Seagate 2006 Annual Report Download - page 79

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
ability to attract, retain and motivate participants for the benefit of the Company and its shareholders. Options
granted to exempt employees will generally vest as follows: 25% of the shares will vest on the first anniversary of the
vesting commencement date and the remaining 75% will vest proportionately each month over the next 36 months.
Options granted to non-
exempt employees will vest on the first anniversary of the vesting commencement date. As of
June 29, 2007, there were approximately 38.7 million shares available for issuance under the 2004 Plan.
Assumed Maxtor Stock Options — In connection with the Company’s acquisition of Maxtor, the Company
assumed all outstanding options to purchase Maxtor common stock with a weighted-
average exercise price of $16.10
on an as-converted basis. Each option assumed was converted into an option to purchase the Company’s common
shares after applying the exchange ratio of 0.37 Company common shares for each share of Maxtor common stock.
In total, the Company assumed and converted Maxtor options into options to purchase approximately 7.1 million of
the Company’s common shares. In addition, the Company assumed and converted all outstanding Maxtor nonvested
stock into approximately 1.3 million of the Company’s nonvested shares, based on the 0.37 exchange ratio. The
assumed options and nonvested shares exchanged retained all applicable terms and vesting periods. As of June 29,
2007, approximately 2.0 million of the assumed options and 1.3 million of the exchanged nonvested shares were
outstanding.
Maxtor Corporation 1996 Stock Plan — On May 19, 2006, as a result of the acquisition of Maxtor, the
Company assumed all outstanding options and nonvested stock under Maxtor’s Amended and Restated 1996 Stock
Option Plan (the “1996 Plan”). Options under the 1996 Plan generally vest over a four-year period from the date of
grant with 25% vesting at the first anniversary date of the vesting commencement date and 6.25% each quarter
thereafter, expiring ten years from the date of grant. Nonvested shares generally vest over a three-year period from
the date of grant with
1
/
3
vesting at the first anniversary date of the vesting commencement date and
1
/
3
each year
thereafter, and are subject to forfeiture if employment is terminated prior to the time the shares become fully vested
and non-forfeitable.
Maxtor Corporation 2005 Performance Incentive Plan — On May 19, 2006, as a result of the acquisition of
Maxtor, the Company assumed all outstanding options and nonvested stock under Maxtor’s 2005 Performance
Incentive Plan (the “2005 Plan”). Options granted under the 2005 Plan generally vest over a four-year period with
25% vesting at the first anniversary date of the vesting commencement date and 6.25% each quarter thereafter,
expiring ten years from the date of grant. Nonvested shares generally vest over a three-year period from the date of
grant with
1
/
3
vesting at the first anniversary date of the vesting commencement date and
1
/
3
each year thereafter,
and are subject to forfeiture if employment is terminated prior to the time the shares become fully vested and non-
forfeitable.
Maxtor (Quantum HDD) Merger Plan — On May 19, 2006, as a result of the acquisition of Maxtor, the
Company assumed all outstanding options under Maxtor’s (Quantum HDD) Merger Plan. As of June 29, 2007 and
June 30, 2006, options granted under this plan were completely vested and exercisable.
Stock Purchase Plan — The Company established an Employee Stock Purchase Plan (“ESPP”) in December
2002. At that time, a total of 20 million common shares had been authorized for issuance under the ESPP. On
October 26, 2006, the Company’s shareholders approved an amendment to the ESPP to increase the number of
common shares available for issuance by 10 million bringing the total amount of common shares authorized to be
issued under the ESPP to 30 million. In no event shall the total number of shares issued under the ESPP exceed
75 million shares. The ESPP consists of a six-month offering period with a maximum issuance of 2.5 million shares
per offering period. The ESPP permits eligible employees who have completed thirty days of employment prior to
the commencement of any offering period to purchase common shares through payroll deductions generally at 85%
of the fair market value of the common shares. On July 31, 2006, the Company issued approximately 1.7 million
common shares under the ESPP, with a weighted-average purchase price of $16.45. On January 31, 2007, the
Company issued approximately 1.7 million common shares under the ESPP, with a weighted-average purchase
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