Western Digital 2013 Annual Report Download - page 78

WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(1) Net revenue is attributed to geographic regions based on the ship to location of the customer.
Major Customers
For 2013 and 2011, no single customer accounted for 10%, or more, of the Company’s net revenue. For 2012,
sales to Hewlett Packard Company accounted for 11% of the Company’s net revenue. For 2013, 2012, and 2011, sales
to the Company’s top ten customers accounted for 44%, 50% and 49% of the Company’s net revenue, respectively.
Note 7. Western Digital Corporation 401(k) Plan
The Company has adopted the Western Digital Corporation 401(k) Plan (the “Plan”). The Plan covers substantially
all domestic employees, subject to certain eligibility requirements. The Company makes a basic matching contribution
on behalf of each participating eligible employee equal to fifty percent (50%) of the eligible participant’s pre-tax con-
tributions for the contribution cycle not to exceed 5% of the eligible participant’s compensation; provided, however, that
each eligible participant shall receive a minimum annual basic matching contribution equal to fifty percent (50%) of the
first $4,000 of pre-tax contributions for any calendar year. The Plan was amended effective January 1, 2013, to provide
for a year-end true-up matching contribution such that participants who save at least 5% of their eligible compensation
for the year receive a minimum annual matching contribution equal to 2.5% of eligible compensation (up to Internal
Revenue Service (“IRS”) limitations). Company contributions vest over a 5-year period of employment. For 2013, 2012,
and 2011, the Company made Plan contributions of $19 million, $12 million and $9 million, respectively.
Note 8. Shareholders’ Equity
Stock Incentive Plans
In addition to awards assumed in connection with the Acquisition, the Company maintains four stock-based
incentive plans (collectively, including the assumed HGST awards, referred to as the “Stock Plans”): the amended and
restated 2004 Performance Incentive Plan, the Employee Stock Option Plan, the Broad-Based Stock Incentive Plan
and the Stock Option Plan for Non-Employee Directors. No new awards may be granted under the Employee Stock
Option Plan, the Broad-Based Stock Incentive Plan or the Stock Option Plan for Non-Employee Directors
(collectively referred to as the “Prior Stock Plans”). As of June 28, 2013, options to purchase 194,409 shares of the
Company’s common stock remained outstanding and exercisable under the Employee Stock Option Plan. Other than
for such options, no restricted stock or other awards were outstanding under the Prior Stock Plans as of June 28, 2013.
Options granted under the Prior Stock Plans expire either five or ten years from the date of grant.
The types of awards that may be granted under the 2004 Performance Incentive Plan include stock options,
SARs, restricted stock units, stock bonuses and other forms of awards granted or denominated in the Company’s
common stock or units of the Company’s common stock, as well as cash bonus awards. Persons eligible to receive
awards under the 2004 Performance Incentive Plan include officers and employees of the Company or any of its sub-
sidiaries, directors of the Company and certain consultants and advisors to the Company or any of its subsidiaries. The
vesting of awards under the Performance Incentive Plan is determined at the date of grant. Each award expires on a
date determined at the date of grant; however, the maximum term of options and SARs under the 2004 Performance
Incentive Plan is ten years after the grant date of the award. RSUs granted under the 2004 Performance Incentive Plan
typically vest over periods ranging from one to five years from the date of grant. To the extent available, the Company
issues shares out of treasury stock upon the vesting of awards or the exercise of employee stock options and ESPP.
As of June 28, 2013, the maximum number of shares of the Company’s common stock that was authorized for
award grants under the 2004 Performance Incentive Plan was 48.8 million shares. Any shares subject to awards under
the Prior Stock Plans that are canceled, forfeited or otherwise terminate without having vested or been exercised, as
applicable, will become available for other award grants under the 2004 Performance Incentive Plan. Shares issued in
respect of stock options and SARs granted under the 2004 Performance Incentive Plan count against the plan’s share
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