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SEAGATE TECHNOLOGY
FORM 10-K
(Annual Report)
Filed 08/13/08 for the Period Ending 06/27/08
Telephone 345-949-8066
CIK 0001137789
Symbol STX
SIC Code 3572 - Computer Storage Devices
Industry Computer Storage Devices
Sector Technology
Fiscal Year 06/30
http://www.edgar-online.com
© Copyright 2008, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    SEAGATE TECHNOLOGY FORM 10-K (Annual Report) Filed 08/13/08 for the Period Ending 06/27/08 Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 345-949-8066 0001137789 STX 3572 - Computer Storage Devices Computer Storage Devices Technology 06/30 http://www.edgar-online.com © Copyright ...

  • Page 2
    ... as of December 28, 2007, the last business day of the registrant's most recently completed second fiscal quarter, was approximately $10.9 billion based upon a closing price of $25.85 reported for such date by the New York Stock Exchange. The number of outstanding common shares of the registrant as...

  • Page 3
    ...PART II 5. 6. 7. 7A. 8. 9. 9A. 9B. Market for Registrant's Common Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Qualitative and Quantitative Disclosures About...

  • Page 4
    ... to particular disc drive products; market conditions; our ability to achieve potential cost savings from restructuring activities; and alternative cash imperatives which could impact our ability to repurchase stock. Such forward-looking statements are based on current expectations, forecasts and...

  • Page 5
    ... this Form 10-K carefully. Unfavorable changes in the above or other factors listed under "Item 1A. Risk Factors" from time to time in our Securities and Exchange Commission ("SEC") filings, could have a material adverse effect on our business, and financial condition and/or results of operations. 4

  • Page 6
    ... drives, we provide data storage services for small- to medium-sized businesses, including online backup, data protection and recovery solutions. We sell our disc drives primarily to major original equipment manufacturers (OEMs) and we also market to distributors under our globally recognized brand...

  • Page 7
    ... include integrating flash memory into storage products such as solid state drives (SSDs). SSDs are storage applications that use flash technology as an alternative to disc drives. System integrators. Companies that bundle and package storage components such as storage hardware and software into end...

  • Page 8
    ..., small form factor disc drives. SSD storage applications have been introduced as a potential alternative to redundant system startup or boot disc drives. In addition, enterprises are considering the use of SSDs in applications where rapid processing is required for high volume transaction data. The...

  • Page 9
    ... their current desktop or notebook disc drive capacities. Consumers are also using external branded storage solutions to backup and secure data in case of disaster or system failure. Disc Drives for Desktop Computing. We believe growth in disc drives for desktop computing has recently moderated...

  • Page 10
    ... the recording media are mounted inside a metal casing, called the base casing. The printed circuit board contains standard and custom application specific integrated circuits (ASICs) and ancillary electronic control chips. ASICs move data to and from the read/write head and the internal controller...

  • Page 11
    ...quarter of fiscal year 2009 and we believe we will have adequate internal and external supply plans in place to support our requirements. Similar to our long-term strategy on recording media supply, our future plans include the evaluation and external purchase of approximately 10% of recording heads...

  • Page 12
    ... head-disc assembly involves largely automated processes. Printed circuit boards are then mated to the head-disc assembly and the completed unit is tested prior to packaging and shipment. Disc drive assembly and test operations occur primarily at facilities located in China, Singapore and Thailand...

  • Page 13
    ..., transaction processing, professional video and graphics and medical imaging. Savvio SCSI/SAS/Fibre Channel Family. Savvio, our 2.5-inch enterprise disc drives designed to enable space optimization, maximized performance and availability, ships in 10,000 and 15,000 RPM and in storage capacities...

  • Page 14
    ... with limited right of return and price protection rights. In addition, we offer sales programs to distributors on a quarterly and periodic basis to promote the sale of selected products in the sales channel. We have increased our sales of branded storage products to retail customers in the last two...

  • Page 15
    .... Our customer service organization maintains a global network of service points to process warranty returns and manage outsourced repair vendors. We generally warrant our products for periods ranging from three to five years. Foreign sales are subject to foreign exchange controls and other...

  • Page 16
    ... that our future success will depend upon our ability to rapidly develop, manufacture and market products of high quality and reliability on a cost-effective basis. Introduction of any technology that delivers storage at an attractive price, or has other features not offered by disc drives, may be...

  • Page 17
    ... electronic data storage companies and component manufacturers with respect to licenses. Backlog In view of our customers' rights to cancel or defer orders with little or no penalty, we believe backlog in the disc drive industry is of limited indicative value in estimating future performance and...

  • Page 18
    ... market after July 1, 2006 as well as the Waste Electrical and Electronic Equipment ("WEEE") directive, which makes producers of electrical goods, including disc drives, financially responsible for specified collection, recycling, treatment and disposal of past and future covered products. Similar...

  • Page 19
    ..., Manufacturing Engineering, Singapore Operations from 1995 to 1997; and Senior Manager, Design Engineering, Twin Cities Division from 1992 to 1995. Mr. Richarz joined Seagate in May 2006, when we acquired Maxtor. He has served as our Executive Vice President, Sales and Customer Service Operations...

  • Page 20
    ...Recording Heads and Media Operations since 2000. Prior to that he was Senior Vice President/General Manager, Recording Media Group, from 1997 to 2000; and Vice President, Engineering and CTO Media from 1996 to 1997. Mr. Mosley has been Senior Vice President, Global Disc Storage Operations since 2007...

  • Page 21
    ... with the SEC. Web Site Access. Our Internet web site address is www.seagate.com. We make available, free of charge at the "Investor Relations" portion of this web site, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or...

  • Page 22
    ... time to enter the market. The growth of sales to distributors that serve producers of non-branded products in the personal storage sector may also contribute to increased price erosion. These customers generally have limited product qualification programs, which increases the number of competing...

  • Page 23
    ... of operations will be adversely affected. In response to customer demand for high-quality, high-volume and low-cost disc drives, manufacturers of disc drives have had to develop large, in some cases global, production facilities with highly developed technological capabilities and internal controls...

  • Page 24
    ...of our future performance. Our operating results in one or more future quarters may fail to meet the expectations of investment research analysts or investors, which could cause an immediate and significant decline in the trading price of our common shares. New Product Offerings-Market acceptance of...

  • Page 25
    ... to recapture the cost of our investments. The disc drive industry operates on quarterly purchasing cycles, with much of the order flow in any given quarter coming at the end of that quarter. Our manufacturing process requires us to make significant product-specific investments in inventory in each...

  • Page 26
    ..., high-quality technology and lower per gigabyte storage cost. Historically, our operating results have substantially depended upon our ability to be among the first-to-market with new product offerings. Our market share and operating results in the future may be adversely affected if we fail to...

  • Page 27
    ...by the possibility of competing alternative storage technologies like flash memory, meeting the customers' cost and capacity metrics, resulting in a rapid shift in demand from our products and disc drive technology, generally, to alternative storage technologies. Unpredictable fluctuations in demand...

  • Page 28
    ... and efforts to increase automation. Moreover, the reduction of personnel and closure of facilities may adversely affect our ability to manufacture our products in required volumes to meet customer demand and may result in other disruptions that affect our products and customer service. In addition...

  • Page 29
    ... portion of our sales has been to distributors of desktop disc drive products. Certain of our distributors may also market other products that compete with our products. Product qualification programs in this distribution channel are limited, which increases the number of competing products that are...

  • Page 30
    ...likelihood of reliability, quality or operability problems. If our products suffer increases in failures, are of low quality or are not reliable, customers may reduce their purchases of our products and our manufacturing rework and scrap costs and service and warranty costs may increase. In addition...

  • Page 31
    .... We are currently subject to lawsuits involving intellectual property claims which could cause us to incur significant additional costs or prevent us from selling our products, and which could adversely effect our results of operations and financial condition: actions brought in the United States...

  • Page 32
    ...material adverse effect on our business, operating results and financial condition. We believe our future success will also depend in large part upon our ability to attract, retain and further motivate highly skilled management, marketing, sales and product development personnel. We have experienced...

  • Page 33
    ..., among other things, our ability to pay dividends or make distributions in respect of our shares; redeem or repurchase shares; make investments or other restricted payments; sell assets; issue or sell shares of restricted subsidiaries; enter into transactions with affiliates; create liens; and...

  • Page 34
    ... and customer support operations. We have manufacturing facilities in China, Malaysia, Northern Ireland, Singapore and Thailand, in addition to those in the United States. A substantial portion of our desktop disc drive assembly occurs in our facility in China. Our international operations are...

  • Page 35
    ... managing our international manufacturing facilities, complying with local legal and regulatory requirements and protecting our intellectual property. We cannot assure you that we will continue to be found to be operating in compliance with applicable customs, currency exchange control regulations...

  • Page 36
    ... respect to the publicly traded securities of disc drive companies and technology companies generally. The price of our common shares is likely to be volatile in the future. In the past, following periods of decline in the market price of a company's securities, class action lawsuits have often been...

  • Page 37
    ...is located in the Cayman Islands, while our U.S. executive offices are in Scotts Valley, California. Our principal manufacturing facilities are located in China, Malaysia, Northern Ireland, Singapore and Thailand and, in the United States, in California and Minnesota. Our principal disc drive design...

  • Page 38
    ... sales prices of our common shares, as reported by the New York Stock Exchange, are set forth below for the periods indicated. Fiscal Quarter Price Range High Low Quarter ended September 29, 2006 Quarter ended December 29, 2006 Quarter ended March 30, 2007 Quarter ended June 29, 2007 Quarter ended...

  • Page 39
    ...internally available. We are restricted in our ability to pay dividends by the covenants contained in our revolving credit facility. Our declaration of dividends is also subject to Cayman Islands law and the discretion of our board of directors. Under the terms of the Seagate Technology shareholders...

  • Page 40
    ... Number of Shares Total Number of Shares Purchased (in millions) Average Price Paid per Share Purchased Under Publicly Announced Plans or Programs (in millions) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (in millions) August 2006 Stock Repurchase Plan...

  • Page 41
    ... and other costs primarily related to the closure of our Limavady, Northern Ireland and Milpitas, California operations, $98 million of stock-based compensation expense, $20 million in gains on the sale of assets, charges primarily related to our acquisitions of Maxtor, EVault and MetaLINCs which...

  • Page 42
    ... of acquired intangibles, $27 million in stock-based compensation charges related to Maxtor options assumed and nonvested shares exchanged and the settlement of $18 million in customer compensatory claims related to legacy Maxtor products. Year Ended June 30, 2006 Includes $163 million of variable...

  • Page 43
    ...data storage services for small- to medium-sized businesses, including online backup, data protection and recovery solutions. We sell our disc drives primarily to major original equipment manufacturers (OEMs), and we also market to distributors and retailers under our globally recognized brand names...

  • Page 44
    ... discounted price to gain market share; few new product introductions when multiple competitors have comparable or alternative product offerings; temporary imbalances between industry supply and demand; and seasonally weaker demand, which may cause excess supply. Disc drive manufacturers typically...

  • Page 45
    ... it will be necessary to continue to reduce prices as well as introduce new product offerings that utilize advanced technologies ahead of our competitors in order to take advantage of potentially higher initial profit margins and reduced cost structure on these new products. Disc Drive Industry...

  • Page 46
    ... class serial advanced technology architecture (SATA) and serial attached small computer system interface (SAS) will, in addition to expanding the overall enterprise market, likely shift some demand from disc drives used in traditional mission critical enterprise storage. • Disc Drives for Branded...

  • Page 47
    ... branded solutions storage markets. The Seagate 3.5-inch and 2.5-inch disc drive units used in our branded storage products are reported in the desktop and mobile market information, respectively. We maintain a highly integrated approach to our business by designing and manufacturing a significant...

  • Page 48
    ... of our mobile products in branded storage products. Our slower than market growth was mainly attributable to delayed product introductions allowing our competitors to capture additional market share during the year. In addition, the storage capacities for our mobile compute disc drive shipments are...

  • Page 49
    ...recording media supply, our future plans include the evaluation and external purchase of up to 10% of recording heads requirements. We purchase all of our glass substrates from third parties (mainly in Japan), which are used to manufacture our disc drives for mobile and small form factor CE products...

  • Page 50
    ... 12% Revenue growth in fiscal year 2008 reflected a 15% growth in the number of disc drives shipped. We believe unit growth was driven by continued growth in digital content, the resulting increase in demand for storage and customer acceptance of our new products. Industry disc drive demand across...

  • Page 51
    ... price protection, aimed at increasing customer demand. We exercise judgment in formulating the underlying estimates related to distributor and retail inventory levels, sales program participation and customer claims submittals in determining the provision for such programs. Sales programs recorded...

  • Page 52
    ... Northern Ireland and our Milpitas, California operations. The restructuring charges associated with the Limavady facility were primarily related to employee termination costs of approximately $29 million and approximately $18 million related to expected grant repayments. We plan to cease production...

  • Page 53
    .... As a result, our worldwide operating income is either subject to varying rates of tax or is exempt from tax due to tax holidays or tax incentive programs we operate under in China, Malaysia, Singapore, Switzerland and Thailand. These tax holidays or incentives are scheduled to expire in whole or...

  • Page 54
    ...2007 valuation allowance release was largely due to the completion during 2007 of the restructuring of the Company's intercompany arrangements, which enables the Company to forecast future U.S. taxable income with greater certainty and U.S. taxable income from the intercompany sale of certain Maxtor...

  • Page 55
    ... increase in revenue from fiscal year 2006 was driven by a 34% increase in the unit volume of disc drives shipped from 118.7 million units to 159.2 million units principally as a result of the retention of a portion of Maxtor's market share, offset by a 9% reduction in our average sales price from...

  • Page 56
    ... settlement of customer compensatory claims associated with quality issues related to legacy Maxtor products shipped prior to the closing of the Maxtor acquisition); and an aggressive pricing environment in fiscal year 2007, particularly in the high capacity 3.5-inch and mobile markets in the first...

  • Page 57
    .... As a result, our worldwide operating income is either subject to varying rates of tax or is exempt from tax due to tax holidays or tax incentive programs we operate under in China, Malaysia, Singapore, Switzerland and Thailand. These tax holidays or incentives are scheduled to expire in whole or...

  • Page 58
    ... to (i) potential future increases in our valuation allowance for deferred tax assets and (ii) limitations imposed by Internal Revenue Code Section 382 ("IRC Section 382") on usage of certain tax attributes, we anticipated that our effective tax rate in future periods will generally be less than...

  • Page 59
    Table of Contents In September 2006, Seagate Technology HDD Holdings ("HDD"), our wholly-owned direct subsidiary issued senior notes totaling $1.5 billion comprised of $300 million aggregate principal amount of Floating Rate Senior Notes due October 2009 (the "2009 Notes"), $600 million aggregate ...

  • Page 60
    ...equipment related to our subassembly and disc drive final assembly and test facilities in the Far East; $490 million to upgrade and expansion of our recording media operations in the United States, Malaysia and Singapore; $184 million for manufacturing facilities and equipment for our recording head...

  • Page 61
    ... related to our subassembly and disc drive final assembly and test facilities in the Far East; $143 million to upgrade and expansion of our recording media operations in the United States, Singapore and Northern Ireland; $337 million for manufacturing facilities and equipment for our recording head...

  • Page 62
    ... quarterly dividend of $0.12 per share that will be paid on or before August 15, 2008 to our common shareholders of record as of August 1, 2008. In deciding whether or not to declare quarterly dividends, our directors will take into account such factors as general business conditions within the disc...

  • Page 63
    ... to meet this obligation. The payment of dividends to holders of the Company's common shares have in certain quarters resulted in upward adjustments to the conversion rate of the 2.375% Notes and may continue in the future. If the conversion rate continues to increase, we may be required to book an...

  • Page 64
    ... these contra-revenue rebates and adjustments based on various factors, including price reductions during the period reported, estimated future price erosion, customer orders, distributor sell-through and inventory levels, program participation, customer claim submittals and sales returns. Our...

  • Page 65
    ...our ability to sell certain repaired disc drives. To the extent such sales fall below our forecast, warranty cost will be adversely impacted. Our warranty cost has ranged from approximately 2% to 2.5% of revenue over the last three years. We review our warranty accrual quarterly for products shipped...

  • Page 66
    ... technology, customer relationships, trade names, and other intangible assets; the acquired company's brand awareness and market position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company's product portfolio; and discount rates...

  • Page 67
    ...pending adoption of EITF No. 07-5 on our fiscal year 2010 consolidated results of operations and financial condition. In May 2008, the FASB issued FASB Staff Position (FSP), Accounting Principles Board (APB) Opinion No. 14, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon...

  • Page 68
    ...does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We will adopt SFAS No. 157 for financial assets in our fiscal year 2009 and for non-financial...

  • Page 69
    ...to support general corporate purposes including capital expenditures and working capital needs. We currently do not use interest rate derivatives to hedge our interest rate exposure. At June 27, 2008, we had no marketable securities that had been in a continuous unrealized loss position for a period...

  • Page 70
    ... speculative or trading purposes. During fiscal years 2008, 2007 and 2006, we did not enter into any hedges of net investments in foreign operations. We transact business in various foreign countries and our primary foreign currency cash flows are in countries where we have a manufacturing presence...

  • Page 71
    ... period during which the hedged forecasted transaction affects earnings. We also hedge a portion of our foreign currency denominated balance sheet positions with foreign currency forward contracts to reduce the risk that our earnings will be adversely affected by changes in currency exchange rates...

  • Page 72
    ...Accrued warranty Other non-current liabilities Long-term debt, less current portion Total Liabilities Commitments and contingencies (See Notes 8 and 9) Shareholders' equity: Preferred shares, $0.00001 par value per share-100 million authorized; no shares issued or outstanding Common shares, $0.00001...

  • Page 73
    Table of Contents SEAGATE TECHNOLOGY CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) Fiscal Year Ended June 30, June 27, 2008 June 29, 2007 2006 Revenue Cost of revenue Product development Marketing and administrative Amortization of intangibles Restructuring and other ...

  • Page 74
    ... employee stock purchase plan Dividends to shareholders Tax benefit from stock options Repurchases of common shares Net cash used in financing activities Increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period...

  • Page 75
    ...(loss) on cash flow hedges, net Change in unrealized gain (loss) on auction rate securities, net Net income Comprehensive income Issuance of common shares related to employee stock options and employee stock purchase plan Dividends to shareholders Tax benefit from stock options Repurchases of common...

  • Page 76
    ... contra-revenue rebates and adjustments based on various factors, including price reductions during the period reported, estimated future price erosion, customer orders, distributor sell-through and inventory levels, program participation, customer claim submittals and sales returns. The Company...

  • Page 77
    ...exercises judgment in estimating its ability to sell certain repaired disc drives. To the extent such sales fall below the Company's forecast, warranty cost will be adversely impacted. The Company accounts for income taxes pursuant to Financial Account Standards Board (FASB) Statement (SFAS) No. 109...

  • Page 78
    ... to a Customer , (EITF No. 01-09) for sales incentive programs. Estimated reductions to revenue for sales incentive programs, such as price protection, and sales growth bonuses, are recorded when revenue is recorded. Marketing development programs are either recorded as a reduction to revenue or as...

  • Page 79
    ...lives be amortized over their respective estimated useful lives. The Company's acquisition-related intangible assets are comprised of existing technology, customer relationships, trade names, and other intangible assets and are amortized over periods ranging from one to four years on a straight-line...

  • Page 80
    ... investments at June 27, 2008 and June 29, 2007 totaled $34 million and $25 million, respectively. Concentration of Credit Risk -The Company's customer base for disc drive products is concentrated with a small number of OEMs and distributors. Financial instruments, which potentially subject the...

  • Page 81
    Table of Contents SEAGATE TECHNOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) by the Internal Revenue Service or other tax jurisdiction. If estimates of these tax liabilities are greater or less than actual results, an additional tax benefit or provision will result (see Note 4). In ...

  • Page 82
    ... related transaction costs and the recognition of changes in the acquirer's income tax valuation allowance. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The Company currently believes that the adoption of SFAS No. 141(R) will...

  • Page 83
    ... income, as adjusted Denominator: Weighted-average common shares outstanding Weighted-average nonvested shares Total shares for purpose of calculating basic net income per share Weighted-average effect of dilutive securities: Dilution from employee stock options 2.375% convertible senior notes due...

  • Page 84
    ... value of available-for-sale securities at June 27, 2008 (in millions): Amortized Cost Unrealized Gain/ (Loss) Fair Value US Government & Agency Asset Backed Securities Corporate Bonds Municipal Bonds Auction Rate Securities Commercial Paper Bank Time Deposits Money Market Total Included in cash...

  • Page 85
    ... foreign currency denominated expenditures. The Company's policy prohibits it from entering into derivative financial instruments for speculative or trading purposes. During fiscal years 2008, 2007 and 2006, the Company did not enter into any hedges of net investments in foreign operations. 84

  • Page 86
    ...fiscal years 2008, 2007 and 2006. In addition, the Company did not discontinue any cash flow hedges for a probable forecasted transaction that would not occur in fiscal years 2008, 2007, and 2006. As of June 27, 2008, the notional value of the Company's outstanding foreign currency forward contracts...

  • Page 87
    ... of allowance for doubtful accounts in fiscal year 2007 due to the inherent uncertainties following the termination of its distribution relationships with eSys, previously a distributor of Seagate products. The Company's distribution relationships were terminated due to eSys' failure to comply with...

  • Page 88
    Table of Contents SEAGATE TECHNOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Property, equipment and leasehold improvements, net Property, equipment and leasehold improvements consisted of the following: Useful Life in Years June 27, June 29, 2008 2007 (In millions) Land Equipment ...

  • Page 89
    ... CONSOLIDATED FINANCIAL STATEMENTS-(Continued) In September 2006, Seagate Technology HDD Holdings ("HDD"), the Company's wholly-owned direct subsidiary, issued senior notes totaling $1.5 billion comprised of $300 million aggregate principal amount of Floating Rate Senior Notes due October 2009 (the...

  • Page 90
    ... trading days of the fourth quarter of fiscal year 2008. The payment of dividends to holders of the Company's common shares have in certain quarters resulted in upward adjustments to the conversion rate of the 2.375% Notes and may continue in the future. If the conversion rate continues to increase...

  • Page 91
    ... date, the Company had utilized $62 million for outstanding letters of credit and bankers' guarantees as of June 27, 2008, leaving $438 million for additional borrowings. The credit agreement governing the revolving credit facility includes limitations on the ability of the Company to pay dividends...

  • Page 92
    ...'s board of directors adopted the Seagate Technology 2004 Stock Compensation Plan (the "2004 Plan"), and on October 28, 2004, the Company's shareholders approved the 2004 Plan. A maximum of 63.5 million common shares is issuable under the 2004 Plan. Options granted to exempt employees will generally...

  • Page 93
    ... of future employee behavior as influenced by changes to the terms of its stock-based awards. Expected Volatility- The Company uses a combination of the implied volatility of its traded options and historical volatility of its share price. Expected Dividend -The Black-Scholes-Merton valuation model...

  • Page 94
    ... fair value of the Company's stock options granted to employees, assumed from Maxtor and issued from the ESPP for fiscal years 2008, 2007 and 2006 were estimated using the following weighted-average assumptions: 2008 Fiscal Years Ended 2007 2006 Options under Seagate Plans Expected term (in years...

  • Page 95
    ...Contents SEAGATE TECHNOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Stock Option Activity The Company issues new common shares upon exercise of stock options. The following is a summary of option activity for the Company's stock option plans, including options assumed from Maxtor, for...

  • Page 96
    Table of Contents SEAGATE TECHNOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) At June 27, 2008, the total compensation cost related to nonvested shares granted to employees under the Company's stock option plans (excluding nonvested shares exchanged in the Maxtor acquisition) but not ...

  • Page 97
    ... tax benefits resulting from the release of valuation allowance recorded in prior years. The fiscal year 2007 valuation allowance release was largely due to the completion during 2007 of the restructuring of the Company's intercompany arrangements, which enables the Company to forecast future...

  • Page 98
    ...2007 valuation allowance release was largely due to the completion during 2007 of the restructuring of the Company's intercompany arrangements, which enables the Company to forecast future U.S. taxable income with greater certainty and U.S. taxable income from the intercompany sale of certain Maxtor...

  • Page 99
    ... of the Maxtor acquisition, Maxtor underwent a change in ownership within the meaning of Section 382 of the Internal Revenue Code (IRC Sec. 382) on May 19, 2006. In general, IRC Section 382 places annual limitations on the use of certain tax attributes such as net operating losses and tax credit...

  • Page 100
    Table of Contents SEAGATE TECHNOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) A substantial portion of the Company's manufacturing operations in China, Malaysia, Singapore, Switzerland and Thailand operate under various tax holidays and tax incentive programs, which expire in whole or ...

  • Page 101
    ... $19 million of restructuring charges associated with employee termination costs related to the planned closure of its media manufacturing facility in Milpitas, California. The Company plans to cease production of its Milpitas facility during the first quarter of fiscal year 2009 and expects all...

  • Page 102
    ... plan established to continue the alignment of the Company's global workforce with existing and anticipated business requirements in its Far East operations. The restructuring costs were comprised of employee termination costs relating to a continuing effort to optimize our production around...

  • Page 103
    .... The Company's manufacturing operations are based on technology platforms that are used to produce various disc drive products that serve multiple disc drive applications and markets. The Company's main technology platforms are primarily focused around areal density of media and read/write head...

  • Page 104
    ...its common shares related to the Company's employee stock purchase plan. Repurchases of Equity Securities On August 8, 2006, the Company announced that its board of directors authorized the use of up to $2.5 billion for the repurchase of the Company's outstanding common shares over a two-year period...

  • Page 105
    ... a fixed amount to deliver a variable number of shares at future dates. The Company entered into these agreements in order to take advantage of repurchasing shares at a guaranteed discount to the Volume Weighted Average Price ("VWAP") of its common shares. The Company's policy has been to enter into...

  • Page 106
    ... the Company's common shares. As of June 29, 2007, the Company had approximately $974 million remaining under the authorized $2.5 billion August 2006 stock repurchase program. 8. Commitments Leases -The Company leases certain property, facilities and equipment under non-cancelable lease agreements...

  • Page 107
    ...patents are invalid and not infringed and that the Company owns any intellectual property based on the information that the Company disclosed to Convolve. The court denied plaintiffs' motion for expedited discovery and ordered plaintiffs to identify their trade secrets to defendants before discovery...

  • Page 108
    ... City, China, by an individual, Shao Tong, and a private Chinese company, Nanjing Yisike Network Safety Technique Co., Ltd. The complaint alleged that two of the Company's personal storage disc drive products infringe Chinese patent number ZL94111461.9, which prevents the corruption of systems data...

  • Page 109
    ...), a media patent that is allegedly owned by StorMedia Texas LLC. The suit was filed in U.S. District Court for the Eastern District of Texas, Marshall Division. All major hard disc drive companies are named, including Seagate Technology, Seagate Technology LLC, Hitachi, Fujitsu, Samsung, Toshiba...

  • Page 110
    ... technology advances and accelerate delivery of a wide range of differentiated products and cost-effective solutions to a growing base of customers. Under the terms of the Merger Agreement, each share of Maxtor common stock was exchanged for 0.37 of the Company's common shares. The Company issued...

  • Page 111
    ... these technologies less charges related to the contribution of other assets to those cash flows. The fair value of the existing technology was amortized to Cost of Revenue in fiscal year 2007 as the Company phased out the use of these technologies and transitioned to Seagate-designed products. 110

  • Page 112
    ... As of the date of the acquisition, all future development activities at Maxtor were discontinued. Therefore there were no assets that qualified as in-process research and development. Debt Assumed Upon the closing of the Merger, the Company assumed all of Maxtor's outstanding debt, including...

  • Page 113
    ... estimated service (vesting) periods of the underlying stock options or nonvested shares. Pro Forma Financial Information The unaudited financial information in the table below summarizes the combined results of operations of the Company and the results of Maxtor prior to the Merger, on a pro forma...

  • Page 114
    ...cash transaction valued at approximately $186 million, which included approximately $2 million in estimated acquisition-related expenses. EVault provides data storage services for small to medium size businesses, including online backup, data protection and recovery solutions. The purchase price had...

  • Page 115
    ... E-Discovery software that helps companies respond to litigation and regulatory issues which requires them to search large volumes of electronic data for relevant information. The purpose of the acquisition was to expand on the Company's software and services offerings. The purchase price has been...

  • Page 116
    ... million. In fiscal year 2008, the Company recorded a write-off of in-process research and development related to the acquisition of MetaLINCS in the amount of $4 million, which is included in Product development in the Consolidated Statements of Operations. The carrying value of intangible assets...

  • Page 117
    ... service as members of our board of directors. Intellectual Property Indemnification Obligations The Company has entered into agreements with customers and suppliers that include limited intellectual property indemnification obligations that are customary in the industry. These guarantees generally...

  • Page 118
    ... a period of three to five years. The Company uses estimated repair or replacement costs and uses statistical modeling to estimate product return rates in order to determine its warranty obligation. In addition, estimated settlements for customer compensatory claims relating product quality issues...

  • Page 119
    ... and loans between the Company and HDD or its restricted subsidiaries would constitute affiliate transactions. On July 3, 2006, through a corporate organizational change and realignment, Maxtor became a wholly-owned indirect subsidiary of HDD and of Seagate Technology. As a result, beginning July...

  • Page 120
    ... Technology Parent Company Guarantor HDD Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Cash and cash equivalents Short-term investments Accounts receivable, net Intercompany receivable Inventories Other current assets Total Current Assets Property, equipment...

  • Page 121
    ... TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Consolidating Balance Sheet June 29, 2007 (In millions) Seagate Technology Parent Company Guarantor HDD Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Cash and cash equivalents Short-term investments Accounts...

  • Page 122
    ... Statement of Operations Fiscal Year Ended June 27, 2008 (In millions) Seagate Technology Parent Company Guarantor HDD Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Revenue Cost of revenue Product development Marketing and administrative Amortization...

  • Page 123
    ... to HDD Investment by HDD in Non-Guarantor Proceeds from exercise of employee stock options and employee stock purchase plan Dividends to shareholders Tax benefit from exercise of stock options Repurchases of common shares Net cash provided by (used in) financing activities Increase (decrease...

  • Page 124
    ... Statement of Operations Fiscal Year Ended June 29, 2007 (In millions) Seagate Technology Parent Company Guarantor HDD Subsidiary Issuer Combined Non-Guarantors Eliminations Seagate Technology Consolidated Revenue Cost of revenue Product development Marketing and administrative Amortization...

  • Page 125
    ...to HDD Investment by HDD in Non-Guarantor Proceeds from exercise of employee stock options and employee stock purchase plan Dividends to shareholders Repurchases of common shares and payments made under prepaid forward agreements Net cash provided by (used in) financing activities Increase (decrease...

  • Page 126
    ... Statement of Operations Fiscal Year Ended June 30, 2006 (In millions) Seagate Technology Parent Company Guarantor HDD Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Revenue Cost of revenue Product development Marketing and administrative Amortization...

  • Page 127
    ... Non-Guarantor to HDD Loan from Non-Guarantor to HDD Distribution from HDD to Parent Investment by Parent in Non-Guarantor Dividends to shareholders Tax benefit from exercise of stock options Repurchases of common shares Net cash (used in) provided by financing activities Increase (decrease) in cash...

  • Page 128
    ...of Operations and Cash Flows for the fiscal years ended June 27, 2008, June 29, 2007 and June 30, 2006, which for subsidiary issuer represents the period from May 19, 2006 to June 30, 2006. The information classifies the Company's subsidiaries into Seagate Technology-parent company guarantor, Maxtor...

  • Page 129
    ... Parent Company Guarantor Maxtor Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Cash and cash equivalents Short-term investments Accounts receivable, net Intercompany receivable Inventories Other current assets Total Current Assets Property, equipment...

  • Page 130
    ... CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Consolidating Balance Sheet June 29, 2007 (In millions) Seagate Technology Parent Company Guarantor Maxtor Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Cash and cash equivalents Short-term investments Accounts...

  • Page 131
    ... Statement of Operations Fiscal Year Ended June 27, 2008 (In millions) Seagate Technology Parent Company Guarantor Maxtor Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Revenue Cost of revenue Product development Marketing and administrative Amortization...

  • Page 132
    ... and employee stock purchase plan Dividends to shareholders Tax benefit from exercise of stock options Repurchases of common shares Net cash provided by (used in) financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash...

  • Page 133
    ... Statement of Operations Fiscal Year Ended June 29, 2007 (In millions) Seagate Technology Parent Company Guarantor Maxtor Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Revenue Cost of revenue Product development Marketing and administrative Amortization...

  • Page 134
    ... and employee stock purchase plan Dividends to shareholders Repurchases of common shares and payments made under prepaid forward agreements Net cash provided by (used in) financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period...

  • Page 135
    ... Statement of Operations Fiscal Year Ended June 30, 2006 (In millions) Seagate Technology Parent Company Guarantor Maxtor Subsidiary Issuer Combined NonGuarantors Seagate Technology Consolidated Eliminations Revenue Cost of revenue Product development Marketing and administrative Amortization...

  • Page 136
    ... stock purchase plans Loan from Non-Guarantor to Parent Loan from HDD to Non-Guarantor Distribution from HDD to Parent Investment by Parent in Non-Guarantor Dividends to shareholders Tax benefit from exercise of stock options Repurchases of common shares Net cash (used in) provided by financing...

  • Page 137
    ...first quarter of fiscal year 2007 include a $40 million increase in the provision for doubtful accounts related to the termination of the Company's distributor relationship with eSys and its related affiliated entities, approximately $24 million of stock-based compensation, Maxtor's operating losses...

  • Page 138
    ... intangibles, $18 million in customer compensatory claims relating to legacy Maxtor products and $7 million in stock-based compensation charges related to Maxtor options assumed and nonvested shares exchanged. The results for the third quarter of fiscal year 2007 include approximately $29 million of...

  • Page 139
    ... with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Seagate Technology's internal control over financial reporting as of June 27, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring...

  • Page 140
    ...the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Seagate Technology as of June 27, 2008 and June 29, 2007, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended June...

  • Page 141
    ...and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of...

  • Page 142
    ... accounting officers. This Code of Business Conduct and Ethics is posted on our Website. The Internet address for our Website is www.seagate.com , and the Code of Business Conduct and Ethics may be found from our main Web page by clicking first on "News + Info" and then on "Investor Relations," next...

  • Page 143
    ... to Stock Purchase Agreement, Agreement and Plan of Merger and Reorganization, and Indemnification Agreement, and Consent, dated as of August 29, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc., Seagate Software Holdings, Inc., VERITAS Software Corporation and...

  • Page 144
    ... to Stock Purchase Agreement, Agreement and Plan of Merger and Reorganization, and Indemnification Agreement, and Consent, dated as of October 18, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc., Seagate Software Holdings, Inc., VERITAS Software Corporation and...

  • Page 145
    ...Technology's compensation policy for non-management members of the board of directors (incorporated by reference to Exhibit 10.17 (b) to the registrant's quarterly report on Form 10-Q filed with the SEC on April 29, 2008) Indenture between Maxtor Corporation and U.S. Bank National Association, dated...

  • Page 146
    ... with the SEC on May 25, 2006) Seagate Technology 2004 Stock Compensation Plan Form of Performance Share Bonus Agreement (incorporated by reference to Exhibit 10.1 to the registrant's current report on Form 8-K filed with the SEC on September 18, 2007) Code of Business Conduct and Ethics List of...

  • Page 147
    ... without limiting the generality of the foregoing, power and authority to sign the name of the registrant and the name of the undersigned, individually and in his capacity as a director or officer of the registrant, to the Annual Report as filed with the U.S. Securities and Exchange Commission, to...

  • Page 148
    Table of Contents Signature Title Date /S/ /S/ /S/ / S/ W ILLIAM W. B RADLEY (William W. Bradley) Director Director Director Director Director Director Director 147 August 13, 2008 August 13, 2008 August 13, 2008 August 13, 2008 August ...

  • Page 149
    ... to Stock Purchase Agreement, Agreement and Plan of Merger and Reorganization, and Indemnification Agreement, and Consent, dated as of October 18, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc., Seagate Software Holdings, Inc., VERITAS Software Corporation and...

  • Page 150
    ...Indenture dated September 20, 2006 among Seagate Technology, Seagate Technology HDD Holdings and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the registrant's current report on Form 8-K (file no. 001-31560) filed with the SEC on September 21, 2006) Forms of Global Note...

  • Page 151
    ... with the SEC on May 25, 2006) Seagate Technology 2004 Stock Compensation Plan Form of Performance Share Bonus Agreement (incorporated by reference to Exhibit 10.1 to the registrant's current report on Form 8-K filed with the SEC on September 18, 2007) Code of Business Conduct and Ethics List of...

  • Page 152
    ... 302 of the Sarbanes-Oxley Act of 2002 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * Filed herewith. + Management contract or compensatory plan or arrangement. 151

  • Page 153
    ... terms are defined or described in Sections 3(a)(9) and 13(d)(3) of the Exchange Act (other than to Silver Lake Partners and its affiliates, Texas Pacific Group and its affiliates, or any group controlled by one or more of the foregoing), that will continue the business of the Company in the future;

  • Page 154
    ... from the list of "shareholders of the Company immediately prior to such merger or consolidation" for purposes of the preceding calculation; (iii) Any person or group (other than Silver Lake Partners and its affiliates, Texas Pacific Group and its affiliates, or any group controlled by one or more...

  • Page 155
    ...no interruption or termination of the Participant's Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or the chief executive officer of the Company, in...

  • Page 156
    ... securities exchange, the arithmetic mean of the per Share closing bid price and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System (or such market in which such prices are regularly quoted), or if no sale of stock...

  • Page 157
    ...within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an...

  • Page 158
    ...or release schedules; (y) new product innovation; (z) cost reductions; (aa) implementation of our critical processes or projects; (bb) customer service or customer satisfaction; or (cc) product quality measures. 2.33. "Restricted Stock Bonus" means a grant of shares of the Company's Common Stock not...

  • Page 159
    ... and conditions of the Plan. 2.41. "Ten Percent Shareholder" means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates. III...

  • Page 160
    ... to whom the Company wishes to comply with Section 162(m) of the Code and/or (2) delegate to a committee of one or more individuals who are not Non-Employee Directors the authority to grant Stock Awards to eligible persons who are either (a) not then subject to Section 16 of the Exchange Act or...

  • Page 161
    ...expiration of five (5) years from the date of grant. 5.3. Annual Section 162(m) Limitation . Subject to the provisions of Section 14 of the Plan relating to adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted Stock Awards covering more than ten million...

  • Page 162
    ... and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on...

  • Page 163
    ... the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 6.7 Vesting Generally . Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Board...

  • Page 164
    ... Eligible Director of the Company shall be automatically granted without the necessity of action by the Board, the following Stock Award grants: 7.1. Initial Stock Award Grant . (i) Form of Initial Stock Award . On the date that a Director commences service on the Board and satisfies the definition...

  • Page 165
    ... date, and (3) has served as a Director for a period of at least six (6) months. The existing independent members of the Board shall determine which portion of each Annual Grant will be granted in the form of a Nonstatutory Stock Option, if any, and which portion of each Annual Grant will be granted...

  • Page 166
    ... schedule to be determined by the Board. (iii) Termination of Participant's Continuous Service . In the event a Participant's Continuous Service terminates, the Company shall reacquire any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination...

  • Page 167
    ... Service. Shares of Common Stock acquired under the Restricted Stock Purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board. (iv) Termination of Participant's Continuous Service...

  • Page 168
    ... a distribution from the Company in an amount equal to the excess of the Fair Market Value (on the redemption date) of the number of vested shares which the holder redeems over the aggregate base price for such vested shares, whereupon the number of shares of Common Stock subject to the concurrently...

  • Page 169
    ... Affiliate for its benefit. (ii) Vesting . Vesting shall generally be based on the Participant's Continuous Service. Shares of Common Stock awarded under the Restricted Stock Unit agreement shall be subject to a share reacquisition right in favor of the Company in accordance with a vesting schedule...

  • Page 170
    ... to meet performance criteria, shares of Common Stock awarded under the Performance Share Bonus agreement shall be subject to a share reacquisition right in favor of the Company in accordance with a vesting schedule to be determined by the Board. (iii) Termination of Participant's Continuous Service...

  • Page 171
    ... to meet performance criteria, shares of Common Stock awarded under the Performance Share Unit agreement shall be subject to a share reacquisition right in favor of the Company in accordance with a vesting schedule to be determined by the Board. (iii) Termination of Participant's Continuous Service...

  • Page 172
    ... to grant Stock Awards and to issue and sell shares of Common Stock upon exercise, redemption or satisfaction of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or...

  • Page 173
    ... from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company. XII. CANCELLATION AND RE-GRANT OF OPTIONS. 12.1. The Board shall have the authority to effect, at any time and from time to time, (i) the repricing of any outstanding Options under the Plan and/or...

  • Page 174
    ... has issued the shares of Common Stock relating to such Stock Award. 13.3. No Employment or other Service Rights . Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in...

  • Page 175
    ... dividend, spinoff, dividend in property other than cash, stock split, liquidating dividend, extraordinary dividends or distributions, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan...

  • Page 176
    ... occurs. With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised or redeemed prior to the closing of the transaction by which the Change of Control occurs. The Board shall not be obligated to treat all Stock Awards, even those that are of...

  • Page 177
    ... Plan Term . The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10 th ) anniversary of the date the Plan is approved by the shareholders of the Company. No Stock Awards may be granted under the Plan while the Plan...

  • Page 178
    ... regarding the Plan and this Award (including but not limited to the Prospectus) by electronic delivery through access on the Company's internal website and/or Internet website at http://eq.seagate.com, which Participant may easily access and understands how to access, review and print the...

  • Page 179
    Attachment I Restricted Stock Bonus Agreement

  • Page 180
    ...of any trading blackout or closed window period in effect on the scheduled vesting date, you established an effective Rule 10b5-1 trading plan that provides for the sale of a sufficient number of the shares scheduled to vest on such vesting date to fund the payment of any tax withholding obligations...

  • Page 181
    ..., there is any stock dividend, stock split or other change in the character or amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of your Award, then in such event any and all new, substituted or additional securities or property to which you...

  • Page 182
    ... have as an Employee, Director or Consultant for the Company or an Affiliate. 8. T AX C ONSEQUENCES . Set forth below is a brief summary as of the Grant Date of certain United States federal income tax consequences of the award of Restricted Shares. THIS SUMMARY DOES NOT ADDRESS EMPLOYMENT, SPECIFIC...

  • Page 183
    ...the grant of Restricted Shares, you may file an election with the Internal Revenue Service, within 30 days of the Grant Date, electing pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to be taxed currently on the fair market value of the Restricted Shares on the Grant Date...

  • Page 184
    Attachment II 2004 Stock Compensation Plan

  • Page 185
    Attachment III Form of Assignment Separate from Certificate

  • Page 186
    ... certain Restricted Stock Bonus Grant Notice and Restricted Stock Bonus Agreement (the "Award"), [Participant's Name] hereby sells, assigns and transfers to Seagate Technology, a limited company domiciled in the Cayman Islands ("Corporation"), or its assignee, ( ) shares of the Common Stock of the...

  • Page 187
    Attachment IV Form of Joint Escrow Instructions

  • Page 188
    ... October 24, 2005 Corporate Secretary Seagate Technology 920 Disc Drive Scotts Valley, CA 95067 Dear Sir/Madam: As Escrow Agent for both Seagate Technology, a limited company domiciled in the Cayman Islands (the "Company"), and the undersigned recipient of stock of the Company ("Recipient"), you are...

  • Page 189
    ... upon personal delivery or upon deposit in any United States Post Box, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten (10) days' written...

  • Page 190
    C OMPANY : Seagate Technology 920 Disc Drive Scotts Valley, CA 95067 Attn: Chief Financial Officer R ECIPIENT : E SCROW A GENT : Seagate Technology 920 Disc Drive Scotts Valley, CA 95067 Attn: Corporate Secretary 16. By signing these Joint Escrow Instructions you become a party hereto only for ...

  • Page 191
    ...are designed to ensure that the Company's employees and officers ("Employees") and members of its board of directors ("Directors") act in accordance with not only the letter but also the spirit of the laws and regulations that apply to our business. Employees and Directors who violate this Code will...

  • Page 192
    ..., for insider trading violations by their employees and other agents. The Company has a securities trading policy and all Employees and Directors must abide by its terms. This policy, among other things, provides that Employees and Directors may not buy or sell shares of the Company's stock when...

  • Page 193
    ... of the Company's General Counsel or the Company's Chief Executive Officer. Directors who become aware of a conflict or potential conflict, or have questions about whether a conflict exists should bring it to the attention of the Chairman of the Board. Receiving personal benefits as a result...

  • Page 194
    ... should be directed to the Company's General Counsel. 6. Fair Dealing. Each Employee and Director shall endeavor to deal fairly with the Company's shareholders, competitors, customers, suppliers and employees. No Employee or Director shall take unfair advantage of anyone through manipulation...

  • Page 195
    ..., product bookings or shipments, lead times, pricing, suppliers, new products or technologies, or lawsuits or intellectual property disputes. If a member of the financial community contacts an Employee or Director, that Employee or Director must refer the individual to Investor Relations . If...

  • Page 196
    ...of action, and for reporting possible misconduct promptly after it comes to their attention. 1. Designated Ethics Officer. The Company's General Counsel has been designated as the Company's Ethics Officer with responsibility for overseeing and monitoring compliance with the Code. The Ethics Officer...

  • Page 197
    ... this Code, or of applicable laws and regulations (including complaints or concerns about accounting, internal accounting controls, or auditing matters), he or she must report it immediately, either to the Company's General Counsel or Chief Executive Officer, or by calling Seagate's Ethics Helpline...

  • Page 198
    This document is not an employment contract between the Company and any of its Employees or Directors and does not alter the Company's current employment or other relationship with any Employee or Director. Amended and Restated by the Board of Directors on January 31, 2008 8

  • Page 199
    ... Holdings Seagate Technology China Holding Company Seagate Technology Manufacturing (Hong Kong) Limited Seagate Technology (Suzhou) Co. Ltd. Seagate Technology HDD (India) Private Limited Seagate Technology (Ireland) Springtown Northern Ireland Branch Seagate Technology (Malaysia) Holding Company...

  • Page 200
    ... respect to the consolidated financial statements of Seagate Technology, and the effectiveness of internal control over financial reporting of Seagate Technology, included in this Annual Report (Form 10-K) for the year ended June 27, 2008. /s/ Ernst & Young LLP San Jose, California August 12, 2008

  • Page 201
    ... affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2008...

  • Page 202
    ... affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2008...

  • Page 203
    ... of the Annual Report of Seagate Technology (the "Company") on Form 10-K for the fiscal year ended June 27, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"). In connection with the Report we, William D. Watkins, Chief Executive Officer of the Company, and...