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EXHIBIT 10.3
SEAGATE TECHNOLOGY
EMPLOYEE STOCK PURCHASE PLAN
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(Restated August 6, 1987)
(As Amended Through October 27, 1994)
(As Amended Through April, 1997)
(As Amended Through August, 1998)
The following constitutes the provisions of the Employee Stock Purchase
Plan (herein called the "Plan") of Seagate Technology (herein called the
"Company").
1. Purpose. The purpose of the Plan is to provide employees of the
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Company and its Designated Subsidiaries (as defined in paragraph 2(f)) with an
opportunity to purchase Common Stock of the Company through payroll deductions.
It is the intention of the Company that the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986 (the
"Code"). The provisions of the Plan shall, accordingly, be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.
2. Definitions.
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(a) "Board" means the Board of Directors of the Company.
(b) "Common Stock" means the Common Stock, $0.01, of the Company.
(c) "Compensation" means base pay, excluding all other emoluments
such as amounts attributable to overtime, shift premium, incentive compensation,
bonuses and commissions; except that commissions paid with respect to the
Company's sales activities shall be treated as a part of base pay. The Board or
its Committee (as defined in Paragraph 13) may specifically direct the
inclusions of any excluded item of compensation in a manner consistent with the
requirements of
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Section 423 of the Code, as provided in Paragraph 1, but subject to the
limitations contained in Paragraph 19 hereof.
(d) "Employee" means any person, including an officer, who is employed by
the Company or one of its Designated Subsidiaries.
(e) "Subsidiary" means any corporation, domestic or foreign, in which the
Company owns, directly or indirectly, 50% or more of the voting shares.
(f) "Designated Subsidiaries" means the Subsidiaries which have been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
(g) "Offering Date" means the first day of each offering period of the
Plan.
(h) "Termination Date" means the last day of each offering period of the
Plan.
3. Eligibility.
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(a) General Rule. Any employee, as defined in paragraph 2, who has been
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employed by the Company or one of its Designated Subsidiaries for at least 30
days prior to the Offering Date shall be eligible to participate in the Plan,
subject to the limitations imposed by Section 423(b) of the Code.
(b) Exceptions. Any provisions of the Plan to the contrary
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notwithstanding, no employee shall be granted an option under the Plan if,
(i) immediately after the grant, such employee (or any other person whose
stock ownership would be attributed to such employee pursuant to Section
425(d) of the
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Code) would own shares and/or hold outstanding options to purchase shares
possessing five percent (5%) or more of the total combined voting power
or value of all classes of shares of the Company or of any subsidiary of
the Company, or
(ii) the rate of withholding under such option would permit the employee's
rights to purchase shares under all employee stock purchase plans of the
Company and its subsidiaries to accrue (i.e., become exercisable) at a
rate which exceeds Twelve Thousand Five Hundred Dollars ($12,500) of fair
market value of such shares (determined at the time such option is
granted) for each offering period.
4. Offerings. The Plan shall be implemented by one offering during each
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six month period of the Plan, commencing on September 24, 1981, the date of
effectiveness with the Securities and Exchange Commission of the Company's
Registration Statement on Form S-1 relating to its initial public offering and
continuing thereafter until terminated in accordance with paragraph 19 hereof.
5. Participation.
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(a) An eligible employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions on the form
provided by the Company and filing it with the Company's payroll office not less
than 15 days prior to the applicable Offering Date, unless a later time for
filing the subscription agreement is set by the Board for all eligible employees
with respect to a given offering.
(b) Payroll deductions for a participant shall commence with the first
payroll following the Offering Date, or the first payroll following the date of
valid filing of the subscription
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agreement, whichever is later, and shall end on the Termination Date of the
offering, unless sooner terminated by the participant as provided in paragraph
10.
6. Payroll Deductions.
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(a) At the time a participant files his subscription agreement, he shall
elect to have payroll deductions made on each payday during the offering period
at a rate not exceeding ten percent (10%), or such other maximum rate as may be
determined from time to time by the Board, of the Compensation which he would
otherwise receive on such payday, provided that the aggregate of such payroll
deductions during the offering period shall not exceed ten percent (10%), or
such other maximum percentage as may be determined from time to time by the
Board, of the Compensation which he would otherwise have received during said
offering period.
(b) All payroll deductions authorized by a participant shall be credited
to his account under the Plan. A participant may not make any additional
payments into such account.
(c) A participant may discontinue his participation in the Plan as
provided in paragraph 10, but may not decrease or increase the rate of his
payroll deductions during the offering period.
7. Grant of Option.
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(a) On each Offering Date, each participant shall be granted an option to
purchase (at the option price) the number of full shares of the Company's Common
Stock arrived at by dividing such participant's total payroll deductions
accumulated during such offering period by the lower of (i) eighty-five percent
(85%) of the fair market value of a share of the Company's Common
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Stock at the Offering Date, or (ii) eighty-five percent (85%) of the fair market
value of a share of the Common Stock of the Company at the Termination Date,
subject to the limitations set forth in paragraphs 3(b) and 12 hereof. The fair
market value of a share of the Company's Common Stock shall be determined as
provided in paragraph 7(b) herein.
(b) The option price per share of such shares shall be the lower of: (i)
85% of the fair market value of a share of the Common Stock of the Company at
the Offering Date; or (ii) 85% of the fair market value of a share of the Common
Stock of the Company at the Termination Date unless: (a) the number of shares
available for grant on the first day of the offering period is less than the
number of shares required to be issued for that offering period, and (b) the
fair market value of the Company's stock on the date additional shares are
authorized by the stockholders is higher than it was on the first day of the
offering period, in which case the offering price shall be the lower of (i) 85%
of the fair market value on the date additional shares are authorized by the
stockholders or (ii) 85% of the fair market value on the last day of the
offering period. The fair market value of the Company's Common Stock on said
dates shall be determined by the Company's Board of Directors, based upon such
factors as the Board determines relevant; provided, however, that if there is a
public market for the Common Stock, the fair market value of a share of Common
Stock on a given date shall be the reported bid price for the Common Stock as of
such date; or, in the event that the Common Stock is listed on a stock exchange,
the fair market value of a share of Common Stock shall be the closing price on
the exchange as of such date.
8. Exercise of Option. Unless a participant withdraws from the Plan as
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provided in paragraph 10, his option for the purchase of shares will be
exercised automatically at the Termination Date, and the minimum number of full
shares subject to option will be purchased for
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him at the applicable option price with the accumulated payroll deductions in
his account. During his lifetime, a participant's option to purchase shares
hereunder is exercisable only by him.
9. Delivery. As promptly as practicable after the Termination Date of each
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offering, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise of
his option. Any cash remaining to the credit of a participant's account under
the Plan after a purchase by him of shares at the Termination Date of each
offering period shall be returned to said participant.
10. Withdrawal; Termination of Employment.
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(a) A participant may withdraw all, but not less than all, the payroll
deductions credited to his account under the Plan at any time prior to the
Termination Date by giving written notice to the Company on a form provided for
such purpose. All of the participant's payroll deductions credited to his
account will be paid to him as soon as practicable after receipt of his notice
of withdrawal, and his option for the current offering period will be
automatically cancelled, and no further payroll deductions for the purchase of
shares will be made during such offering period.
(b) Upon termination of the participant's employment for any reason,
including retirement or death, the payroll deductions accumulated in his account
will be returned to him as soon as practicable after such termination or, in the
case of his death, to the person or persons entitled thereto under paragraph 14,
and his option will be automatically cancelled.
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(c) A participant's withdrawal from an offering will not have any effect
upon his eligibility to participate in a succeeding offering or in any similar
plan which may hereafter be adopted by the Company.
11. Interest. No interest shall accrue on the payroll deductions of a
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participant in the Plan.
12. Stock.
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(a) The maximum number of shares of the Company's Common Stock which shall
be reserved for sale under the Plan shall be 19,600,000 shares, subject to
further adjustment upon changes in capitalization of the Company as provided in
paragraph 18. The shares to be sold to participants in the Plan may be, at the
election of the Company, either treasury shares or shares authorized but
unissued. If the total number of shares which would otherwise be subject to
options granted pursuant to paragraph 7(a) hereof at the Offering Date exceeds
the number of shares then available under the Plan (after deduction of all
shares for which options have been exercised or are then outstanding), the
Company shall make a pro rata allocation of the shares remaining available for
option grant in as uniform and equitable a manner as is practicable. In such
event, the Company shall give written notice of such reduction of the number of
shares subject to the option to each participant affected thereby and shall
return any excess funds accumulated in each participant's account as soon as
practicable after the termination date of such offering period.
(b) The participant will have no interest or voting right in shares covered
by his option until such option has been exercised.
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(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his spouse.
13. Administration. The Plan shall be administered by the Board of Directors
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of the Company or a committee (the "Committee") appointed by the Board. The
administration, interpretation or application of the Plan by the Board or the
Committee shall be final, conclusive and binding upon all participants. Members
of the Board or the Committee who are eligible employees are permitted to
participate in the Plan, provided that:
(a) Members of the Board who are eligible to participate in the Plan may
not vote on any matter affecting the administration of the Plan or the grant of
any option pursuant to the Plan.
(b) No member of the Board who is eligible to participate in the Plan may
be counted in determining the existence of a quorum at any meeting of the Board
during which action is taken with respect to the granting of options pursuant to
the Plan.
(c) If a Committee is established to administer the Plan, no member of the
Board who is eligible to participate in the Plan may be a member of the
Committee.
14. Designation of Beneficiary.
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(a) A participant may file a written designation of a beneficiary who is to
receive shares and/or cash, if any, from the participant's account under the
Plan in the event of such participant's death at a time when cash or shares are
held for his account.
(b) Such designation of beneficiary may be changed by the participant at
any time by written notice. In the event of the death of a participant in the
absence of a valid designation of a
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beneficiary who is living at the time of such participant's death, the Company
shall deliver such shares and/or cash to the executor or administrator of the
estate of the participant; or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver such shares and/or cash to the spouse or to any one or more dependents
or relatives of the participant; or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a
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participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in paragraph 14 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with paragraph 10.
16. Use of Funds. All payroll deductions received or held by the
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Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each
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participant in the Plan. Statements of account will be given to participating
employees semi-annually as soon as practicable following the Termination Date,
which statements will set forth the amounts of payroll deductions, the per share
purchase price, the number of shares purchased and the remaining cash balance,
if any.
18. Adjustments Upon Changes in Capitalization. Subject to any required
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action by the shareholders of the Company, the number of shares of Common Stock
covered by each option under
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the Plan which has not yet been exercised and the number of shares of Common
Stock which have been authorized for issuance under the Plan but have not yet
been placed under option (collectively, the "Reserves"), as well as the price
per share of Common Stock covered by each option under the Plan which has not
yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split or the payment of a stock dividend (but only on the Common Stock) or any
other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration". Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to option.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.
19. Amendment or Termination. The Board of Directors of the Company
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may at any time terminate or amend the Plan. No such termination will affect
options previously granted, nor may an amendment make any change in any option
theretofore granted which adversely affects the
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rights of any participant, nor may an amendment be made without prior approval
of the shareholders of the Company if such amendment would:
(a) Increase the number of shares that may be issued under the
Plan;
(b) Materially modify the requirements as to eligibility for
participation in the Plan; or
(c) Materially increase the benefits which may accrue to
participants under the Plan.
20. Notices. All notices or other communications by a participant to
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the Company in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
21. Shareholder Approval. Continuance of the Plan shall be subject
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to approval by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present or represented and entitled to vote
thereon, which approval shall be:
(a) (1) solicited substantially in accordance with Section 14(a)
of the Securities Act of 1934, as amended (the "Act") and the rules and
regulations promulgated thereunder, or (2) solicited after the Company has
furnished in writing to the holders entitled to vote substantially the same
information concerning the Plan as that which would be required by the rules and
regulations in effect under Section 4(a) of the Act at the time such information
is furnished; and
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(b) obtained at or prior to the first annual meeting of
shareholders held subsequent to the first registration of Common Stock under
Section 12 of the Act.
In the case of approval by written consent, the shares
"present or represented" shall mean all outstanding shares.
22. Conditions Upon Issuance of Shares. Shares shall not be issued
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with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option and if required by applicable
securities laws, the Company may require the participant for whose account the
option is being exercised to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
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SEAGATE TECHNOLOGY
EMPLOYEE STOCK PURCHASE PLAN
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SUBSCRIPTION AGREEMENT
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______ Original Application
______ Change in Payroll Deduction Rate
______ Change of Beneficiary(ies)
1. ___________________________________ hereby elects to participate in the
SEAGATE TECHNOLOGY Employee Stock Purchase Plan (the "Plan") and subscribes
to purchase shares of the Company's Common Stock in accordance with this
Agreement and the Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of
______% of my base pay in accordance with the Plan.
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares in accordance with the Plan, and that shares will be
purchased for me automatically at the end of the offering period unless I
withdraw from the Plan by giving written notice to the Company.
4. I understand that prior to the delivery of any shares I will receive a copy
of the Company's most recent prospectus which describes the Plan. A copy
of the complete "Seagate Technology Employee Stock Purchase Plan" is on
file with the Company.
5. Shares purchased for me under the Plan should be issued in the name(s) of:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
6. I understand that if I dispose of any shares received by me pursuant to the
Plan within 2 years after the first day of the offering period during which
I purchased such shares or within 1 year after the date on which such
shares were delivered to me, I may be treated for federal income tax
purposes as having received ordinary income at the time of such disposition
in an amount equal to the excess of the fair market value of the shares at
the time such shares were delivered to me over the option price paid for
the shares. I hereby agree to notify the Company in writing within 30 days
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after the date of any such disposition. However, if I dispose of
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such shares at any time after the expiration of the 2-year and 1-year
holding periods, I understand that I will be treated for federal income tax
purposes as having received income only at the time of such disposition,
and that such income will be taxed as ordinary income only to the extent of
an amount equal to the lesser of (1) the excess of the fair market value of
the shares at the time of such disposition over the amount paid for the
shares under the option, or (2) the excess of the fair market value of the
shares over the option price,
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measured as if the option had been exercised on the first day of the
offering period during which I purchased such shares. The remainder of the
gain, if any, recognized on such disposition will be taxed at capital gains
rates.
7. I hereby agree to be bound by the terms of the Plan. The effectiveness of
this Subscription Agreement is dependent upon my eligibility to participate
in the Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Plan:
NAME: (Please print) _____________________________________________________
First Middle Last
________________________ _____________________________________________________
Relationship
_____________________________________________________
Address
NAME: (Please print) _____________________________________________________
First Middle Last
________________________ _____________________________________________________
Relationship
_____________________________________________________
Address
Date: __________________________ ____________________________________
Signature of Employee
________________________________________________________________________________
________________________________________________________________________________
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I do not wish to participate in the Employee Stock Purchase Plan.
Date: ________________________ _________________________________
Signature of Employee
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