Seagate 2007 Annual Report Download - page 91

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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(
Continued)
Revolving Credit Facility. HDD has a senior unsecured $500 million revolving credit facility that matures in September 2011. The credit
agreement that governs the Company’s revolving credit facility contains covenants that must be satisfied in order to remain in compliance with
the agreement. The credit agreement contains three financial covenants: (1) minimum cash, cash equivalents and marketable securities; (2) a
fixed charge coverage ratio; and (3) a net leverage ratio. As of June 27, 2008, the Company is in compliance with all covenants.
The $500 million revolving credit facility is available for cash borrowings and for the issuance of letters of credit up to a sub-limit of
$100 million. Although no borrowings have been drawn under this revolving credit facility to 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, including a limit of $300 million in
any four consecutive quarters.
At June 27, 2008, future minimum principal payments on long-term debt were as follows (in millions):
Included in future minimum principal payments on long-term debt for fiscal year 2009 is the principal amount of $326 million related to
our 2.375% Notes, which are payable upon conversion and are currently convertible, as the Company’s share price was in excess of 110% of the
conversion price for at least 20 consecutive trading days during the last 30 trading days of the fourth quarter of fiscal year 2008. Unless earlier
converted, the 2.375% Notes must be redeemed in August 2012.
3. Compensation
Fiscal Year
2009
$
361
2010
441
2011
5
2012
630
2013
—
Thereafter
600
$
2,037
Tax
-
Deferred Savings Plan
The Company has a tax-deferred savings plan, the Seagate 401(k) Plan (“the 40l(k) plan”), for the benefit of qualified employees. The 40l
(k) plan is designed to provide employees with an accumulation of funds at retirement. Qualified employees may elect to make contributions to
the 401(k) plan on a monthly basis. Pursuant to the 401(k) plan, the Company matches 50% of employee contributions, up to 6% of
compensation, subject to maximum annual contributions of $2,500 per participating employee. During fiscal years 2008, 2007 and 2006, the
Company made matching contributions of $15 million, $15 million and $13 million, respectively.
Stock-Based Benefit Plans
The Company’s stock-based benefit plans have been established to promote the Company’s long-term growth and financial success by
providing incentives to its employees, directors, and consultants through grants of share-based awards. The provisions of the Company’s stock-
based benefit plans, which allow for the grant of various types of equity-
based awards, are also intended to provide greater flexibility to maintain
the Company’s competitive ability to attract, retain and motivate participants for the benefit of the Company and its shareholders.
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