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Deferred Compensation Plan for Non-Employee Directors
For each calendar year, we permit each non-employee director to defer payment of a maximum of 80% of
any cash compensation to be paid to the director during that calendar year in accordance with our Deferred
Compensation Plan. We also permit non-employee directors to defer payment of any RSUs awarded under our
Non-Employee Director Restricted Stock Unit Grant Program beyond the vesting date of the award. Restricted
stock units and other amounts deferred in cash by a director are generally credited and payable in the same
manner as amounts deferred by our executive officers and other participants in our Deferred Compensation Plan
as further described below under "Fiscal 2013 Non-Qualified Deferred Compensation Table" beginning on
page 57.
Hitachi Designated Director Compensation Program
On August 14, 2013, we entered into an agreement with Hitachi by which we agreed to make certain
payments to Hitachi in lieu of our prior undertaking in the Investor Rights Agreement to compensate the Hitachi
Designated Directors on the same basis that we compensate other non-employee directors. For each of the
Hitachi Designated Directors, Hitachi received an initial payment of $260,959, which is reported in the "Director
Compensation Table for Fiscal 2013" above. For each year of service commencing with our 2013 Annual
Meeting of Stockholders, Hitachi will be entitled to a cash payment with respect to each continuing Hitachi
Designated Director equal to the base annual retainer otherwise payable to one of our other non-employee
directors pursuant to our non-employee director compensation policy then in effect (which is summarized
above). Hitachi also will be entitled to an additional cash payment(s) determined by reference to the grants of
RSUs the Hitachi Designated Directors would have been granted had such Hitachi Designated Directors
participated in our Non-Employee Director Restricted Stock Unit Grant Program under our 2004 Performance
Incentive Plan. Such cash payment(s) will be payable to Hitachi within ten (10) days after the date on which such
hypothetical RSUs would have vested had such units actually been granted to the Hitachi Designated Directors
under the terms of the program, and will be calculated based on the number of units that would have vested
multiplied by the closing price of a share of our common stock on the vesting date. Hitachi will not be entitled to
any cash payment with respect to any hypothetical RSUs for which the applicable vesting conditions would not
have been satisfied by the applicable Hitachi Designated Director. As indicated above, the Hitachi Designated
Directors are not entitled to any compensation from us for their service on our Board of Directors but are entitled
to the same travel and expense reimbursement as our other non-employee directors.
COMPENSATION DISCUSSION AND ANALYSIS
When we refer to our "executives" or "executive officers" in this section, we mean:
Stephen D. Milligan, our President and, following the retirement of Mr. Coyne on January 2, 2013, our
President and Chief Executive Officer;
John F. Coyne, our former Chief Executive Officer, who retired from the company on January 2, 2013;
Wolfgang U. Nickl, our Executive Vice President and Chief Financial Officer;
Timothy M. Leyden, President of our WD Subsidiary;
Michael D. Cordano, President of our HGST Subsidiary; and
James J. Murphy, our Executive Vice President, Storage Products and Worldwide Sales (WD Subsidiary).
Effective August 7, 2012, in connection with a review of policy-making functions and an organizational
restructuring, Mr. Murphy ceased serving as an executive officer of the company (although he remained
employed by the company in the same position as before the review). As a non-executive officer, Mr. Murphy's
base salary and short-term bonus payouts for fiscal 2013 were determined by Mr. Leyden, to whom Mr. Murphy
reports. Under Securities and Exchange Commission rules, however, Mr. Murphy, as well as the other
individuals listed above, are considered our "named executive officers" for fiscal 2013 and are listed in the
"Fiscal Years 2011 -- 2013 Summary Compensation Table" below.
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