EX. 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into by and
between Western Digital Corporation (the "Company") and Xxxx Xxxxxxx
("Executive"), as of the 25th day of August, 2005 ("Effective Date").
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 January 1, 2008 ("Employment Period").
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
January 1, 2008, Executive shall serve as President and Chief Executive Officer
of Western Digital Corporation. In this capacity, Executive shall report to the
Board of Directors, and shall have such duties and responsibilities consistent
with his position as President and Chief Executive Officer as the Board of
Directors of the Company shall determine from time to time.
C. 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.
3. COMPENSATION.
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 January 1, 2008, 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.
B. Bonus. Executive's target annual bonus each fiscal year during the
Employment Period (including with respect to the first half of fiscal 2006) for
purposes of the Company's semi-annual bonus program for such fiscal period shall
be 100% of his base salary from the Company in effect on the last day of such
fiscal period.
C. Retirement and Welfare Benefit Plans; Fringe Benefits. Executive (and,
in the case of welfare benefit plans, his eligible dependents, as the case may
be), shall be eligible for participation in the retirement, welfare, and fringe
benefit plans, practices, policies and programs provided by the Company on terms
consistent with those generally applicable to the Company's other senior
executives and approved by the Compensation Committee of the Board of Directors.
D. Expenses. Executive shall be entitled to receive prompt reimbursement
for all reasonable employment expenses incurred by him in accordance with the
policies, practices and procedures as in effect generally with respect to other
executives of the Company.
E. Vacation and Other Leave. During the Employment Period, Executive shall
receive eight (8) weeks paid vacation per year. Such vacation shall be scheduled
and taken in accordance with the Company's standard vacation policies applicable
to Company executives. Executive shall also be entitled to all other holiday and
leave pay generally available to other executives of the Company.
F. Modification. The Company reserves the right to modify, suspend or
discontinue any and all of the above plans, practices, policies and programs at
any time without recourse by Executive so long as such action is taken generally
with respect to other senior executives of the Company and does not single out
Executive.
4. RESTRICTED STOCK; OTHER EQUITY AWARDS.
A. The Company shall grant Executive an award of 1,250,000 restricted
shares of Common Stock of the Company (of this total, 500,000 shares shall vest
on January 1, 2007 and 750,000 shares shall vest on January 1, 2008, subject to
Executive's continued employment by the Company through such vesting date, or
except as otherwise expressly provided in Section 5.C(ii) or the restricted
stock award agreement), such award evidenced by and subject to the terms and
conditions of a restricted stock award agreement in substantially the form
attached hereto.
B. 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 December 31, 2007; (ii) the
restricted shares of Company Common Stock previously granted by the Company to
Executive (for purposes of clarity, other than those granted pursuant to Section
4.A above) that are currently outstanding but only to the extent that such
restricted shares are scheduled (without giving effect to any accelerated
vesting provision) to vest after December 31, 2007 (which shares are hereby
transferred from the Executive to the Company); and (iii) the entire Performance
Share Award granted by the Company to Executive on or about January 20, 2005.
Executive shall promptly deliver to the Company any share certificates
evidencing the shares of restricted stock covered by clause (ii) of the
preceding sentence 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.
C. Other than the bonus opportunity contemplated by Section 3.B and the
restricted stock award contemplated by Section 4.A, Executive shall have no
right to any other annual or long-term incentive compensation or option,
restricted stock, equity or other awards with respect to his employment during
the Employment Period.
5. TERMINATION.
A. Cause. The Company may terminate Executive's employment for Cause. For
purposes of this Agreement, "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 of President and Chief Executive
Officer, or (iv) a conviction of or a plea of nolo contendre to a felony.
B. Other than Cause. The Company may terminate Executive's employment at
any time, with or without cause, upon 30 days' written notice.
C. Obligations of the Company Upon Termination.
(i) Cause. If Executive's employment is terminated by the Company for
Cause, this Agreement shall terminate without further obligations to Executive
other than for the timely payment of the sum of (i) Executive's annual base
salary through the date of termination to the extent not theretofore paid and
(ii) any compensation previously deferred by Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the amounts described in clauses
(i) and (ii) shall be hereinafter referred to as the "Accrued Obligations"). If
it is subsequently determined that the Company did not have Cause for
termination under this Section 5.C(i), then the Company's decision to terminate
shall be deemed to have been made under Section 5.C(ii), and the amounts payable
thereunder shall be the only amounts Executive may receive for his termination.
(ii) Other than Cause. If the Company terminates Executive's employment for
other than Cause, this Agreement shall terminate without further obligations to
Executive other than:
(a) a lump sum cash payment equal to the base salary and target
bonus (at 100% of target) for the remainder of the Employment Period; and
(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 January 1, 2008.
Executive's rights as to any options and other equity-based awards granted by
the Company that are outstanding at the time Executive's employment with the
Company terminates, to the extent such awards are then vesting (after giving
effect to any accelerated vesting contemplated by this clause), shall be
governed by the terms and conditions of the applicable award agreement and
incentive plan under which the option or other award, as applicable, was
granted.
D. Exclusive Remedy. Executive agrees that the payments contemplated by
this Agreement shall constitute the exclusive and sole remedy for any
termination of his employment, and Executive covenants not to assert or pursue
any other remedies, at law or in equity, with respect to any termination of
employment.
6. CONFIDENTIALITY AND INVENTION.
Executive has previously executed an Employee Invention and Confidentiality
Agreement ("Invention Agreement"), dated June 4, 1999, which is incorporated
herein as if fully set forth. In the event of an inconsistency between a
provision of this Agreement and a provision of the Invention Agreement, the
provision of this Agreement controls.
7. LITIGATION ASSISTANCE.
Executive agrees to cooperate with the Company in any actual or threatened
litigation that arises against or brought by the Company at any time during or
after the Employment Period, including but not limited to participating in
interviews with the Company's counsel to assist the Company in any such
litigation.
8. ARBITRATION.
Any controversy arising out of or relating to Executive's employment, this
Agreement, its enforcement or interpretation, or because of an alleged breach,
default, or misrepresentation in connection with any of its provisions, shall be
submitted to arbitration in Orange County, California, before a sole arbitrator
selected from Judicial Arbitration and Mediation Services, Inc., Orange County,
California, or its successor ("JAMS"), or if JAMS is no longer able to supply
the arbitrator, such arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Civil Procedure Code xx.xx. 1280 et seq. as the exclusive remedy of
such dispute; provided, however, that provisional injunctive relief may, but
need not, be sought in a court of law while arbitration proceedings are pending,
and any provisional injunctive relief granted by such court shall remain
effective until the matter is finally determined by the Arbitrator. Final
resolution of any dispute through arbitration may include any remedy or relief
which the Arbitrator deems just and equitable. Any award or relief granted by
the Arbitrator hereunder shall be final and binding on the parties hereto and
may be enforced by any court of competent jurisdiction. The parties agree that
they are hereby waiving any rights to trial by jury in any action, proceeding or
counterclaim brought by either of the parties against the other in connection
with any matter whatsoever arising out of or in any way connected with this
Agreement or Executive's employment.
9. SUCCESSORS.
A. This Agreement is personal to Executive and shall not, without the prior
written consent of the Company, be assignable by Executive.
B. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns and any such successor or assignee shall
be deemed substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" and "assignee" shall include any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires the stock of the
Company or to which the Company assigns this Agreement by operation of law or
otherwise.
10. WAIVER.
No waiver of any breach of any term or provision of this Agreement shall be
construed to be, nor shall be, a waiver of any other breach of this Agreement.
No waiver shall be binding unless in writing and signed by the party waiving the
breach.
11. MODIFICATION.
This Agreement shall not be modified by any oral agreement, either express
or implied, and all modifications hereof shall be in writing and signed by the
parties hereto.
12. SAVINGS CLAUSE.
If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
13. COMPLETE AGREEMENT.
This Agreement (and all other agreements, exhibits, and schedules referred
to in this Agreement, including without limitation the Invention Agreement)
constitutes and contains the entire agreement and final understanding concerning
Executive's employment with the Company and the other subject matters addressed
herein between the parties. It is intended by the parties as a complete and
exclusive statement of the terms of their agreement. It supersedes and replaces
all prior negotiations and all agreements proposed or otherwise, whether written
or oral, concerning the subject matter hereof. Any representation, promise or
agreement not specifically included in this Agreement shall not be binding upon
or enforceable against either party. This is a fully integrated agreement.
14. GOVERNING LAW.
This Agreement shall be deemed to have been executed and delivered within
the County of Orange, State of California and the rights and obligations of the
parties hereunder shall be construed and enforced in accordance with, and
governed by, by the laws of the State of California without regard to principles
of conflict of laws.
15. CONSTRUCTION.
Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
16. COMMUNICATIONS.
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered or if mailed
by registered or certified mail, postage prepaid, addressed to Executive at
Western Digital Corporation, 00000 Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxx
00000, or addressed to the Company at: Western Digital Corporation, Attn.
Corporate Secretary, 00000 Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000.
Either party may change the address at which notice shall be given by written
notice given in the above manner.
17. EXECUTION.
This Agreement is being executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Photographic copies of such signed counterparts may be used
in lieu of the originals for any purpose.
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In witness whereof, the parties hereto have executed this Agreement 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
