Seagate 2002 Annual Report Download - page 26

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New SAC Restricted Shares.
At the closing of the November 2000 transactions, the board of directors of New SAC adopted the New SAC
2000 Restricted Share Plan. The 2000 Restricted Share Plan allows for the awarding of grants of ordinary and preferred shares of New SAC to
management, employees, directors and consultants of New SAC and its affiliates. New SAC issued 1,843,000 restricted ordinary shares and
48,500 restricted preferred shares under this plan to those members of management participating in the rollover agreements described below.
The restricted ordinary and preferred shares granted under the 2000 Restricted Share Plan vested as follows:
•
one-third of the shares vested on November 22, 2001;
•
one-third vested proportionately each month over the 18 months following November 22, 2001; and
In addition, at the closing of the November 2000 transactions certain individuals purchased additional ordinary and preferred shares of
New SAC for approximately $41 million in cash. Of this $41 million, approximately $21 million was purchased by members of the
management group.
Following the closing of the November 2000 transactions, the board of directors of New SAC approved the 2001 Restricted Share Plan.
Unlike the 2000 Restricted Share Plan, the 2001 Restricted Share Plan only provides for the grant of restricted ordinary shares of New SAC
and does not provide for the grant of restricted preferred shares of New SAC. Like the 2000 Restricted Share Plan, the 2001 Restricted Share
Plan allows for the award of grants to management, employees, directors and consultants of New SAC and its affiliates. New SAC has issued
483,523 restricted ordinary shares under this plan. Restricted shares granted under the 2001 Restricted Share Plan will vest as follows:
•
the final one-third vested on May 22, 2003.
•
25% of the shares will vest on the first anniversary of the vesting commencement date; and
New SAC redeemed all of its outstanding preferred shares as of March 14, 2003. As of June 27, 2003 there were 2,255,920 restricted
ordinary shares outstanding under both the 2000 and 2001 Restricted Share Plans. Accordingly, we have been recognizing, and will continue to
recognize, compensation expense of approximately $28 million proportionately over the respective vesting periods based on the estimated fair
value of these shares on the date of issuance. Through June 27, 2003, we had recognized $26 million of this compensation expense.
Deferred Compensation Plan . In connection with the management rollover, and in addition to the grant of restricted ordinary and
preferred shares of New SAC, members of the management group received approximately $179 million of interests in deferred compensation
plans adopted by our wholly-owned subsidiaries. Each member of the management group received an interest in one of the plans, with the
substantial majority of the members receiving interests in the Seagate Technology HDD Holdings plan. At inception, the interests in the
deferred compensation plan were subject to multi-year vesting.
In May 2002, we made $32 million in payments to participants in the deferred compensation plan. On June 19, 2002, the board of
directors accelerated vesting of all deferred compensation interests under the terms of the plan. As a result of certain distributions by New SAC
to holders of its preferred shares in connection with our initial public offering, Seagate Technology HDD Holdings became obligated to make
payments of approximately $147 million to participants of its deferred compensation plan, including named executive officers. Those payments
were made following the closing of our initial public offering, thereby satisfying all remaining obligations under the deferred compensation
plan.
Seagate Technology Share Option Plan
•
75% of the shares will vest proportionately each month over the 36 months following the first anniversary of the vesting
commencement date.
In December 2000, our board of directors adopted our share option plan. Under the terms of this share option plan, eligible employees,
directors and consultants can be awarded options to purchase our common shares under vesting terms to be determined at the date of grant. In
January 2002, this share option plan was amended to increase the maximum number of common shares issuable under the share option plan
from 72 million to 100 million shares. No options to purchase our common shares had been issued through June 29, 2001. From July 1, 2001
through June 27, 2003, options to purchase 87,954,753 common shares were granted to employees under this share option plan, net of
cancellations. This represents approximately 17% of our total voting power, assuming the exercise of all options. As of June 27, 2003, options
to purchase 14,870,267 common shares had been exercised.
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