EXHIBIT 10.7 KOMAG INCORPORATED BONUS PLAN

Exhibit 10.7

KOMAG INCORPORATED

BONUS PLAN

TABLE OF CONTENTS

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TABLE OF CONTENTS
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KOMAG, INC.
BONUS PLAN

SECTION 1
BACKGROUND, PURPOSE AND DURATION

      The Compensation Committee of the Board adopted the Plan effective as of January 24, 2006. The Plan is to be effective beginning with the Company’s 2006 fiscal year.

      The Plan is intended to align each non-management employee of the Company towards a single financial target which will result in a competitive cash bonus payment for each such employee as a reward for their contributions to the Company’s consolidated financial performance.

SECTION 2
DEFINITIONS

      The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context:

      means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company.

      means the actual award (if any) payable to a Participant as determined pursuant to Section 3.

      means base straight time gross earnings earned by the Participant for the Performance Period but exclusive of overtime, premium pay, stock compensation, relocation payments, or any other bonus or incentive awards or payments.

      means the Board of Directors of the Company.

      means the pool of funds available for distribution to Participants. Subject to the terms of the Plan, the Committee establishes the Bonus Pool for each Performance Period.

      means the committee appointed by the Board to administer the Plan. Until otherwise determined by the Board, the Compensation Committee of the Board shall constitute the Committee.

      means Komag Incorporated, a Delaware corporation, or any successor thereto.

      means the net sales of the Company during the Performance Period, less (A)(i) the cost of goods sold, (ii) research and development expenses, (iii) selling, general and administrative expenses. The Committee will determine annually any adjustments , plus (or minus), to Corporate Operating Income including, but not limited to, any gains (or losses) with respect to the disposal of assets, non-cash employee stock compensation expense, restructuring, impairment, and foreign currency adjustments.

      means a permanent and total disability determined in accordance with uniform and nondiscriminatory standards adopted by the Committee from time to time.

      means as to any Performance Period, an employee of the Company or any Affiliate who has been selected by the Committee for participation in the Plan for that Performance Period.

      means the percentage of actual Corporate Operating Income versus the target Corporate Operating Income for Performance Period as determined by the Committee.

      means the period of time for the measurement of the performance criteria that must be met to receive an Award, as determined by the Committee in its sole discretion. A Performance Period may be divided into one or more shorter periods if, for example, but not by way of limitation, the Committee desires to measure some performance criteria over twelve (12) months and other criteria over three (3) months. Multiple, overlapping Performance Periods (of different durations) may be in effect at any one time.

      means the Komag Incorporated Bonus Plan, as set forth in this instrument and as hereafter amended from time to time.

      means a percentage of a Participant’s Base Pay in addition to the Target Percentage as the Committee may determine.

      means the percentage of a Participant’s Base Pay for a Performance Period as determined by the Committee.

      means a cessation of the employee-employer relationship between a Participant and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate.

SECTION 3
DETERMINATION OF AWARDS

      The Committee, in its sole discretion, shall select the employees of the Company or its Affiliates who shall be Participants for any Performance Period. Participation in the Plan is in the sole discretion of the Committee, on a Performance Period by Performance Period basis. Accordingly, an employee who is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period or Periods. Unless and until the Committee provides otherwise, all regular non-exempt employees and exempt employees in grade E05 and below who are employed by the Company on date Awards are paid and are in good standing with the Company (i.e., not on a performance management plan) will be Participants for any Performance Period.

      (a) The Committee will determine the terms pursuant to which a Participant will receive an Award hereunder for any Performance Period.

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