Seagate 2003 Annual Report Download - page 25

Table of Contents
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, New SAC has issued 483,835 restricted ordinary shares to management,
employees, directors and consultants of New SAC and its affiliates. These ordinary shares were scheduled to vest as follows:
• 25% of the shares on the first anniversary of the vesting commencement date; and
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 and we subsequently recorded an accrual of
$147 million in the fourth fiscal quarter of 2002. 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 pay out the $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.
New SAC redeemed all of its outstanding preferred shares as of March 14, 2003. As of July 2, 2004, there were 2,251,011 restricted
ordinary shares outstanding. 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 of the date of issuance. Through July 2,
2004, we had recognized $27 million of this compensation expense.
Consummation of Initial Public Offering
• 75% of the shares proportionately each month over the 36 months following the first anniversary of the vesting commencement date.
In December 2002, we completed the initial public offering of 72,500,000 of our common shares, 24,000,000 of which were sold by us
and 48,500,000 of which were sold by New SAC, our controlling shareholder, at a price of $12 per share. We received proceeds from our sale
of the 24,000,000 newly issued common shares of approximately $270 million after deducting underwriting fees, discounts and commissions.
In connection with our initial public offering, New SAC converted its 400,000,000 shares of our preferred stock, into common stock.
Immediately prior to the closing of our initial public offering, we paid a return of capital distribution of $262 million, or $0.65 per share, to the
holders of our then-
outstanding shares, including New SAC. We also paid a lump sum of approximately $12 million to members of our sponsor
group in exchange for the discontinuation of an annual monitoring fee of $2 million. This payment was charged to marketing and
administrative expense during our second fiscal quarter of 2002.
New SAC received proceeds of approximately $557 million from the sale of 48,500,000 common shares in our initial public offering,
after deducting underwriting discounts and commissions. New SAC distributed these net proceeds, together with the proceeds from the
distribution described above, to holders of its preferred and ordinary shares. As a result of the distribution to New SAC’s preferred
shareholders, our wholly-owned subsidiary, Seagate Technology HDD Holdings, became obligated to make payments of approximately
$147 million to the participants in its deferred compensation plan. These payments were made following the closing of our initial public
offering, and as a consequence there are no longer any outstanding obligations under that deferred compensation plan.
Consummation of Secondary Public Offering
Under the Seagate Technology shareholders agreement among New SAC, our financial sponsors and us, New SAC has demand
registration rights to request from time to time that we register to sell shares of our
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