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                                                                 EXHIBIT 10.22.2

                      [THE IRVINE COMPANY LOGO/LETTERHEAD]

December 21, 1999

Mr. Charles A. Haggerty
Chairman of the Board
President & Chief Executive Officer
Western Digital Corporation
8105 Irvine Center Drive
Irvine, CA 92618

Dear Chuck:

I am in receipt of your letter dated December 20, 1999 wherein you ask that we
defer the date by which Western Digital must notify The Irvine Company of your
desire to extend the lease term. This letter shall serve to modify our existing
agreement (Second Amendment to Lease) dated January 6, 1999 as follows: (i) in
that the "Commitment Notice" must be received by Landlord no later than January
28, 2000 and (ii) the Term of the lease shall be extended to expire on midnight
January 31, 2001.

Chuck, to the extent that your lease status can be resolved in January, we may
well be able to backfill floors 8-15 given the current level of tenant demand
for space and the lack of mid-rise office space in Irvine Spectrum. For example,
the former AT&T building adjacent to your headquarters is now 98% leased with
prospects to go to 100% in the next sixty days. It would be our desire to stage
your downsizing to occur from the lowest floor (8) first, and move up in a
contiguous fashion. We believe this would enable us to lease this space faster
than if we have to lease from 15 down.

To be effective, we need to receive a signed copy of this letter agreement prior
to December 31, 1999.

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Mr. Charles A. Haggerty
December 21, 1999
Page Two

Best wishes for a Happy Holiday Season

Sincerely,

/s/ Richard G. Sim                    The above Terms are agreed to by:
    --------------

RGS:cf

cc: William R. Halford                Western Digital Corporation
    James Stiepan

                                      By: /s/ Charles A. Haggerty 12-22-99
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                                      It's Authorized officer<PAGE>   1
                                                                   EXHIBIT 10.35

                                FISCAL YEAR 2000
               WESTERN DIGITAL MANAGEMENT INCENTIVE PROGRAM (MIP)

                            PURPOSE
                            ----------------------------------------------------

                            The purpose of this program is to focus participants
                            on achieving key financial and strategic objectives
                            at the corporate and business group levels that will
                            lead to the creation of value for the Company's
                            shareholders and provide participants the
                            opportunity to earn significant awards, commensurate
                            with performance.

                            ELIGIBILITY
                            ----------------------------------------------------

                            Program eligibility is extended to all employees of
                            Western Digital and selected employees of its
                            domestic subsidiaries (Employees of Connex and
                            Sagetree are not eligible for this plan) who are in,
                            or who are hired into, salary grades 68 and above
                            (or equivalent) on or before January 31, 2000.

                            Eligibility may also be granted to employees who
                            have an authorized written agreement that grants
                            them eligibility.

                            Employees of Western Digital and its domestic
                            subsidiaries who are in salary grades 67 or below
                            (or equivalent) are eligible for awards generated by
                            a secondary bonus pool.

                            DESCRIPTION OF THE PROGRAM
                            ----------------------------------------------------

                            The 2000 Management Incentive Program will pay as
                            cash awards to participants for the achievement of
                            predetermined performance goals. Each participant
                            will be assigned a pool or target bonus percentage,
                            which when multiplied by the participant's annual
                            base salary as of June 30, 2000, will determine the
                            pool or target bonus payout.

                            Predetermined performance goals will be established
                            and approved by the Compensation Committee of the
                            Board of Directors.

                            The actual performance achieved will determine the
                            percentage used to calculate the award at the end of
                            the program year. The size of the actual award can
                            vary between 0% and 200% of the pool or target
                            award.

                            In addition, individual and pool awards may be
                            adjusted upward or downward by the Chief Executive
                            Officer from the amount generated by the formula.
                            The Chief Executive Officer's award may be adjusted
                            upward or downward by the Compensation Committee.

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                            OPERATION OF THE PROGRAM

                            ----------------------------------------------------

Program Year:               July 1, 1999 to June 30, 2000

Award Opportunities:       The award for participants will be expressed as a
                           percentage of salary, and determined according to
                           salary grade.

PerformanceMeasures:       Performance will be measured at the corporate and
                           business group levels. Performance measures that will
                           be used in the 2000 Program
                           are as follows:

                           -   Cash Flow
                           -   Time to Market
                           -   Inventory Management

2000 Goals and             Every employee of Western Digital covered by this
Weighting:                 program will be measured on the same goals and
                           objectives

                           The percentage of target bonus opportunity earned
                           (before discretionary adjustments) will vary from the
                           target bonus opportunity based on actual performance
                           achieved..

                           ADDITIONAL PROVISIONS
                           -----------------------------------------------------

Award Thresholds:          Corporate operating profit/loss must be at a minimum
                           level for incentives to be paid under any aspect of
                           the Program.

Total                      Award Cap: Total awards paid under this Program may
                           not exceed a preset amount as determined by the
                           Compensation Committee. Any award reductions
                           attributable to the preset cap will be made by the
                           Chief Executive Officer.

Award Adjustment:          Group award levels may be adjusted upward or downward
                           by up to 25% by the Chief Executive Officer provided
                           that total awards do not exceed the amounts generated
                           by formula.

                           After application of the group performance,
                           individual awards may be adjusted upward or downward
                           based on the adjustment table below. Approval from
                           the Chief Executive Officer is required for
                           adjustments outside of these limits. The Chief
                           Executive Officer's award may be adjusted upward or
                           downward by the Compensation Committee. The
                           adjustments by salary grade level (or equivalent) are
                           as follows:

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                               Salary Grade        Upward          Downward
                             (or equivalent)     Adjustment       Adjustment
                             ---------------     ----------       ----------

                             All Participants       +100%            -100%

                           All awards under this program are discretionary. The
                           amount of the award including adjustments is
                           determined by Western Digital in its sole discretion.
                           No employee has any contractual right to receive an
                           award pursuant to this program due to his/her
                           employment at Western Digital.

Extraordinary              Events: The Compensation Committee, in its
                           discretion, may adjust the basis upon which
                           performance is measured to reflect the effect of
                           significant changes that include, but are not limited
                           to, unbudgeted acquisitions/divestitures, unusual or
                           extraordinary accounting items, or significant,
                           unplanned changes in the economic or regulatory
                           environment.

Termination:               Participants must be employed by the Company at the
                           end of the program year to receive an award. If a
                           participant terminates for reason of retirement,
                           total and permanent disability, or death, the
                           Compensation Committee has the discretion to pay
                           prorated awards based upon the percentage of the year
                           worked.

Partial Year               The Compensation Committee, in its discretion, may
Participation:             pay prorated awards to people hired or promoted into
                           eligible positions after July 1, 1999. In general,
                           awards will be prorated for participants who begin
                           before January 31, 2000 while those hired after
                           January 31, 2000 will not be eligible to participate
                           in the program.

Deferred                   Payout: Before the end of the calendar year, the
                           participant may elect to defer payout of all or part
                           of the award in accordance with Western Digital's
                           Deferred Compensation Plan. The deferred amount will
                           be credited with a rate as specified in the Western
                           Digital's Deferred Compensation Plan.

Payout of Award:           Awards will be paid in cash as soon as possible
                           following the end of the program year or according to
                           the participant's deferral election.

Secondary Pool:            The intent of this pool is to allow for the top 10%
                           of the remaining population to receive 5% of their
                           salary as a bonus at target levels of performance.

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