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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
years 2004, 2003, and 2002, respectively. At both July 2, 2004 and June 27, 2003, the Company had no outstanding accounts payable to
E2open, Inc. One member of our board of directors became Chairman and Chief Executive Officer of Motorola, Inc. on January 5, 2004. The
Company recorded revenue of $16 million from sales to Motorola for the period from January 5, 2004 to July 2, 2004 and had accounts
receivable of $4 million from Motorola at July 2, 2004. Another individual who has been a member of our board of directors since April 29,
2004 is also a director of LSI Logic Corp. The Company recorded revenue of $3 million from sales to LSI Logic for the period from April 29,
2004 to July 2, 2004 and had accounts receivable of $5 million from LSI Logic at July 2, 2004.
Employee Receivables
At July 2, 2004, amounts receivable from two officers totaled $0.7 million while amounts from an additional 17 officers and/or
employees totaled $1.2 million. At June 27, 2003, amounts receivable from three officers totaled $1.8 million while amounts receivable from
an additional 11 officers and/or employees totaled $0.8 million. Individual loans were made to these employees to assist them with relocation
costs and/or beginning employment at the Company. At July 2, 2004, the loans totaling $0.7 million bear interest at 8% per year and are due in
lump sum payments, including unpaid interest, in fiscal year 2006. Under the terms of these loans, $0.3 million of the $0.7 million, as well as
accrued and unpaid interest, will be forgiven if these officers remain employed for a specified period of time. In the periods in which these
officers fulfill their employment obligations, the amount of principal and interest, which are forgiven ratably over the required employment
term, will be charged to compensation expense. The loans totaling $1.2 million generally are non-interest bearing and are due in lump sum
payments at the end of a five-year period.
Distributions to New SAC
During fiscal year 2004, pursuant to its quarterly dividend policy, the Company made cash distributions to its shareholders aggregating
approximately $90 million. Of the $90 million paid, New SAC received approximately $57 million. New SAC in turn distributed the $57
million it received to its ordinary shareholders, including approximately $11 million paid to officers and employees of the Company who held
ordinary shares of New SAC.
In July 2003, the Company completed the secondary public offering of 69,000,000 of its common shares, of which 9,000,000 were sold
pursuant to the underwriters’ exercise of their over-allotment option, all of which were sold by New SAC, as selling shareholder, at a price of
$18.75 per share. New SAC received proceeds of approximately $1.3 billion, after deducting underwriting discounts and commissions of
approximately $39 million. The Company incurred direct expenses aggregating approximately $1 million related to the offering. New SAC
distributed its net proceeds to holders of its ordinary shares including approximately $245 million distributed to the Company’s officers and
employees who hold ordinary shares of New SAC.
In February 2003 and May 2003, pursuant to its quarterly dividend policy, the Company made cash distributions to its shareholders
aggregating approximately $26 million. Of the $26 million paid, New SAC received approximately $21 million. New SAC in turn distributed
the $21 million it received to its ordinary shareholders, including approximately $5 million paid to officers and employees of the Company
who held ordinary shares of New SAC.
On December 9, 2002, prior to the initial public offering of common stock of the Company, New SAC converted all its then-outstanding
400 million preferred shares into common shares of the Company. On December 13, 2002, the Company completed the initial public offering
of 72,500,000 of its common shares, 24,000,000 of which were sold by the Company and 48,500,000 of which were sold by New SAC, its
parent company, as selling shareholder, at a price of $12 per share. The Company received proceeds from its sale of the
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