8-KLeadership Changes

WESTERN DIGITAL CORP 8-K Report, Executive Changes (Jun 29, 2016)

Filed June 29, 2016For Securities:WDC

Summary

This Form 8-K filing from Western Digital Corporation (WDC), dated June 29, 2016, primarily reports on the departure of James J. Murphy, Executive Vice President. Mr. Murphy's departure is effective March 25, 2017, though he will continue in a special advisory role until then. The terms of his separation are detailed in a Separation and General Release Agreement, which outlines the compensation and benefits he will receive. Investors should note the financial implications of this executive departure, including the severance package provided to Mr. Murphy. This package includes a significant cash payment equivalent to 24 months of base salary, a prorated bonus, and continued COBRA premium coverage for 18 months. Additionally, his unvested stock options and restricted stock units will receive accelerated vesting, and performance stock units will vest at target. This event signals a change in executive leadership and should be monitored for any potential impact on the company's operations and strategic direction.

Key Highlights

  • 1James J. Murphy, Executive Vice President, will depart Western Digital Corporation effective March 25, 2017.
  • 2Mr. Murphy will serve in a special advisory role until his departure.
  • 3A Separation and General Release Agreement has been executed with Mr. Murphy.
  • 4Mr. Murphy is entitled to a lump sum payment of $1,250,000 (24 months' base salary).
  • 5He will receive a prorated target bonus payment for the six-month bonus cycle ending June 30, 2017.
  • 6Company-paid COBRA premiums for 18 months and accelerated vesting of outstanding unvested stock options and RSUs are part of the agreement.
  • 7Performance stock units granted on August 4, 2015, will vest at the target number of units.

Frequently Asked Questions

Mr. Murphy is set to receive a lump sum payment of $1,250,000, representing 24 months of his base salary, plus a prorated target bonus payment of $160,543 (assuming 100% performance targets met for the period), and $28,643 for 18 months of COBRA premiums. The total cash component is approximately $1,439,186, before taxes and deductions.

Yes, Mr. Murphy's outstanding unvested stock options and restricted stock units will vest as if he remained employed through the six-month anniversary of his Separation Date. Additionally, his unvested performance stock units granted on August 4, 2015, will vest at the target number of units.

Mr. Murphy's departure is scheduled for March 25, 2017. However, he will continue with the company in a special advisory role until that date, providing a transition period.

As part of the Separation and General Release Agreement, Mr. Murphy has agreed to comply with certain non-solicitation and cooperation provisions, and has provided a customary general release of claims against the Company. He also agreed to a mutual non-disparagement covenant.