8-KLeadership ChangesExhibits & Filings

WESTERN DIGITAL CORP 8-K Report, Executive Changes (Aug 1, 2007)

Filed August 1, 2007For Securities:WDC

Summary

Western Digital Corporation (WDC) filed an 8-K report on August 1, 2007, detailing the separation agreement with its Senior Vice President and Chief Financial Officer, Stephen D. Milligan. Mr. Milligan's employment is set to terminate no later than August 31, 2007. Until then, he will continue his duties and assist in the transition to his successor while receiving his current salary and benefits. The agreement outlines a comprehensive severance package for Mr. Milligan, contingent on his continued employment and cooperation through the transition. This package includes significant lump-sum payments, continued eligibility for a pro-rata bonus, accelerated vesting of stock options and restricted stock, extended health benefits coverage, and outplacement services. An additional substantial severance payment is provided if Mr. Milligan assists with the fiscal year 2007 10-K filing.

Key Highlights

  • 1Stephen D. Milligan, Senior Vice President and CFO, will depart Western Digital by August 31, 2007.
  • 2Mr. Milligan will receive a separation package totaling at least $900,000 in lump-sum payments, plus other benefits.
  • 3The severance package includes a pro-rata bonus for the six-month cycle ending December 28, 2007, assuming 100% performance targets are met.
  • 4Mr. Milligan's stock options and restricted stock will have accelerated vesting as if he remained employed through February 29, 2008.
  • 5The company will cover COBRA premium payments for 18 months and provide up to $15,000 in outplacement services.
  • 6An additional $500,000 severance payment is contingent on Mr. Milligan's cooperation with the fiscal year 2007 10-K filing and not being terminated for cause.
  • 7All payments are subject to Mr. Milligan executing a valid release of claims.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce and provide details regarding the separation agreement between Western Digital Corporation and its CFO, Stephen D. Milligan, including the terms of his departure and severance package.

Mr. Milligan is entitled to a minimum lump-sum payment of $900,000, a pro-rata bonus for the second half of the fiscal year, accelerated vesting of stock options and restricted stock, 18 months of COBRA premium coverage, and outplacement services. He could receive an additional $500,000 if he assists with the 10-K filing.

The benefits are contingent upon Mr. Milligan performing his duties until his separation date (no later than August 31, 2007), not being terminated for cause, and executing a valid release of claims against the company. An additional $500,000 payment requires his cooperation with the fiscal year 2007 10-K filing.

While the departure of a CFO is a significant event, the filing indicates a planned and orderly transition. The company has entered into a formal agreement outlining the terms, suggesting that the financial implications, though substantial in severance, are managed. Investors should monitor the search for and appointment of a successor CFO.