Western Digital 2006 Annual Report Download - page 94

aggregate of 43,750 shares subject to stock options previously granted to Mr. Shakeel that were scheduled to vest after
June 29, 2007 and before January 1, 2008.
If we terminate Mr. Shakeel’s employment other than for cause (as defined in the agreement) prior to June 29, 2007,
Mr. Shakeel will be entitled to (i) a lump sum cash payment equal to his base salary and target bonus for the period
between the date his employment terminates and June 29, 2007, and (ii) accelerated vesting of any and all options and
other equity-based awards then outstanding and not otherwise fully vested, but only to the extent such awards were
otherwise scheduled to vest before June 29, 2007. The Employment Agreement with Mr. Shakeel, as amended, expires
June 29, 2007, subject to certain termination provisions.
Mr. Coyne. On October 31, 2006, we entered into an Employment Agreement with Mr. Coyne pursuant to which
he will be become Chief Executive Officer while also retaining his current title as President. In accordance with the
agreement, effective January 2, 2007, Mr. Coyne’s annual base salary will increase to $800,000, his target annual bonus
under our Incentive Compensation Plan will increase to 100% of his base salary and he will be entitled to participate in
our other benefit plans on terms consistent with those generally applicable to our other senior executives.
Pursuant to the agreement, Mr. Coyne also received two long-term performance cash awards, each that provide for a
cash bonus opportunity with a target amount of $1,000,000. One cash award corresponds to the performance period
July 1, 2006 through June 29, 2007 and the other cash award corresponds to the performance period July 1, 2006
through June 27, 2008. The performance cash awards are each subject to performance objectives determined by our
Compensation Committee. In addition, each year during Mr. Coyne’s employment as President and Chief Executive
Officer commencing after the first day of fiscal year 2008, Mr. Coyne will be eligible for and will receive a performance
cash award with a target amount of no less than $2,000,000. Each such performance cash award will be based on a
24-month performance cycle.
Subject to Mr. Coyne’s employment as President and Chief Executive Officer on January 31, 2007, the agreement
also provides that Mr. Coyne will receive 1,100,000 restricted stock units under our 2004 Performance Incentive Plan on
January 31, 2007. Subject to Mr. Coyne’s employment by us, these units will vest and become payable as follows:
110,000 on January 1, 2008, 110,000 on January 1, 2009, 330,000 on January 1, 2010, 110,000 on January 1, 2011 and
440,000 on January 1, 2012. Also on January 31, 2007, Mr. Coyne will receive a stock option under our 2004
Performance Incentive Plan to purchase 120,000 shares of our common stock (subject to proportionate and equitable
adjustments for stock splits and similar changes in capitalization). The exercise price per share of the option will equal the
fair market value of a share of our common stock on the grant date of the option. If we are in a trading blackout period on
January 31, 2007 pursuant to our policies on trading company securities applicable to executive officers generally, our
Compensation Committee may, in its discretion, delay the effective date of grant of either or both of the restricted stock
unit award or the stock option until after the blackout period ends, in which case the grant of these awards will be made
effective by approval of our Compensation Committee promptly following the end of the blackout period (and the date of
the option will be the date of this approval).
In addition, pursuant to the agreement, in each of our four fiscal years commencing with fiscal year 2008, Mr. Coyne
will receive a stock option to purchase shares of our common stock. The number of shares subject to these stock options
will be determined in the good faith discretion of our Compensation Committee based on Mr. Coyne’s individual
performance, our performance and market benchmark comparisons of compensation data for chief executive officers
against both peer group and general industry survey data.
If we terminate Mr. Coyne’s employment prior to January 1, 2012 other than for cause (as defined in the agreement)
or Mr. Coyne’s death or disability, Mr. Coyne will be entitled to the Tier 1 benefits under our Executive Severance Plan or,
if applicable, the benefits under our Amended and Restated Change of Control Severance Plan and payment of certain
other accrued obligations, including annual base salary and vacation accrued through Mr. Coyne’s termination date.
In the event Mr. Coyne remains employed by us as President and Chief Executive Officer through January 1, 2012,
then upon Mr. Coyne’s termination for any reason other than cause, all stock options granted to Mr. Coyne during the
term of his employment agreement will become fully vested and Mr. Coyne will have three years to exercise the options,
subject to their earlier expiration. In addition, Mr. Coyne will be eligible to receive payout following the end of each
performance period subject to any outstanding performance cash award on a pro-rata basis based on the period of
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