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EXHIBIT 10.47
FISCAL YEAR 2001
WESTERN DIGITAL TEAM-BASED INCENTIVE PROGRAM
PURPOSE
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The purpose of this program is to focus
participants on achieving key financial and
strategic objectives at the corporate and
business group levels that will lead to the
creation of value for the Company's
shareholders and provide participants the
opportunity to earn significant awards,
commensurate with performance.
ELIGIBILITY
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Program eligibility is for the Hard Drive
Solutions group of Western Digital and the
Corporate employees supporting them who are
in, or who are hired into, salary grades 68
and above (or equivalent).
Eligibility may also be granted to employees
who have an authorized written agreement that
grants them eligibility.
Employees of Western Digital and its domestic
subsidiaries who are in salary grades 67 or
below (or equivalent) are eligible for awards
generated by a secondary bonus pool.
DESCRIPTION OF THE PROGRAM
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The 2001 Team-Based Incentive Program will pay
as cash awards to participants for the
achievement of predetermined performance
goals. Each participant will be assigned a
pool or target bonus percentage, which when
multiplied by the participant's semi-annual
base salary, will determine the pool or target
bonus semi-annual payout.
Predetermined performance goals were
established and approved by the Compensation
Committee of the Board of Directors.
The actual performance achieved will determine
the percentage used to calculate the award at
the end of the program year. The size of the
actual award can vary between 0% and 200% of
the pool or target award.
In addition, individual and pool awards may be
adjusted upward or downward by the Chief
Executive Officer from the amount generated by
the formula. The Chief Executive Officer's
award may be adjusted upward or downward by
the Compensation Committee.
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OPERATION OF THE PROGRAM
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Program Period: The two semi-annual periods July 1, 2000 to
December 31, 2000 and January 1, 2001 to June
30, 2001.
Award Opportunities: The award for participants will be expressed as
a percentage of salary, and determined
according to salary grade. In general, the
target for this program will be one-half of the
annual Bonus target.
Performance Measures: Performance will be measured at the corporate
and business group levels. Performance measures
that will be used in the 2001 Team-Based
Incentive Program are as follows:
o EBITDA - Earnings Before Income-Taxes
Depreciation and Amortization for the Hard
Drive Solutions business group.
o Time to Market
o Time to Volume
o Time to Quality
Goals and Weighting: Each team will have goals at the corporate,
business group and/or team level, and each goal
will have an assigned weighting.
The percentage of target bonus opportunity
earned (before discretionary adjustments) will
vary from the target bonus opportunity based on
actual performance achieved relative to the
performance goals.
ADDITIONAL PROVISIONS
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Award Thresholds: EBITDA must be at a minimum level for
incentives to be paid under any aspect of the
Program.
In addition, each team may have a predetermined
thresholds below which no incentives will be
paid for that business group.
Total Award Cap: Total awards paid under this Program may not
exceed a 200% of target payout as determined by
the Compensation Committee. Any award
reductions attributable to the preset
percentage cap will be made by the Chief
Executive Officer.
Award Adjustment: Group award levels may be adjusted upward or
downward by the Chief Executive Officer
provided that total awards do not exceed the
amounts generated by the 200% preset targeted
payout.
After application of the group performance,
individual awards may be adjusted upward or
downward based on the adjustment table below.
Approval from the Chief Executive Officer is
required. The Chief Executive Officer's award
may be adjusted upward or downward by the
Compensation Committee. The adjustments by
salary grade level (or equivalent) are as
follows:
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Salary Grade Upward Downward
(or equivalent) Adjustment Adjustment
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All Participants +100% -100%
All awards under this program are
discretionary. The amount of the award
including adjustments is determined by Western
Digital in its sole discretion. No employee has
any contractual right to receive an award
pursuant to this program due to his/her
employment at Western Digital.
Extraordinary Events: The Compensation Committee, in its discretion,
may adjust the basis upon which performance is
measured to reflect the effect of significant
changes that include, but are not limited to,
unbudgeted acquisitions/ divestitures, unusual
or extraordinary accounting items, or
significant, unplanned changes in the economic
or regulatory environment.
Termination: Participants must be employed by the Company at
the end of the semi-annual period to receive an
award. If a participant terminates for reason
of retirement, total and permanent disability,
or death, the Compensation Committee has the
discretion to pay prorated awards based upon
the percentage of the period worked.
Partial Year Participation: The Compensation Committee, in its discretion,
may pay prorated awards to people hired or
promoted into eligible positions. In general,
awards will be prorated for participants who
begin before employment more than 3 months into
the period.
Deferred Payout: Before the end of the calendar year, the
participant may elect to defer payout of all or
part of the award in accordance with Western
Digital's Deferred Compensation Plan. The
deferred amount will be credited with a rate as
specified in the Western Digital's Deferred
Compensation Plan.
Payout of Award: Awards will be paid in cash as soon as possible
following the end of the semi-annual period or
according to the participant's deferral
election.
Secondary Awards: Cash awards may be given to employees who do
not generate pool dollars (employees in salary
grades 67 or below or equivalent) as long as
the overall pool is not exceeded.
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