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EXHIBIT 10.37
July 6, 1999
Xx. Xxxxx X. Xxxxxxx
21 Emerald
Xxxxxx, XX 00000
Dear Xxxx:
This letter, when signed by you, constitutes the agreement ("Agreement")
relative to your resignation from Western Digital Corporation (the "Company").
The terms of this Agreement are as follows:
1. You will continue to work on site in your position as Senior Vice
President, Strategic Customer Relations until October 1, 1999.
1a. You have agreed to serve as Master of Ceremonies at Service Recognition
Dinners in Irvine and San Xxxx during September, 1999.
2. You will continue to be treated as an employee, including stock option
vesting, until the earlier of March 31, 2000 or your death. During such
time you will be available for occasional consulting of up to two days
per month as reasonably agreed by the Company and you. Stock options
previously granted to you under the Employee Stock Option Plan will
continue to vest in accordance with their terms, which during the period
from October 1, 1999 through March 31, 2000 would result in the vesting
of 20,188 to 27,960 additional exerciseable shares.
3. You will be paid $137,500.00 in salary continuation. Thirteen (13)
bi-weekly payments of $10,576.92 will begin on October 15, 1999, and
conclude on March 31, 2000. Your Deferred Compensation Plan balance will
be paid to you within 90 days of March 31, 2000.
4. Any exercise of stock options by you must be in accord with the
provisions of your stock option agreements and with the procedures
relating to exercise as may be established by the Compensation Committee
of the Board of Directors from time to time. All such procedures, unless
they are to your benefit, shall be of general application and will not
apply specifically to you. The Company will act expeditiously and in a
supportive manner in assisting you to exercise your options. You will
have up to 3 months following March 31, 2000 to exercise your vested
options.
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5. Until March 31, 2000, you will continue to receive benefits accorded to
employees generally, other than vacation accruals, and benefits accorded
to you and other executives in comparable pay grades ("special
benefits"), provided that such special benefits continue to be furnished
to executives generally in comparable pay grades. These include:
a) your flex benefit allowance of $339.03 per pay period
b) Employee Stock Purchase Plan (ESPP) will continue and
deductions will be made from your salary continuation
checks until the next purchase date.
c) 401(k) participation and Western Digital employer match
will continue with deductions coming from your salary
continuation checks.
d) Financial planning assistance of up to $5,000 per fiscal
year for executive tax consultation will continue.
e) Supplemental executive medical coverage up to $3,000 per
fiscal year will continue.
f) Auto allowance of $323.08 per pay period.
If any benefits (including special benefits) are discontinued and
adjustments are made to compensation or benefits of employees generally,
or of executives in comparable pay grades, in lieu of the discontinued
benefits, and if such discontinuances apply to you under this agreement,
then in such instances like adjustments will be made to payments or
benefits accorded to you with respect to the period through March 31,
2000. No actions will be taken with respect to the monies payable or the
benefits accorded to you that are intended to affect adversely only you
or other terminating employees, unless such actions are taken as a
result of a material breach by you of any of your obligations under this
agreement. Should you take another position, prior to the expiration of
your salary continuation, as an employee of a company with health
insurance coverages, Western Digital's health coverages stop at the end
of the month in which you start to work for the other company. On May
31, 2000 (sixty days after your termination date), all Western Digital
benefits will cease. You may be entitled to continued basic health
insurance coverage under the Company's COBRA plan. If you so elect, this
continuation will be on terms consistent with applicable federal laws
and regulations. If you elect and are eligible to continue this
coverage, you will be charged a monthly premium to cover the cost of
providing this insurance including a small administrative fee, Our
benefits administration staff will give you complete details in this
regard.
6. You and the Company agree that the terms of this arrangement will be
held in confidence except to the extent that disclosures may be required
by government regulations or judicial process or to receive tax, legal
or financial advice. References which may request information about your
employment will be referred to the Vice President of Human Resources.
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7. By October 15, 1999 you will be paid all accrued, unused vacation.
Although you will continue on the Company payroll through March 31, 2000
you will accrue no more vacation subsequent to October 1, 1999.
8. Any distributions to which you are entitled from the Savings and Profit
Sharing Plan will be made to you in accordance with the terms of that
plan after your termination date of March 31, 2000.
9. The Company will provide executive outplacement assistance through Xxx
Xxxxx Xxxxxxxx or another firm of your choosing if you wish. Contact Xxx
Xxxxx at (000) 000-0000 for assistance with these arrangements.
10. You agree that, for the period beginning October 1, 1999 and ending
March 31, 1999 you will not provide services to a "direct competitor" of
the Company. You and the Company agree that, for purposes of the
Agreement, the terms "direct competitor" shall mean a division of a
business (a) which is a significant direct competitor of the Company as
of the date of this Agreement, and (b) which is currently in the
business of manufacturing and selling Winchester type magnetic hard
drives. Provided, however, that nothing in this Agreement shall prevent
you from accepting employment with another business which is not a
direct competitor with the Company and/or competing with the Company in
a manner consistent with the terms of this Agreement.
11. You agree that, until March 31, 2000, you will observe and be bound by
all fiduciary duties and duties of loyalty which were applicable to you
as an employee of the Company. Additionally, you agree that at any time
prior to March 31, 2000, you will not induce any active employee of the
Company or of any of its subsidiaries, to terminate his or her
employment with the Company or any subsidiary of the Company, unless you
first obtain written permission from the Chief Executive Officer or the
Vice President of Human Resources of the Company, provided however, that
you shall not be considered to have induced an employee to terminate his
or her employment with the Company if you respond to good faith
inquiries by said persons initiated other than by you.
12. In the course of your employment, and because of the nature of your
responsibilities, you have acquired and may continue to acquire
confidential information and trade secrets with regard to the Company's
business operations, including, but not limited to, the names and
addresses of its clients and their respective contact points, marketing
materials, financial data and analysis, technical know-how, business
plans and strategies, forecasts, and other similar information
(collectively the "Confidential Information"). You agree that the
Confidential Information has been developed at considerable expense and
effort by the Company, is not generally known to the public at large, is
not readily ascertainable by
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proper means, has been the subject of reasonable efforts to maintain its
secrecy, and has at all times remained in the exclusive property of the
Company. You agree that you shall not, at any time during or after your
employment with the Company, directly or indirectly disclose, divulge,
reveal, report, publish, transfer, or use, for any purpose, any
Confidential Information which has been obtained by or disclosed to you
as a result of your employment by the Company, including any
Confidential Information, except as may be required by law. You further
agree that any and all of the Confidential Information, including all
intellectual property rights therein, shall be and shall remain the sole
and exclusive property of Western Digital.
13. You and the Company agree that in the event the Company determines in
good faith that you have violated the terms of paragraphs 10, 11, or 12,
the Company may make any remaining unpaid payments due to you pursuant
to paragraph 3 hereof into a third party escrow account pending further
agreement of the parties or the award of an arbitrator pursuant to the
arbitration provisions of this paragraph. The arbitrator shall be
authorized to determine whether the remaining payment obligations under
paragraph 3 of this Agreement shall continue notwithstanding any alleged
breach of this Agreement or are terminated as a result of the alleged
breach. In the event an arbitrator determines that you have violated the
terms of paragraphs 10, 11, or 12, then the arbitrator shall be
authorized to direct payment of the money (including any accrued
interest) from the escrow account to the Company and order that the
Company is not required to make any further payments to you under
paragraph 3, and award the Company any other appropriate remedies.
Additionally, in no event shall you be required to pay to the Company
any payments received prior to the date that the Company notifies you of
the alleged breach of the paragraphs 10, 11, or 12. In the event an
arbitrator determines that you have not violated the terms of paragraphs
10, 11, or 12, then the arbitrator shall be authorized to direct payment
of any money (including accrued interest, if any) held in the escrow
account to you and award you any other appropriate remedies.
14. None of the officers of the Company (i.e. officers elected by the Board
of Directors) have knowledge of any claims which the Company might
assert against you, and for the period that you are and have been
employed by the Company you will be afforded the protections provided
for under the Company's Bylaws, indemnification agreements and the
various insurance policies carried by the Company that would apply to
you.
15. In consideration for the payments and benefits provided to you pursuant
to this Agreement, you hereby irrevocably and unconditionally release,
acquit and forever discharge Western Digital Corporation, all of its
current and former subsidiaries, affiliates, divisions, successors,
predecessors, related corporate entities, assigns, owners,
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stockholders, directors, officers, current and former employees, agents,
representatives, attorneys, insurers and all persons acting by, through,
under or in concert with any of them (collectively "Releasees"), from
any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys' fees
and costs) actually incurred of any nature whatsoever, known or unknown,
suspected or unsuspected ("Claim" or "Claims") which you now have, own
or hold, or claim to have, own or hold, or which you at any time
heretofore had, owned or held, or claimed to have had, owned or held
against any of the Releasees relating to any event, act or omission that
has occurred as of the date of the Agreement, including, but by no means
limited to, any events arising out of your employment with Western
Digital Corporation. The Claims which you are releasing include, but are
not limited to, claims for discrimination, harassment and retaliation
under the California Fair Employment and Housing Act, Title VII of the
Civil Rights Act, the Age Discrimination in Employment Act and public
policy, claims for disability and medical condition discrimination under
the Americans with Disabilities Act and the California Fair Employment
and Housing Act, claims for wrongful termination, breach of implied or
express contract, and breach of the covenant of good faith and fair
dealing, claims for wages, penalties and interest under the California
Wage Orders, the Fair Labor Standards Act and the California Labor Code,
claims for injuries purportedly occurring in the course and scope of
employment, claims under the California Workers' Compensation Act, tort
claims for intentional infliction of emotional distress, defamation, and
all claims like or related to any of the foregoing.
16. You also expressly waive and relinquish all rights and benefits afforded
by Section 1542 of the Civil Code of the State of California, and do so
understanding, and acknowledging the significance and consequence of
such specific waiver of Section 1542. Section 1542 of the Civil Code of
the State of California states as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in their favor at the time of
executing the release, which if known by him must have materially
affected their settlement with the debtor.
Thus, notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and discharge of the
Releasees, you expressly acknowledge that this Agreement is intended to
include in its effect, without limitation, all Claims which you do not
know or suspect to exist in your favor at the time of execution thereof,
and that this Agreement contemplates the extinguishment of any such
Claim or Claims.
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17. You should consult with an attorney concerning this Agreement. By
signing this Agreement, you acknowledge that you have carefully read
this Agreement, understand it and are voluntarily entering into it.
18. The undersigned persons represent and warrant that they have been duly
authorized to execute this agreement on behalf of the person, or
corporations as described below.
19. This agreement shall be construed in accordance with, and all disputes
arising thereunder shall be governed by, the laws of the State of
California.
20. You have up to twenty-one days from the date of your receipt of this
Agreement to consider this Agreement. You also have seven days after
execution of this Agreement to revoke it in writing. This Agreement
shall not be effective or enforceable until the revocation period has
expired.
WESTERN DIGITAL CORPORATION
Xxxx Xxx Xxxxxx
Vice President
Human Resources
JVB: kl
I have read and agree to all terms and conditions as outlined above.
----------------------------------- -----------------------------------
Xxxxx X. Xxxxxxx Date
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MARCH, 2000 STATUS OF BENEFITS UPON
TERMINATION OF EMPLOYMENT - XXXX XXXXXXX
The following information is to help you understand the status of your benefits
if you are affected by a reduction in work force.
MEDICAL INSURANCE
Medical coverage continues until May 31, 2000.
DENTAL INSURANCE
Dental coverage continues until May 31, 2000.
VISION INSURANCE
Vision coverage continues until May 31, 2000.
COBRA CONTINUATION COVERAGE
Continuation privileges may be available through COBRA for the medical, dental,
vision, and health care reimbursement plans you are enrolled in at the time of
termination. COBRA information and election forms will be mailed to you by the
COBRA administrator for Western Digital (COBRAPRO) within two weeks from your
last date of coverage.
LIFE INSURANCE
Life insurance coverage continues until May 31, 2000. Conversion privileges to
an individual policy are available after your coverage terminates. You must
apply with the insurance carrier within 31 days. Conversion forms are available
at the Benefits Department.
ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE (AD&D)
Accidental death and dismemberment insurance coverage continues until May 31,
2000. Conversion privileges to an individual policy are available after your
coverage terminates. You must apply with the insurance carrier within 31 days.
Conversion forms are available at the Benefits Department.
DEPENDENT LIFE INSURANCE
Dependent life insurance coverage continues until May 31, 2000. Conversion
privileges to an individual policy are available after your coverage terminates.
You must apply with the insurance carrier within 31 days. Conversion forms are
available at the Benefits Department.
BUSINESS TRAVEL ACCIDENT COVERAGE
Business travel accident coverage will end on your last active day at work for
Western Digital which is October 1, 1999. Under the terms of the contract, no
conversion privileges are available.
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LONG-TERM DISABILITY
Long-term disability coverage will end on your last active day at work for
Western Digital, October 1, 1999. Conversion privileges to an individual policy
are available by completing an application and submitting the first quarterly
premium within 31 days of our termination of group coverage. To qualify for
conversion, you must have been covered under the current group plan for 12
consecutive months. Conversion forms are available at the Benefits Department.
SHORT-TERM DISABILITY
Short-term disability coverage will end on your last day actively at work for
Western Digital, October 1, 1999, Under the terms of the contract, no conversion
privileges are available.
REIMBURSEMENT ACCOUNTS
If contributions continue to be deducted from scheduled payments, Health Care
and Dependent Care Account claims may be reimbursed for ELIGIBLE EXPENSES
INCURRED UP TO THE LAST DAY OF YOUR BENEFITS COVERAGE. Money left over in the
account(s) at the end of the plan year (June 30) is forfeited. You will have a
90 day grace period (through August 30, 2000) to file a claim for reimbursement.
Send the claims to FlexPro, P. O. Xxx 0000, Xxxxxx, XX 00000. Telephone (949)
000-0000, Fax (000) 000-0000.
MANAGED HEALTH NETWORK (MHN)
The MHN program will continue for you and your dependents until May 31, 2000.
The toll free number is 000-000-0000. However, if you elect COBRA continuation,
you may still be eligible to continue MHN benefits.
RETIREMENT SAVINGS (401(k)) & PROFIT SHARING PLAN
As a participant in this plan, you will continue to participate in the plan
until March 31, 2000. The company match is effective until March 31, 2000. After
that date, you will receive 100% of your employee account, plus 100% of the
profit sharing account, and the vested portion of the employer match account.
For information regarding rollover or distribution of your account, call X. Xxxx
Price at 000-000-0000. If you wish to withdraw your account from the plan,
simply return the termination package that will be sent to you from X. Xxxx
Price. If your account is over $3,500.00, you may defer the withdrawal of your
account until a future point in time,
CONTRIBUTIONS CONTINUE: Contributions will continue to be deducted from wage
continuation payments unless you call X. Xxxx Price at 000-000-0000 to suspend
your contributions.
SAVINGS 401(K) PLAN LOANS: Bi-weekly loan payments will continue to be deducted
from wage continuation payments. You will choose one of the following options to
be effective after your last
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wage continuation payment: 1) continue making loan payments, 2) repay the entire
outstanding loan balance, or 3) elect final distribution upon which any
outstanding loan balance will be treated as a taxable distribution. You must
complete a Loan Repayment form indicating your selection that will be provided
in the X. Xxxx Price termination package.
EMPLOYEE STOCK PURCHASE PLAN
You will continue to participate in ESPP through March 31, 2000. Deductions for
ESPP will be made from your wage continuation checks. If you have previously
purchased shares, then you can keep or sell them as you wish.
STOCK OPTIONS
If you have received stock options, they will vest through your date of
termination from Western Digital in accordance with the plan provisions. Contact
Xxxxxx Xxxxxxx at 000-000-0000 for more information.
VACATION
All earned but unused vacation will be paid by the first wage continuation
payment following your last day of active employment with Western Digital.
Vacation Buy: The cost of the extra hours you have taken but not paid
for will be subtracted from your final paycheck.
Vacation Sell: The remaining amount and any accrued vacation that you
haven't taken is paid to you. Exception: If you term with a negative
vacation balance, the value of those hours will be subtracted from your
final paycheck.
SICK LEAVE
All unused sick leave will be forfeited in accordance with the policy of Western
Digital.
EDUCATIONAL REIMBURSEMENT
If you have received prior educational approval for classes that have started,
but which you will not complete before your termination date, you are eligible
for reimbursement for the classes you are currently attending. Reimbursement
will be made following the company's receipt of proof that the class was
successfully completed based on the policy guidelines.
CREDIT UNION
Membership is lifetime and is not based on continuing employment with Western
Digital
CALIFORNIA STATE UNEMPLOYMENT BENEFITS
You can file an application for unemployment benefits immediately, however your
eligibility for benefits (as determined by the EDD-Employment Development
Department) will be delayed until after your last Wage Continuation payment on
March 31, 2000.
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If you have any questions, need to request forms, or need life conversion forms,
contact:
WESTERN DIGITAL
BENEFITS DEPARTMENT
0000 XXXXXX XXXXXX XXXXX
XXXXXX, XX 00000
000-000-0000
