EXHIBIT 10.4
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement ("Amendment") is entered into by
and between Western Digital Corporation (the "Company") and Xxxx Xxxxxxx
("Executive"), as of the 31st day of October, 2006.
Company and Executive hereby amend Executive's August 25, 2005
Employment Agreement (the "Employment Agreement") as follows:
1. Amendment of Section 1 (Employment). Section 1 of the Employment
Agreement is hereby amended and restated in its entirety to provide as follows:
"1. EMPLOYMENT.
The Company hereby employs Executive and Executive hereby
accepts such employment, upon the terms and conditions hereinafter set
forth, from the Effective Date to and including June 29, 2007
("Employment Period"). Executive and Company agree that this Agreement
shall expire and Executive's employment with the Company shall terminate
at the close of business on June 29, 2007, without further action by
either Company or Executive."
2. Amendment of Section 2 (Duties). Section 2 of the Employment
Agreement is hereby amended and restated in its entirety to provide as follows:
"2. DUTIES.
A. President. From the Effective Date until September 30, 2005,
Executive shall continue to serve as President and Chief Operating
Officer of the Company, and shall report to the Company's Chief
Executive Officer.
B. President and Chief Executive Officer. From October 1, 2005
through May 31, 2006, Executive shall serve as President and Chief
Executive Officer of Western Digital Corporation. From June 1, 2006
through January 1, 2007, Executive shall serve as Chief Executive
Officer of Western Digital Corporation. In these capacities, Executive
shall report to the Board of Directors, and shall have such duties and
responsibilities consistent with his positions as President and/or Chief
Executive Officer as the Board of Directors of the Company shall
determine from time to time.
C. Special Advisor to the Chief Executive Officer. From January
2, 2007 through June 29, 2007, Executive shall serve as Special Advisor
to the Chief Executive Officer. In this capacity, Executive shall report
to the Board of Directors of the Company and shall provide advice and
counsel to the Chief Executive Officer with respect to strategic,
management, and operational matters.
D. Executive agrees to devote substantially all of his time,
energy and ability to the business of the Company, subject to paragraph
E of Section 3."
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3. Amendment of Section 3 (Compensation). Section 3.A of the Employment
Agreement is hereby amended and restated in its entirety to provide as follows:
"A. Base Salary. From the Effective Date through September 30,
2005, the Company will pay to Executive a base salary at the rate of
$700,000 per year. From October 1, 2005 through June 29, 2007, the
Company will pay to Executive a base salary at the rate of $800,000 per
year. Such salary shall be earned monthly and shall be payable in
periodic installments in accordance with the Company's customary
practices. Amounts payable shall be reduced by standard withholding and
other authorized deductions."
4. Equity Awards.
(a) Notwithstanding anything in the Employment Agreement to the
contrary, and subject to Executive's continued employment with the Company
through June 29, 2007, or except as otherwise expressly provided in Section
5.C(ii) of the Employment Agreement or in the applicable restricted stock award
agreement: (i) 158,333 restricted shares of Common Stock of the Company that
comprise a portion of the restricted stock award previously granted by the
Company to the Executive on January 20, 2005 that are scheduled to vest on July
31, 2007 shall become fully vested on June 29, 2007; and (ii) 659,200 restricted
shares of Common Stock of the Company that comprise a portion of the restricted
stock award previously granted by the Company to the Executive on August 25,
2005 pursuant to Section 4.A of the Employment Agreement that are scheduled to
vest on January 1, 2008 shall become fully vested on June 29, 2007.
(b) Notwithstanding anything in the Employment Agreement to the
contrary, the following awards are hereby terminated and Executive shall have no
further rights with respect thereto or in respect thereof: (i) the stock options
previously granted by the Company to Executive that are currently outstanding
but only to the extent that such options are scheduled (without giving effect to
any accelerated vesting provision) to vest after June 29, 2007 and before
January 1, 2008; and (ii) 90,800 restricted shares of Common Stock of the
Company that comprise a portion of the restricted stock award previously granted
by the Company to the Executive on August 25, 2005 pursuant to Section 4.A of
the Employment Agreement that were scheduled to vest on January 1, 2008 (which
shares are hereby transferred from the Executive to the Company). Executive
shall promptly deliver to the Company any share certificates evidencing the
shares of restricted stock covered by clause (ii) above and shall timely provide
the Company with such additional documents of transfer that the Company may
reasonably request to confirm the transfer of such shares to the Company.
5. Amendment of Section 5 (Termination).
9 (a) The definition of "Cause" in the second sentence of Section
5.A of the Employment Agreement is hereby amended and restated in its entirety
to provide as follows:
"'Cause' shall mean that the Company, acting in good faith
based upon the information then known to the Company, determines that
Executive has engaged in or committed: (i) willful misconduct, (ii)
fraud, (iii) failure or refusal to perform the duties
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of Chief Executive Officer or Special Advisor to the Chief Executive
Officer, as the case may be, or (iv) a conviction or plea of nolo
contendre to a felony."
(b) The first sentence of Section 5.C(ii)(b) of the Employment
Agreement is hereby amended and restated in its entirety to provide as follows:
"(b) accelerated vesting of any and all options and other
equity-based awards granted by the Company that are then outstanding and
not otherwise fully vested, but only to the extent such awards would
have otherwise become vested had Executive remained employed by the
Company through June 29, 2007."
(c) Section 5.C of the Employment Agreement is hereby amended to
add the following provision as Section 5.C(iii) of the Employment Agreement:
"(iii) Expiration. Upon the expiration of this Agreement, this
Agreement shall terminate without further obligations to Executive other
than the timely payment of Accrued Obligations and the payment to
Executive of an Incentive Compensation Plan ("ICP") bonus with respect
to the second half of fiscal year 2007 at such time and in such amount
as determined by the Compensation Committee of the Board of Directors on
a Company-wide basis."
6. Effective Date of Amendment. Notwithstanding any earlier execution of
this Amendment by the Company and/or Xxxx Xxxxxxx, this Amendment will be
effective as of the date that the Company and Xxxx Xxxxx, the Company's current
President and Chief Operating Officer, enter into an agreement providing for the
appointment of Xxxx Xxxxx to the position of President and Chief Executive
Officer, effective as of January 2, 2007.
7. Miscellaneous. Any capitalized term used in this Amendment that is
not defined in this Amendment shall have the definition of such term as set
forth in the Employment Agreement. Except as modified by this Amendment, all
other terms and conditions of the Employment Agreement remain valid and in full
force and effect. If any provision of this Amendment is inconsistent with any
provision of the Employment Agreement, the provisions of this Amendment shall
govern.
[Remainder of Page Intentionally Left Blank.]
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In witness whereof, the parties hereto have executed this Amendment as
of the date first above written.
THE COMPANY:
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President, Administration,
General Counsel and Secretary
EXECUTIVE:
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
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