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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
included in accrued liabilities as of June 29, 2012 in the consolidated balance sheet. As of June 29, 2012, total com-
pensation cost related to unvested SARs issued to employees but not yet recognized was $18 million and will be
recognized on a straight-line basis over a weighted average service period of approximately 1.8 years.
Approximately 0.4 million RSUs were outstanding immediately following the Closing Date as a result of the
HGST RSUs assumed in connection with the Acquisition. In addition, the Company granted approximately
1.4 million RSUs during 2012, which are payable in an equal number of shares of the Company’s common stock at
the time of vesting of the units. The Company also granted 0.2 million (reported at target) performance restricted
stock units (“PSUs”) during 2012, which become earned and payable in shares of the Company’s common stock rang-
ing from 0% to 200% of the target number of PSUs based on achievement of certain performance milestones over
2013 and 2014. For purposes of this footnote, references to RSUs include the PSUs (at target). The effect of the PSUs
activity was immaterial to the Company’s financial statements in 2012. The aggregate market value of the shares
underlying the RSUs was $71 million at the date of grant or, in the case of the RSUs assumed in the Acquisition, at
the date of assumption. The compensation expense for granted and assumed RSUs is being recognized as expense over
the corresponding vesting or measurement periods of the awards. For purposes of recognizing awards granted, the
Company has assumed a weighted average forfeiture rate of 2.4% based on a historical analysis indicating forfeitures
for these types of awards. The Company recognized in expense $35 million, $32 million and $23 million related to
restricted stock and RSU awards granted under the Stock Plans that vested during 2012, 2011 and 2010, respectively.
As of June 29, 2012, the aggregate unamortized fair value of all unvested RSUs granted under the Stock Plans was
$56 million, which will be recognized on a straight-line basis over a weighted average vesting period of approximately
1.6 years.
Stock Option Activity
The following table summarizes stock option activity under the Stock Plans over the last three fiscal years
(in millions, except per share amounts and remaining contractual lives):
Number
of Shares
Weighted Average
Exercise Price
Per Share
Weighted Average
Remaining
Contractual Life
(in years)
Aggregate
Intrinsic
Value
Options outstanding at July 3, 2009 .... 11.3 $17.00
Granted ......................... 1.4 36.06
Exercised ......................... (3.1) 14.67
Canceled or expired ................. (0.2) 22.78
Options outstanding at July 2, 2010 .... 9.4 $20.61
Granted ......................... 2.5 26.59
Exercised ......................... (1.4) 16.83
Canceled or expired ................. (0.3) 26.21
Options outstanding at July 1, 2011 .... 10.2 $22.49
Granted ......................... 3.7 31.78
Assumed ......................... 4.2 8.47
Exercised ......................... (2.1) 15.14
Canceled or expired ................. (0.2) 28.76
Options outstanding at June 29, 2012 . . . 15.8 $21.89 4.5 $150
Exercisable at June 29, 2012 .......... 7.1 $20.55 3.5 $ 75
Vested and expected to vest after
June 29, 2012 .................... 15.6 $21.84 4.5 $149
71