Exhibit 10.6
SEAGATE TECHNOLOGY
EXECUTIVE OFFICER PERFORMANCE
BONUS PLAN
As Amended and Restated Effective
as of June 28, 2008
Seagate Technology, an exempted
company incorporated with limited liability under the laws of the
Cayman Islands (the “Company”), established the Seagate
Technology Executive Officer Performance Bonus Plan (the
“EPB”), as amended and restated effective as of
June 28, 2008, subject to approval of the EPB by the
shareholders of the Company. The EPB in the form immediately prior
to this amendment and restatement was entitled the Seagate
Technology Annual Incentive Bonus Plan (“AIBP”). The
objectives of the EPB are to motivate and reward the
Company’s executive officers to produce results that increase
shareholder value and to encourage individual and team behavior
that helps the Company achieve both short and long-term corporate
objectives.
ARTICLE I.
DEFINITIONS
Section 1.1—“Base
Compensation,” with respect to a fiscal year, shall mean the
Participant’s rate of annual base salary as in effect as of
the last day of such fiscal year, prorated for a partial year if
the Participant was not employed for the full year, and shall
exclude moving expenses, bonus pay and other payments which are not
considered part of annual base salary.
Section 1.2—“Board” shall
mean the Board of Directors of the Company.
Section 1.3—“Code” shall
mean the Internal Revenue Code of 1986, as amended. Any reference
to a section of the Code herein shall be deemed to include a
reference to the regulations promulgated under such section and to
any successor provision of such section.
Section 1.4—“Committee”
shall mean the Compensation Committee of the Board described in
Section 6.1.
Section 1.5—“Disability”
shall mean the physical or mental incapacitation such that for a
period of six consecutive months or for an aggregate of nine months
in any 24-month consecutive period, a Participant is unable to
substantially perform his or her duties. Any question as to the
existence of that Participant’s physical or mental
incapacitation as to which the Participant or the
Participant’s representative and the Company cannot agree
shall be determined in writing by a qualified independent physician
mutually acceptable to the Participant and the Company. If the
Participant and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and
those two physicians shall select a third who shall make such
determination in writing. The determination of
“Disability” made in writing to the Company and the
Participant shall be final and conclusive for all purposes of the
bonus awards.
Section 1.6—“Executive
Officer” shall mean an employee who is subject to the
requirements of Section 16(a) of the Securities Exchange Act
of 1934, as amended.
Section 1.7—“Participant”
shall mean, with respect to any fiscal year during the term of the
EPB, an Executive Officer selected by the Committee to participate
in the EPB in accordance with Section 2.3 hereof.
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ARTICLE II.
BONUS AWARDS
Section 2.1—
Performance Targets . A Participant shall be eligible to
earn a bonus award under the EPB based on the achievement of one or
more performance targets by the Company, as determined by the
Committee for each fiscal year of the Company. The performance
targets for a fiscal year shall be based on any one or more of the
following objective business criteria, either individually,
alternatively or in any combination, applied to either the Company
as a whole or to a business unit or subsidiary, and measured either
annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to previous
years’ results or to a designated comparison group, in each
case as the Committee determines: (a) pre-and after-tax
income; (b) operating income; (c) net operating income
(before or after taxes); (d) net earnings; (e) net income
(before or after taxes); (f) operating margin; (g) gross
margin; (h) cash flow (before or after dividends);
(i) earnings per share; (j) return on equity;
(k) return on assets, investments or capital employed;
(l) revenue; (m) market share; (n) cost reductions
or savings; (o) funds from operations; (p) total
shareholder return; (q) stock price; (r) earnings before
any one or more of the following items: interest, taxes,
depreciation or amortization; (s) market capitalization;
(t) economic value added; (u) operating ratio;
(v) product development or release schedules; (w) new
product innovation; (x) implementation of the Company’s
critical processes or projects; (y) customer service or
customer satisfaction; (z) product quality measures; (aa) days
sales outstanding; (bb) inventory or inventory turns; (cc) other
standards of financial performance and/or (dd) personal performance
evaluations.
Section 2.2—
Adjustments. To the extent consistent with
Section 162(m) of the Code, the Committee (a) shall
appropriately adjust any evaluation of performance under a
performance target to mitigate the effects of material, unusual or
nonrecurring gains and losses, accounting charges or other
extraordinary events which were not budgeted and were not foreseen
at the time the applicable performance targets were set, such as
merger or acquisition related charges, charges for restructuring
and reorganization plans, discontinued operations, extraordinary
items and all items of gain, loss or expense determined to be
extraordinary or unusual in nature or related to the disposal of a
segment of a business or significant part of a business, or related
to a change in accounting principle (including the cumulative
effect of accounting changes) as determined in accordance with
Statement of Financial Standards No. 154, Accounting
Changes and Error Corrections or other applicable or successor
accounting provisions, in each case as determined in accordance
with generally accepted accounting principles or identified in the
Company’s financial statements or notes to the financial
statements, and (b) shall also appropriately adjust any
evaluation of performance under a performance target to exclude any
of the following events that occurs during a performance period:
(i) asset write-downs, (ii) litigation, claims, judgments
or settlements, (iii) the effect of changes in tax law or
other such laws or provisions affecting reported results,
(iv) accruals for reorganization and restructuring programs
and (v) accruals of any amounts for payment under the
EPB.
Section 2.3— Bonus
Awards . Each individual who is an Executive Officer
(a) who remains continuously employed as an Executive Officer
from the first day of the applicable fiscal year (or, if later,
from his or her first day of employment) through and including the
last day of the applicable fiscal year and (b) who is selected
by the Committee to participate in the EPB with respect to such
fiscal year, shall be eligible for a bonus award with respect to
such f
