the Compensation Committee. Any long-term incentive awards will generally
be granted by the Compensation Committee as part of its normal annual grant cycle applicable to
other senior executives of the Company. However, for the Company’s 2012 fiscal year, if the
transactions contemplated by the Stock Purchase Agreement successfully close prior to the Company’s
normal fiscal 2012 annual grant cycle that is expected to occur in September 2011, the Executive
shall be eligible to receive long-term incentive awards at the first Compensation Committee meeting
occurring after the Closing Date instead of at the time of the normal fiscal 2012 annual grant
cycle. Any long-term incentive awards granted to the Executive will be subject to the Company’s
customary terms and conditions, provided that any restricted stock units granted to Executive
during the Employment Period shall be scheduled to vest in three substantially equal annual
installments.

 

 

 

B. Integration Performance Units. As part of the Company’s integration bonus plan
that will be established in connection with, and subject to, the closing of the transactions
contemplated by the Stock Purchase Agreement, it will be recommended to the
Compensation Committee that Executive receive a grant of performance restricted stock units
equal to that number of units having a target value on the grant date equal to $4,000,000 (the
“Integration Performance Units”). Subject to the closing of the transactions contemplated
by the Stock Purchase Agreement, the Integration Performance Units are expected to be granted at
the first Compensation Committee meeting occurring after the Effective Date. The actual number of
Integration Performance Units that may become earned and payable will range from 0% to 200% of the
target number of Integration Performance Units awarded on the grant date, with the actual number of
Integration Performance Units becoming earned and payable to be based on the Company’s achievement
of the applicable performance milestones. The performance milestones applicable to the Integration
Performance Units will be determined by the Compensation Committee in consultation with Executive
following the Effective Date. Subject to Executive’s continued employment through the first
anniversary of the Effective Date, fifty percent (50%) of the target number of Integration
Performance Units shall become earned and payable within seventy days following the first
anniversary of the Effective Date based on performance during the first year following the
Effective Date. Subject to Executive’s continued employment through the second anniversary of the
Effective Date, the remaining fifty percent (50%) of the target number of Integration Performance
Units shall become earned and payable within seventy days following the second anniversary of the
Effective Date based on performance during the second year following the Effective Date. The
integration bonus plan will provide that in the event Executive’s employment is terminated under
circumstances that give rise to the payment of severance payments under either the Company’s
Executive Severance Plan or Amended and Restated Change of Control Severance Plan ( in accordance
with the terms of such plans and as each may be amended from time to time), then Executive shall be
entitled to receive payment of the target number of his Integration Performance Units applicable to
any in-progress or future portion of the applicable performance periods within seventy days
following the date of such termination of employment (and for the avoidance of doubt, and not in
any way in limitation of Executive’s rights to earn the Integration Performance Units based on
performance, if such a termination occurs after the first anniversary of the Effective Date,
Executive shall not be entitled to receive by virtue of his termination of employment any
Integration Performance Units attributable to the first year following the Effective Date).

C. Special Incentive Vesting and Exercisability From Prior Agreement. Subject to
Executive’s continued employment through January 1, 2012, following the termination of Executive’s
employment with the Company (regardless of the reason, other than a termination by the Company for
Cause (as defined in Section 5)), Executive will (i) be fully vested in any stock options granted
to him by the Company prior to January 1, 2012 and Executive will have three years from the date of
such termination to exercise such stock options (subject to earlier termination on the expiration
of the maximum applicable term of such stock options or, as provided in the applicable agreement
evidencing such options and the equity incentive plan of the Company under which they are granted,
the occurrence of a change in control of the Company and similar events) and (ii) be eligible to
receive a pro-rata portion of any outstanding Performance Cash Award granted to him prior to
January 1, 2012 equal to the amount that Executive would have been entitled to had he continued to
be employed through the applicable payment date, multiplied by a fraction the numerator of which is
the number of days in the performance period that Executive was employed by the Company and the
denominator of which is the total number of days in the performance period. Any such payment(s)
shall be made at the same time as amounts are paid generally with respect to the applicable
performance period.

 

 

 

5. TERMINATION.

A. Death. This Agreement and Executive’s employment shall terminate automatically on
the death of Executive.

B. Disability. The Company, at its option, may terminate Executive’s employment upon
the Disability of Executive. For purposes of this Agreement, “Disability” shall mean physical or
mental incapacity that renders Executive unable to perform the normal and customary duties of
employment of Executive even with a reasonable accommodation for (A) 120 days in any twelve (12)
month period or (B) for a period of ninety (90) successive days.

C. Cause. The Company may terminate Executive’s employment for Cause. For purposes
of this Agreement, “Cause” shall mean that the Company, acting in good faith based upon the
information then known to the Company, determines that Executive has engaged in or committed: (i)
willful misconduct, (ii) fraud, (iii) failure or refusal to perform the duties of Chief Executive
Officer or (iv) a conviction of or a plea of nolo contendre to a felony.

D. Other than Cause, Death, or Disability. The Company may terminate Executive’s
employment at any time, with or without cause, upon 30 days’ written notice.

E. Obligations of the Company Upon Termination.

(i) Termination for any Reason. If Executive’s employment is terminated for any
reason during the Employment Period, Executive shall be entitled to receive timely payment of the
sum of (i) Executive’s annual base salary through the date of termination to the extent not
theretofore paid and (ii) any compensation previously deferred by Executive in accordance with the
Company’s deferred compensation plans (together with any accrued interest or earnings thereon
pursuant to the terms of the applicable plan) and any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts described in clauses (i) and (ii) shall be
hereinafter referred to as the “Accrued Obligations”).

(ii) Executive Severance Plan and Change of Control Severance Plan. During the
Employment Period, Executive shall be entitled to participate in the Company’s Executive Severance
Plan and Amended and Restated Change of Control Severance Plan in accordance with the terms of such
plans and as each may be amended from time to time. Subject to the preceding sentence, the
Executive shall be entitled to receive “Tier I” benefits under each of the Severance Plan and the
Amended and Restated Change of Control Severance Plan. Any benefits becoming payable under the
Severance Plan or the Amended and Restated Change of Control Severance Plan as a result of the
termination of the Executive’s employment shall be in addition to the Accrued Obligations, provided
that to the extent Executive becomes entitled to receive payments or benefits included within the
Accrued Obligations under either such plan, Executive shall not be entitled to any duplication of
benefits.

F. Exclusive Remedy. Executive agrees that the payments and benefits contemplated by
this Agreement shall constitute the exclusive and sole remedy for any termination of his
employment, and Executive covenants not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment.

 

 

 

6. CONFIDENTIALITY AND INVENTION.

Executive has previously executed an Employee Invention and Confidentiality Agreement
(“Invention Agreement”), dated March 3, 1997, which is incorporated herein as if fully set
forth. In the event of an inconsistency between a provision of this Agreement and a provision of
the Invention Agreement, the provision of this Agreement controls.

7. NON-INTERFERENCE.

Executive promises and agrees that during the term of this Agreement, and for a period of
twenty-four (24) months thereafter, he will not influence or attempt to influence any customer,
supplier, or distributor of the Company to alter or reduce its business relationship with the
Company.

8. LITIGATION ASSISTANCE.

Executive agrees to cooperate with the Company in any actual or threatened litigation that
arises against or brought by the Company at any time during or after the Employment Period,
including but not limited to participating in interviews with the Company’s counsel to assist the
Company in any such litigation.

9. ARBITRATION.

Any controversy arising out of or relating to Executive’s employment, this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in
connection with any of its provisions, shall be submitted to arbitration in Orange County,
California, before a sole arbitrator selected from Judicial Arbitration and Mediation Services,
Inc., Orange County, California, or its successor (“JAMS”), or if JAMS is no longer able to supply
the arbitrator, such arbitrator shall be selected from ADR Services, Inc., and shall be conducted
in accordance with the provisions of California Civil Procedure Code Sections 1280 et seq. as the
exclusive remedy of such dispute; provided, however, that provisional injunctive relief may, but
need not, be sought in a court of law while arbitration proceedings are pending, and any
provisional injunctive relief granted by such court shall remain effective until the matter is
finally determined by the arbitrator. Final resolution of any dispute through arbitration may
include any remedy or relief which the arbitrator deems just and equitable. Any award or relief
granted by the arbitrator hereunder shall be final and binding on the parties hereto and may be
enforced by any court of competent jurisdiction. The parties agree that they are hereby waiving
any rights to trial by jury in any action, proceeding or counterclaim brought by either of the
parties against the other in connection with any matter whatsoever arising out of or in any way
connected with this Agreement or Executive’s employment.

10. SUCCESSORS.

A. This Agreement is personal to Executive and shall not, without the prior written consent of
the Company, be assignable by Executive.

 

 

 

B. This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns and any such successor or assignee shall be deemed
substituted for the Company under the terms of this Agreement for all purposes. As used
herein, “successor” and “assignee” shall include any person, firm, corporation or other business
entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires
the stock of the Company or to which the Company assigns this Agreement by operation of law or
otherwise.

11. WAIVER.

No waiver of any breach of any term or provision of this Agreement shall be construed to be,
nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in
writing and signed by the party waiving the breach.

12. MODIFICATION.

This Agreement shall not be modified by any oral agreement, either express or implied, and all
modifications hereof shall be in writing and signed by the parties hereto.

13. SAVINGS CLAUSE.

If any provision of this Agreement or the application thereof is held invalid, the invalidity
shall not affect other provisions or applications of the Agreement which can be given effect
without the invalid provisions or applications and to this end the provisions of this Agreement are
declared to be severable.

14. COMPLETE AGREEMENT.

This Agreement (and all other agreements, exhibits, and schedules referred to in this
Agreement, including without limitation the Invention Agreement) constitutes and contains the
entire agreement and final understanding concerning Executive’s employment with the Company and the
other subject matters addressed herein between the parties. It is intended by the parties as a
complete and exclusive statement of the terms of their agreement. It supersedes and replaces all
prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning
the subject matter hereof. Any representation, promise or agreement not specifically included in
this Agreement shall not be binding upon or enforceable against either party. This is a fully
integrated agreement.

15. GOVERNING LAW.

This Agreement shall be deemed to have been executed and delivered within the County of
Orange, State of California and the rights and obligations of the parties hereunder shall be
construed and enforced in accordance with, and governed by, the laws of the State of California
without regard to principles of conflict of laws.

16. CONSTRUCTION.

Each party has cooperated in the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not be construed against any party
on the basis that the party was the drafter. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.

 

 

 

17. COMMUNICATIONS.

All notices, requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered or if mailed by registered or certified mail,
postage prepaid, addressed to Executive at Western Digital Corporation, 3355 Michelson Drive, Suite
100, Irvine, California 92612, or addressed to the Company at: Western Digital Corporation, Attn.
Corporate Secretary, 3355 Michelson Drive, Suite 100, Irvine, California 92612. Either party may
change the address at which notice shall be given by written notice given in the above manner.

18. SECTION 409A.

To the extent that any reimbursements pursuant to paragraph D of Section 3 are taxable to
Executive, any reimbursement payment due to Executive pursuant to such provision shall be paid to
Executive on or before the last day of Executive’s taxable year following the taxable year in which
the related expense was incurred. The reimbursements pursuant to paragraph D of Section 3 are not
subject to liquidation or exchange for another benefit and the amount of such reimbursements that
Executive receives in one taxable year shall not affect the amount of such reimbursements that
Executive receives in any other taxable year.

19. EXECUTION AND EFFECTIVE DATE.

This Agreement is being executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. Photographic
copies of such signed counterparts may be used in lieu of the originals for any purpose. This
Agreement shall become effective on the Effective Date. Effective on the Effective Date, this
Agreement shall supersede and replace Executive’s existing Employment Agreement with the Company
entered into as of October 31, 2006 (the “Prior Employment Agreement”), and the Prior
Employment Agreement shall automatically terminate and be of no force and effect on the Effective
Date.

[Signatures on the following page.]

 

 

 

In witness whereof, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	THE COMPANY:

 	 
	 	By:  	/s/ Michael C. Ray
 	 
	 	 	Name:  	Michael C. Ray 	 
	 	 	Title:  	Vice President, General Counsel and Secretary 	 
	 
	 	EXECUTIVE:

 	 
	 	By:  	/s/ John F. Coyne
 	 
	 	 	Name:  John F. Coyne

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