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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Stock Repurchase Program
WD announced a stock repurchase program on May 5, 2004. Under the program, the Company may purchase on
the open market up to $100 million of its common stock depending on market conditions and other corporate
considerations. Stock repurchases are expected to be funded principally by operating cash flow. During 2005, WD
repurchased 4.8 million shares of common stock at a total cost of $45.0 million. In addition, between July 2, 2005 and
September 9, 2005 the company repurchased 0.4 million shares of common stock at a cost of $5.6 million. Since the
inception of the program, and through September 9, 2005, the Company has repurchased 7.1 million shares for a total
cost of $66.6 million (including commissions). WD may continue to repurchase its stock as it deems appropriate and
market conditions allow.
Stock Purchase Rights
In 1989, the Company implemented a plan to protect shareholders' rights in the event of a proposed takeover of the
Company. Under the plan, each share of the Company's outstanding common stock carried one Right to Purchase
Series A Junior Participating Preferred Stock (the ""Right''). The Right enabled the holder, under certain circumstances,
to purchase common stock of Western Digital or of an acquiring company at a substantially discounted price ten days
after a person or group publicly announces it has acquired or has tendered an offer for 15% or more of the Company's
outstanding common stock. On September 10, 1998, the Company's Board of Directors approved the adoption of a new
Rights plan to replace the previous plan, which expired in September 1998. The Rights under the 1998 plan were similar
to the rights under the 1989 plan except they were redeemable by the Company at $.01 per Right and expired in 2008.
In connection with the establishment of a holding company structure on April 6, 2001, the Company terminated the
Rights under the 1998 plan and adopted a new Rights plan. The 2001 plan is similar to the terminated 1998 plan,
except that the exercise price was reduced from $150.00 to $50.00 per share and the expiration date for the 2001 Rights
plan was extended to April 2011.
Note 8. The Western Digital Corporation 401(k) Plan
Effective July 1, 1991, the Company adopted the Western Digital Corporation 401(k) Plan (the ""Plan'') formerly
known as the Western Digital Corporation Retirement Savings and Profit Sharing Plan. The Plan covers substantially all
domestic employees, subject to certain eligibility requirements. The Company may make annual contributions to the Plan
at the discretion of the Board of Directors. For 2005, 2004 and 2003 the Company made contributions to the Plan of
$3.0 million, $2.9 million and $1.8 million, respectively.
Note 9. Business Segment, International Operations and Major Customers
Segment Information
As of July 1, 2005, the Company operated in one segment, the hard disk drive business.
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