The following Questions and Answers address the Company’s responses to many of the criteria interested shareholders consider when evaluating a Company's governance practices.
Q. Does the Company’s Board have a majority of independent outsiders?
A. Yes, the Board is composed of 7 independent outsiders and 1 current member of management.
Q. Does the Board have a Compensation Committee composed of independent directors?
A. Yes, the Compensation Committee is composed of 3 independent directors.
Q. Does the Board have an Audit Committee composed of independent directors?
A. Yes, the Audit Committee is composed of 3 independent directors.
Q. Does the Board have a Governance Committee composed of independent directors?
A. Yes, the Governance Committee, which among other things performs functions similar to a nominating committee, is composed of 3 independent directors.
Q. How often do members of the Board of Directors stand for election?
A. The full Board of Directors is elected annually.
Q. How large is the Board of Directors?
A. There are currently 9 directors serving on the Board.
Q. Does the Company have corporate governance guidelines and, if so, has the Company publicly disclosed them?
A. Yes, the Company has adopted corporate governance guidelines which are available on the Company’s website in its corporate governance section.
Q. Does the Company have a lead director?
A. Yes, the Company currently has a lead independent director. Our corporate governance guidelines provide that our Board of Directors will appoint a lead independent director if the Chairman is not an independent director or as the Board deems appropriate. Although the Board has determined that our Chairman is independent under the NASDAQ Stock Market listing standards, because he is a former Chairman, President and Chief Executive Officer of our Company, the Board determined it appropriate to appoint a lead independent director.
Q. How are vacancies on the Board of Directors filled?
A. Vacancies are filled by a vote of the remaining directors.
Q. Can shareholders communicate directly with the Board of Directors?
A. Yes, shareholders can communicate directly with the Board by writing to the Company’s Secretary at the address listed below. The name of any specific intended Board recipient should be noted in the communication, including whether the communication is intended only for the Company’s lead director or non-management directors. The Secretary will forward the communication only to the intended recipient unless he determines that it is of a commercial or frivolous nature or otherwise inappropriate for the intended Board recipient’s consideration.
Michael Ray, Secretary Western Digital Corporation 3355 Michelson Drive, Suite 100 Irvine, California 92612
Q. Does the Company consider director candidates suggested by shareholders?
A. Yes, a shareholder may recommend a candidate to the Governance Committee by following the procedures described in the Company’s proxy statement on file with the Securities and Exchange Commission.
Charter and Bylaws
Q. Can shareholders amend the Company’s bylaws?
A. Yes, a simple majority vote of the Company’s shareholders is sufficient to amend the Company’s bylaws. The Board may also amend the bylaws without shareholder approval.
State of Incorporation
Q. Where is the Company incorporated?
A. The Company is incorporated in Delaware.
Q. Have stock options been repriced during the past three years without shareholder approval?
A. No, the Company has not repriced its stock options during the past three years.
Q. Are there any interlocks between members of the Compensation Committee?
A. No, there are no interlocks.
Q. Do directors receive all or a portion of their compensation in the form of equity?
A. Yes, they do.
Q. Do non-employee directors participate in the Company’s pension plan?
A. No, they do not.
Q. Does the Company have a mandatory retirement age for directors?
A. Yes, the mandatory retirement age for directors is 72, unless it is determined in a particular instance that longer tenure is in the best interests of the Board or the Company.
Q. Does the Board review its performance regularly?
A. Yes. At least annually, the Board asks its members to complete a Self-Appraisal Questionnaire developed by the Governance Committee and approved by the Board and facilitated by a third party. In addition, each of the Board’s committees conducts an annual self-evaluation.
Q. Do outside directors meet without the Chief Executive Officer present?
A. Yes, non-management directors meet at least twice a year without any executive officers or management directors present. In addition, any non-management director may call for an executive session of the non-management directors of the Board to coincide with any regularly scheduled Board meeting.
Q. Does the Board regularly approve a CEO succession plan?
A. The Governance Committee, on the Board’s behalf, adopts a succession plan for the position of Chief Executive Officer. The Chief Executive Officer meets at least annually with the Governance Committee to assist the Committee, and the succession plan is reviewed at least annually by the Board.
Q. Has the Company adopted a code of ethics which satisfies Section 406 of the Sarbanes-Oxley Act and the New York Stock Exchange listing requirements?
A. Yes, the Company has adopted a code of business ethics, which is available on the Company’s website in its corporate governance section.