Western Digital 2006 Annual Report Download - page 90

(1) We determine this value based on the market value on the date of exercise of shares covered by the exercised options,
less the option exercise price.
(2) These amounts represent the difference between the exercise price of in-the-money options and the market price of
our common stock on June 30, 2006, the last trading day of fiscal 2006. The closing price of our common stock on
that day on the New York Stock Exchange was $19.81. Options are in-the-money if the market value of the shares
covered thereby is greater than the option exercise price.
(3) These amounts include an aggregate of 43,750 shares of common stock subject to stock options granted to
Mr. Shakeel that were cancelled October 31, 2006 pursuant to an amendment to our employment agreement with
Mr. Shakeel.
Long-Term Incentive Plans — Awards in Last Fiscal Year
The following table sets forth the dollar value of a long-term cash award granted to each of Mr. Coyne and
Dr. Moghadam during fiscal 2006. Each long-term cash award is subject to our 2004 Performance Incentive Plan and a
separate award agreement.
Name
Number of
Shares, Units
or Other
Rights (#)(1)
Performance or
Other Period Until
Maturation or
Payout
Threshold
($)
Target
($)
Maximum
($)
Estimated Future Payouts Under
Non-Stock Price-Based Plans(1)
John F. Coyne ................... — 7/01/06 - 6/27/08 — 600,000 1,200,000
Hossein M. Moghadam ............ — 12/31/05 - 6/29/07 — 150,000 300,000
(1) The long-term cash award is valued at a target amount as determined by the administrator of our 2004 Performance
Incentive Plan and will be payable in cash at the end of the applicable performance period based upon the
achievement of one or more objective performance goals set forth in the applicable award agreement. No amount will
be payable if minimum performance levels are not achieved and up to a maximum of 200% of the target cash award
will be payable if performance exceeds the target level. In the event the recipient ceases to be employed by us or any of
our subsidiaries before the end of the applicable performance period, the long-term cash award will terminate, except
that in the event of a recipient’s death, a pro rata portion of the long-term cash award will be payable to the recipient’s
legal representative as further provided in the applicable award agreement. If eligible, each recipient will be
permitted to defer payment of the long-term cash award covered by his agreement pursuant to our Deferred
Compensation Plan. In addition, subject to certain limitations, 100% of the target award amount (or such greater
percentage as the Compensation Committee may deem appropriate in the circumstances) will become payable upon
the occurrence of a change in control event.
Director Compensation
Director Fees. Effective January 1, 2006, non-employee directors receive an annual retainer of $75,000 payable on
January 1 of each year, or if they join the Board of Directors at a later date, they receive a proportion of the annual fee
corresponding to the period for which they serve. Effective January 1, 2006, the chairman of the Audit Committee
receives an additional annual retainer of $15,000 and each other member of the Audit Committee receives an additional
annual retainer of $5,000. The chairmen of the Governance Committee and the Compensation Committee also each
receive an additional annual retainer of $5,000. We provide these additional annual retainers for directors serving on the
Audit Committee and for the chairmen of the Compensation and Governance Committees in recognition of the
additional work required for such service. We also reimburse non-employee directors for reasonable out-of-pocket
expenses incurred in attending each Board of Directors or committee meeting; however, beginning January 1, 2006, non-
employee directors do not receive a separate fee for each Board of Directors or committee meeting they attend.
Prior to January 1, 2006, each non-employee director received an annual retainer of $40,000 payable in January.
Each non-employee director also received compensation of $2,500 for each session during which he or she attended a
Board of Directors meeting, $1,500 for any and all committee meetings attended, $1,250 for each Board of Directors
meeting and $750 for each committee meeting held by telephone conference, plus reimbursement of reasonable
out-of-pocket expenses incurred in attending each meeting. In addition, the chairman of each committee of the Board of
Directors received an annual retainer of $5,000.
84