8-KLeadership Changes

WESTERN DIGITAL CORP 8-K Report, Executive Changes (Sep 19, 2011)

Filed September 19, 2011For Securities:WDC

Summary

This Form 8-K filing from Western Digital Corporation (WDC) on September 19, 2011, reports two key events. Firstly, the Compensation Committee of the Board of Directors approved new forms of award agreements under the 2004 Performance Incentive Plan for company officers. These new agreements modify the conditions for accelerated vesting of awards upon a change in control, requiring both a change in control event and either termination of the award or termination of the officer's employment without cause or for good reason within one year. This change aims to align executive compensation with specific circumstances following a potential acquisition or merger. Secondly, the report announces the upcoming retirement of Director Peter D. Behrendt. Mr. Behrendt, who is 72 years old and has been a director since 1994, will not seek re-election at the company's 2011 Annual Meeting of Stockholders, adhering to the company's retirement policy for directors. These disclosures provide insight into the company's executive compensation structure adjustments and governance changes.

Key Highlights

  • 1Western Digital Corporation (WDC) is modifying its executive compensation agreements for officers.
  • 2New award agreements under the 2004 Performance Incentive Plan will now require both a change in control event and a subsequent termination of employment (without cause or for good reason) for accelerated vesting.
  • 3This change in acceleration clauses for executive awards is effective as of September 14, 2011.
  • 4Director Peter D. Behrendt, aged 72, announced his intention to retire from the Board of Directors.
  • 5Mr. Behrendt will not seek re-election at the upcoming 2011 Annual Meeting of Stockholders.
  • 6Mr. Behrendt has served on the Board of Directors since 1994, indicating a long tenure.
  • 7The company is adhering to its retirement policy for directors with Mr. Behrendt's departure.

Frequently Asked Questions

The company is adjusting the criteria for accelerated vesting of awards upon a 'change in control' event. The new agreements aim to ensure that accelerated vesting occurs only when there is a change in control coupled with a subsequent adverse employment action for the officer (termination without cause or for good reason within a year), rather than simply upon the change in control itself. This is a common practice to better align executive interests with shareholder outcomes in M&A scenarios.

While the exact definition is not detailed in this 8-K, 'change in control event' typically refers to significant corporate transactions such as a merger, acquisition, or sale of substantially all of the company's assets. The new award agreements specify that accelerated vesting will only happen if such an event occurs AND the officer's employment is terminated under specific circumstances related to that event.

Peter D. Behrendt's retirement marks the departure of a long-serving director who has been on the board since 1994. His decision to retire at age 72 is in line with the company's retirement policy for directors, suggesting a planned transition in board composition and governance.

The new forms of award agreements were approved on September 14, 2011. Mr. Behrendt announced his intention to retire on September 15, 2011, and he will officially step down at the company's 2011 Annual Meeting of Stockholders.