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Western Digital Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2003


[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-8703

WESTERN DIGITAL CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		33-0956711
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

20511 Lake Forest Drive
Lake Forest, California		92630
(Address of principal executive offices)		(Zip Code)

(949) 672-7000
(Registrant’s telephone number, including area code)

http://www.westerndigital.com
(Registrant’s Web Site)

N/A

(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ ]

As of the close of business on April 25, 2003, 198,095,885 shares of common stock, par value $.01 per share, were outstanding.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. FINANCIAL STATEMENTS
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	Item 4. CONTROLS AND PROCEDURES
PART II. OTHER INFORMATION
	Item 1. LEGAL PROCEEDINGS
	Item 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
EXHIBIT INDEX
EXHIBIT 10.10
EXHIBIT 10.11
EXHIBIT 10.57
EXHIBIT 10.58
EXHIBIT 99.1
EXHIBIT 99.2

WESTERN DIGITAL CORPORATION
INDEX


			PAGE NO.

PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		Condensed Consolidated Statements of Income – Three Months and Nine Months Ended March 28, 2003 and March 29, 2002		3
		Condensed Consolidated Balance Sheets - March 28, 2003 and June 28, 2002		4
		Condensed Consolidated Statements of Cash Flows – Nine Months Ended March 28, 2003 and March 29, 2002		5
		Notes to Condensed Consolidated Financial Statements		6
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			11
	Item 3. Quantitative and Qualitative Disclosures About Market Risk			21
	Item 4. Controls and Procedures			22
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings			23
	Item 6. Exhibits and Reports on Form 8-K			23
	Signatures			24
	Certifications			25

Western Digital Corporation (the “Company” or “Western Digital”) has a 52 or 53-week fiscal year and each fiscal month ends on the Friday nearest to the last day of the calendar month. Unless otherwise indicated, references herein to specific years and quarters are to the Company’s fiscal years and fiscal quarters, and references to financial information are on a consolidated basis.

The information in the Company’s website referenced herein is not incorporated by reference in this Quarterly Report on Form 10-Q.

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts; unaudited)


			THREE MONTHS ENDED						NINE MONTHS ENDED

			MAR. 28,			MAR. 29,			MAR. 28,			MAR. 29,
			2003			2002			2003			2002

Revenue, net			$	705,839		$	594,867		$	2,038,238		$	1,610,480
Cost of revenue				583,819			513,849			1,688,494			1,402,897

	Gross margin			122,020			81,018			349,744			207,583

Operating expenses:
	Research and development			34,726			31,443			101,050			89,500
	Selling, general and administrative			30,205			28,774			90,277			84,636

		Total operating expenses		64,931			60,217			191,327			174,136

Operating income				57,089			20,801			158,417			33,447
Net interest and other (expense) income				(316	)		(334	)		(2,365	)		1,908

Income from continuing operations before income taxes				56,773			20,467			156,052			35,355
Income tax (expense) benefit				(2,271	)		1,624			(6,295	)		1,624

Income from continuing operations				54,502			22,091			149,757			36,979
Discontinued operations				—			(2,893	)		1,320			15,331

Net income			$	54,502		$	19,198		$	151,077		$	52,310

Basic income (loss) per common share:
	Income from continuing operations		$	.28		$	.12		$	.77		$	.20
	Discontinued operations			—			(.02	)		.01			.08

			$	.28		$	.10		$	.78		$	.28

Diluted income (loss) per common share:
	Income from continuing operations		$	.26		$	.11		$	.74		$	.19
	Discontinued operations			—			(.01	)		.00			.08

			$	.26		$	.10		$	.74		$	.27

Weighted average shares outstanding:
	Basic			196,258			190,091			194,149			188,139

	Diluted			207,724			198,355			202,890			192,372

The accompanying notes are an integral part of these condensed consolidated financial statements.

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par values; unaudited)


			MAR. 28,			JUN. 28,
			2003			2002

ASSETS
Current assets:
	Cash and cash equivalents		$	347,060		$	223,728
	Accounts receivable, net			195,738			218,832
	Inventories			110,663			73,395
	Other			13,374			11,554

		Total current assets		666,835			527,509
Property and equipment, net				117,162			107,520
Other, net				543			1,651

		Total assets	$	784,540		$	636,680

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	348,332		$	302,998
	Accrued expenses			132,108			103,474
	Convertible debentures			—			86,204

		Total current liabilities		480,440			492,676
Other				28,016			41,142
Commitments and contingencies
Shareholders’ equity:
	Preferred stock, $.01 par value; shares authorized: 5,000; shares outstanding: none			—			—
	Common stock, $.01 par value; shares authorized: 450,000; shares outstanding: 198,316 and 195,438, respectively			1,983			1,954
	Additional paid-in capital			651,514			710,945
	Accumulated deficit			(365,215	)		(516,292	)
	Accumulated other comprehensive income			3,248			2,559
	Treasury stock, at cost: 696 and 3,295 shares, respectively			(15,446	)		(96,304	)

		Total shareholders’ equity		276,084			102,862

		Total liabilities and shareholders’ equity	$	784,540		$	636,680

The accompanying notes are an integral part of these condensed consolidated financial statements.

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands; unaudited)


				NINE MONTHS ENDED

				MAR. 28,			MAR. 29,
				2003			2002

Cash flows from operating activities:
	Net income			$	151,077		$	52,310
	Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
		Discontinued operations			(1,320	)		(15,331	)
		Depreciation and amortization			36,298			34,324
		Non-cash interest expense			2,991			4,533
		Other non-cash items, net			—			(2,391	)
		Changes in:
			Accounts receivable		23,094			(57,870	)
			Inventories		(37,268	)		(15,608	)
			Other assets		(1,579	)		(3,075	)
			Accounts payable		45,334			92,728
			Accrued expenses		15,921			(16,674	)
			Other		1,988			(781	)

			Net cash provided by continuing operations		236,536			72,165

Cash flows from investing activities:
	Capital expenditures, net				(43,572	)		(39,484	)
	Other investment activity				—			9,912

			Net cash used for investing activities of continuing operations		(43,572	)		(29,572	)

Cash flows from financing activities:
	Issuance of common stock under employee plans				20,966			8,810
	Debenture redemptions and extinguishments				(88,045	)		(13,217	)
	Proceeds from minority investment in subsidiary				—			450

			Net cash used for financing activities of continuing operations		(67,079	)		(3,957	)

Net cash (used for) provided by discontinued operations					(2,553	)		20,269

Net increase in cash and cash equivalents					123,332			58,905
Cash and cash equivalents, beginning of period					223,728			167,582

Cash and cash equivalents, end of period				$	347,060		$	226,487

Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes				$	2,646		$	1,843
Supplemental disclosures of non-cash investing and financing activities:
Common stock issued for extinguishment of convertible debentures				$	234		$	13,585

The accompanying notes are an integral part of these condensed consolidated financial statements.

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.		Basis of Presentation

		The accounting policies followed by the Company are set forth in Note 1 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K as of and for the year ended June 28, 2002. In the opinion of management, all adjustments necessary to fairly state the unaudited condensed consolidated financial statements have been made. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended June 28, 2002. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

		Certain prior period amounts have been reclassified to conform to the current period presentation as a result of the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections” (“SFAS 145”) and the termination of certain of the Company’s new business ventures.

2.		Supplemental Financial Statement Data (in thousands)


	MAR. 28,		JUN. 28,
	2003		2002

Inventories:
Finished goods	$	80,658	$	54,483
Work in process		17,088		9,523
Production materials		12,917		9,389

	$	110,663	$	73,395


	THREE MONTHS						NINE MONTHS
	ENDED						ENDED

	MAR. 28,			MAR. 29,			MAR. 28,			MAR. 29,
	2003			2002			2003			2002

Net Interest and Other (Expense) Income:
Interest income	$	1,070		$	875		$	2,787		$	3,163
Interest and other expense		(1,386	)		(2,019	)		(5,152	)		(6,271	)
Gains on investments, net		—			810			—			4,289
Minority interest in losses of consolidated subsidiary		—			—			—			727

	$	(316	)	$	(334	)	$	(2,365	)	$	1,908

The Company records a provision for estimated warranty costs as products are sold to cover the cost of repair or replacement of the hard drive during the warranty period. This provision is based on estimated future returns within the warranty period and costs to repair, using historical field return rates by product type and current average repair costs. Changes in the warranty provision for the nine months ended March 28, 2003 were as follows (in thousands):


Balance at June 28, 2002		$	47,412
	Costs incurred		(41,901	)
	Current period accruals		45,535

Balance at March 28, 2003		$	51,046

3.		Income per Share

		The following table illustrates the computation of basic and diluted income per common share from continuing operations (in thousands, except per share data):


		THREE MONTHS				NINE MONTHS
		ENDED				ENDED

		MAR. 28,		MAR. 29,		MAR. 28,		MAR. 29,
		2003		2002		2003		2002

Income from continuing operations		$	54,502	$	22,091	$	149,757	$	36,979

Weighted average shares outstanding:
	Basic		196,258		190,091		194,149		188,139
	Employee stock options and other		11,466		8,264		8,741		4,233

	Diluted		207,724		198,355		202,890		192,372

Income per share from continuing operations:
	Basic	$	.28	$	.12	$	.77	$	.20

	Diluted	$	.26	$	.11	$	.74	$	.19

		For purposes of computing diluted income per share, antidilutive common share equivalents have been excluded from the calculation. These include employee stock options with an exercise price which exceeded the average fair market value of the common stock for the period and common shares issuable upon conversion of the 5.25% zero coupon convertible subordinated debentures due February 18, 2018 (the “Debentures”). These antidilutive common share equivalents totaled 20.1 million and 24.4 million shares for the three months ended March 28, 2003 and March 29, 2002, respectively, and 24.1 million and 28.7 million shares for the nine months ended March 28, 2003 and March 29, 2002, respectively.

4.		Common Stock and Convertible Debenture Transactions

		During the nine months ended March 28, 2003, the Company issued approximately 2,064,000 shares of its common stock in connection with Employee Stock Purchase Plan (“ESPP”) purchases and approximately 3,528,000 shares of its common stock in connection with common stock option exercises, for aggregate cash proceeds of $21.0 million. During the nine months ended March 29, 2002, the Company issued approximately 1,343,000 shares of its common stock in connection with ESPP purchases and approximately 1,204,000 shares of its common stock in connection with common stock option exercises, for aggregate cash proceeds of $8.8 million.

		During the nine months ended March 28, 2003, the Company issued approximately 50,000 shares of common stock and paid $88.0 million in cash to redeem its remaining Debentures. The book value of Debentures redeemed was $88.4 million, and the aggregate principal amount at maturity was $192.9 million. The net gain from redemptions of the Debentures was not material.

5.		Comprehensive Income

		Comprehensive income includes net income as well as the components of other comprehensive income which include all revenue, expense, gain and loss items that are recorded as an element of shareholders’ equity but are excluded from net income. The Company’s other comprehensive income is comprised of unrealized gains on marketable securities categorized as “available for sale” under SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities”. The components of comprehensive income for the three and nine months ended March 28, 2003 and March 29, 2002 were as follows (in thousands):


		THREE MONTHS				NINE MONTHS
		ENDED				ENDED

		MAR. 28,		MAR. 29,		MAR. 28,		MAR. 29,
		2003		2002		2003		2002

Net income		$	54,502	$	19,198	$	151,077	$	52,310
Other comprehensive income:
	Unrealized gain on available for sale investments, net		1,398		1,916		689		982

Comprehensive income		$	55,900	$	21,114	$	151,766	$	53,292

Stock Based Compensation

The Company applies Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations (“APB Opinion No. 25”) in accounting for its stock options (including shares issued under the Stock Option Plans and the ESPP, collectively called “Options”) and, accordingly, no compensation expense has been recognized for the Options in the consolidated financial statements. Pro forma information for interim financial statements regarding net income and income per share is required by SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of FASB Statement No. 123” (“SFAS 148”). This information is required to be determined as if the Company had accounted for its Options granted subsequent to July 1, 1995, under the fair value method of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”).

The fair value of Options granted during the nine months ended March 28, 2003 and March 29, 2002 has been estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions:


	STOCK OPTION
	PLANS						ESPP PLAN

	2003			2002			2003			2002

Option life (in years)		3.7			3.0			1.25			2.0
Risk-free interest rate		3.40	%		3.37	%		1.94	%		2.90	%
Stock price volatility		0.88			0.88			0.88			0.88
Dividend yield		—			—			—			—
Fair value	$	2.66		$	1.94		$	2.62		$	2.90

The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model also requires the input of highly subjective assumptions including the expected stock price volatility and expected period until options are exercised. The pro forma impact of applying SFAS 123 in the three and nine months ended March 28, 2003 is not necessarily representative of future periods.

Had the Company determined compensation expense based on the Black-Scholes fair value model at the grant date for its Options under SFAS 123, the Company’s net income and net income per share would have been as indicated below (amounts in thousands except per share data):


			THREE MONTHS						NINE MONTHS
			ENDED						ENDED

			MAR. 28,			MAR. 29,			MAR. 28,			MAR. 29,
			2003			2002			2003			2002

Net income
	As reported		$	54,502		$	19,198		$	151,077		$	52,310
	Stock-based employee compensation expense			(6,378	)		(5,461	)		(19,196	)		(17,657	)

		Pro forma net income	$	48,124		$	13,737		$	131,881		$	34,653

Basic income per share:
	As reported		$	.28		$	.10		$	.78		$	.28

	Pro forma		$	.25		$	.07		$	.68		$	.18

Diluted income per share:
	As reported		$	.26		$	.10		$	.74		$	.27

	Pro forma		$	.24		$	.07		$	.66		$	.18

7.		Business Segment and Discontinued Operations

		The Company operates in one segment, the hard drive business.

		During 2002, the Company terminated the operations of all new business ventures, including Connex, Inc. (“Connex”), SANavigator, Inc. (“SANavigator”), Keen Personal Media, Inc. (“Keen”) and other smaller businesses. In conjunction with these business terminations, substantially all of the operating assets of Connex were sold to Quantum Corporation in August 2001 for cash proceeds of $11.0 million, and substantially all of the operating assets of SANavigator were sold to McData Corporation in September 2001 for cash proceeds of $29.8 million. These transactions generated a one-time gain of $24.5 million, net of costs incurred from the measurement date of July 1, 2001 through the end of the period to shutdown the businesses. Accordingly, the operating results of Connex, SANavigator and Keen, and the net gain recognized on the sale of substantially all of the assets of Connex and SANavigator for the periods reported, have been segregated from continuing operations and reported separately on the unaudited condensed consolidated statements of income as discontinued operations.

8.		Legal Proceedings

		In June 1994, Papst Licensing (“Papst”) brought suit against the Company in the United States District Court for the Central District of California, alleging infringement by the Company of five disk drive motor patents owned by Papst. In December 1994, Papst dismissed its case without prejudice. In July 2002, Papst filed a new complaint against the Company and several other defendants. The suit alleges infringement by the Company of seventeen of Papst’s patents related to disk drive motors that the Company purchased from motor vendors. Papst is seeking an injunction and damages. The Company filed an answer on September 4, 2002, denying Papst’s complaint. On December 11, 2002, the lawsuit was transferred to the United States District Court for the Eastern District of Louisiana and included in the consolidated pre-trial proceedings occurring there. The lawsuit was stayed pending the outcome of certain other related litigation. A potential loss, if any, cannot presently be reasonably estimated. The Company intends to vigorously defend the suit.

		On July 5, 2001, the Company’s Western Digital Technologies, Inc. subsidiary (“WDT”) and its Malaysian subsidiary (“WDM”) filed suit (the “complaint”) against Cirrus Logic, Inc. (“Cirrus”) for breach of contract and other claims resulting from Cirrus’ role as a strategic supplier of read channel chips for the Company’s hard disk drives. WDM also stopped making payments to Cirrus for past deliveries of chips and terminated all outstanding purchase orders from Cirrus for such chips. The complaint alleges that Cirrus’ unlawful conduct caused damages in excess of any amounts that may be owing on outstanding invoices or arising out of any alleged breach of the outstanding purchase orders. On August 20, 2001, Cirrus filed an answer and cross-complaint denying the allegations contained in the complaint and asserting counterclaims against the plaintiffs for, among other things, the amount of the outstanding invoices and the plaintiffs’ alleged breach of the outstanding purchase orders. The disputed payable, which is included in the Company’s balance sheet in accounts payable, is approximately $27 million. Cirrus claims that the canceled purchase orders, which are not reflected in the Company’s financial statements, total approximately $26 million. On November 2, 2001, Cirrus filed Applications for Right to Attach Orders and for Writs of Attachment against WDT and WDM in the amount of $25.2 million as security for the approximately $27 million allegedly owed for read-channel chips purchased from Cirrus that is disputed by WDT and WDM. On December 20, 2001, the Court granted Cirrus’ Applications. Pursuant to agreement with Cirrus, the Company has posted a letter of credit in the amount of $25.2 million in satisfaction of the Writs of Attachment.

		On November 26, 2002, WDT and WDM filed a motion for summary adjudication as to Cirrus’ second and third causes of action. The parties fully briefed the motion which was scheduled to be heard on December 24, 2002. On December 24, 2002, the Court continued the summary judgment motion until February 4, 2003, and then, on February 4, 2003, further continued the motion until April 1, 2003, to allow Cirrus to conduct additional discovery. On December 3, 2002, Cirrus filed a motion for summary adjudication as to WDT and WDM’s first, second, third, fourth, fifth and seventh causes of action. The parties fully briefed the motion which was scheduled to be heard on December 31, 2002. On December 31, 2002, after hearing arguments from both sides, the Court granted Cirrus’ motion as to the first, second, fourth, fifth and seventh causes of action, and denied Cirrus’ motion as to the third cause of action. On January 30, 2003, Cirrus filed another motion for summary adjudication as to the third cause of action. The parties completed briefing on the motion and the motion was scheduled to be heard on April 15, 2003.

		On March 4, 2003, WDT filed a motion for leave to amend its second amended complaint, seeking to add causes of action for intentional and fraudulent misrepresentation and negligent misrepresentation. The Court granted WDT’s motion on March 25, 2003. On March 18, 2003, WDT filed a motion to continue the trial date from May 19, 2003. On April 8, 2003, the Court granted Western Digital’s motion and moved the trial date to December 1, 2003. As a result of its ruling to continue the trial date, the Court continued the mandatory settlement conference originally scheduled for April 25, 2003, and continued indefinitely the hearings on WDT’s motion for summary judgment and Cirrus’ motion for summary judgment originally scheduled for April 1, 2003 and April 15, 2003 respectively. Discovery in this matter, originally scheduled to conclude by April 18, 2003, will continue into September 2003.

		On April 22, 2003, Cirrus filed a demurrer to WDT’s claims for promissory estoppel, intentional and fraudulent misrepresentation and negligent misrepresentation. The Court has scheduled a hearing on the demurrer for May 13, 2003. A potential loss, if any, cannot presently be reasonably estimated. The Company intends to prosecute this matter and defend the cross-complaint vigorously.

		In the normal course of business, the Company is subject to other legal proceedings, lawsuits and other claims. Although the ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, beyond that provided at March 28, 2003, would not be material to the Company’s financial condition. However, there can be no assurance with respect to such result and results could differ materially from those projected.

9.		New Accounting Pronouncements

		In November 2002, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 45 “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. FIN 45 also clarifies that a guarantor is required to recognize a liability for the fair value, or market value, of the obligation undertaken in issuing a guarantee at the inception of the guarantee. The provisions of FIN 45 relating to liability recognition does not apply to certain obligations such as product warranties and guarantees accounted for as derivatives. The initial recognition and measurement provisions apply on a prospective basis to guarantees issued or modified subsequent to December 31, 2002. The disclosure requirements of FIN 45 are effective for interim or annual financial statement periods ending after December 15, 2002. The Company adopted the provisions of FIN 45 relating to footnote disclosure of warranty obligations during the quarter ended December 27, 2002. This information is included in Note 2 “Supplemental Financial Statement Data” of the Notes to Condensed Consolidated Financial Statements. The Company’s adoption of the recognition and measurement provisions of FIN 45 had no impact on its consolidated financial position or results of operations.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This information should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Western Digital Corporation’s (the “Company’s” or “Western Digital’s”) Annual Report on Form 10-K as of and for the year ended June 28, 2002.

Unless otherwise indicated, references herein to specific years and quarters are to the Company’s fiscal years and fiscal quarters.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws. The statements that are not purely historical should be considered forward-looking statements. Often they can be identified by the use of forward-looking words, such as “may,” “will,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecasts,” and the like. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Readers are urged to carefully review the disclosures made by the Company concerning risks and other factors that may affect the Company’s business and operating results, including those made in this report under the caption “Risk Factors That May Affect Future Results” as well as the Company’s other reports filed with the Securities and Exchange Commission (the “SEC”). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Results of Operations

Summary Comparison

The following table sets forth, for the periods indicated, summary information from the Company’s statements of income. This table excludes the results of discontinued operations (dollars in thousands):


	THREE MONTHS ENDED								NINE MONTHS ENDED

	MAR. 28, 2003				MAR. 29, 2002				MAR. 28, 2003				MAR. 29, 2002

	$		%		$		%		$		%		$		%

Revenue, net		705,839		100.0		594,867		100.0		2,038,238		100.0		1,610,480		100.0
Gross margin		122,020		17.3		81,018		13.6		349,744		17.2		207,583		12.9
Total operating expenses		64,931		9.2		60,217		10.1		191,327		9.4		174,136		10.8
Operating income		57,089		8.1		20,801		3.5		158,417		7.8		33,447		2.1
Income from continuing operations		54,502		7.7		22,091		3.7		149,757		7.3		36,979		2.3

Net Revenue

Net revenue was $705.8 million for the three months ended March 28, 2003, an increase of 19%, or $111.0 million, from the three months ended March 29, 2002. Total unit shipments increased to 10.3 million for the quarter as compared to 8.1 million for the corresponding period in the prior year as a result of the Company’s improved competitive position and an increase in demand for hard drives in the personal computer (“PC”) market. Average selling prices (“ASP’s”) decreased to $68 per unit for the quarter from $74 in the corresponding period in the prior year. Historically, ASP’s in the desktop hard drive industry have generally declined annually in the 10-20% range. However, those price declines have moderated over the past few quarters given longer product life cycles, improved supply/demand management and fewer component cost reduction opportunities. Specifically, ASP’s for the three months ended March 28, 2003 represent the fourth consecutive quarter of flat-to-higher ASP’s.

Revenue by geographic region for the three months ended March 28, 2003 was 48% from the Americas, 31% from Europe and 21% from Asia compared to 52%, 33% and 15%, respectively, for the corresponding prior period.

Revenue by sales channel for the three months ended March 28, 2003 was 53% from original equipment manufacturers, 39% from distributors and 8% from the retail channel compared to 57%, 36% and 7%, respectively, for the corresponding prior period.

For the nine months ended March 28, 2003, net revenue was $2,038.2 million, an increase of 27%, or $427.8 million, from the nine months ended March 29, 2002. During this period, total unit shipments increased to 29.2 million from 21.1 million from the corresponding prior period while ASP’s decreased to $70 per unit from $76.

Gross Margin

For the three months ended March 28, 2003, gross margin percentage increased to 17.3% from 13.6% for the corresponding period of the prior year. For the nine months ended March 28, 2003, gross margin percentage increased to 17.2% from 12.9% for the corresponding period of the prior year. The increase in gross margin percentage over the prior year periods was primarily the result of a more moderate pricing environment, manufacturing efficiencies associated with higher unit volume and continuing cost reduction efforts.

Operating Expenses

Total operating expenses, consisting of research and development (“R&D”) and selling, general and administrative (“SG&A”), decreased to 9.2% of net revenue for the three months ended March 28, 2003 as compared to 10.1% of net revenue for the corresponding period of the prior year. For the nine months ended March 28, 2003, total operating expenses decreased to 9.4% of net revenue from 10.8% for the corresponding period of the prior year. The Company’s operating expense structure is highly leveraged. Absolute dollar increases in operating expenses over the prior year are primarily due to higher pay-for-performance and retention plan expenses, resulting from improved Company performance.

R&D expense was $34.7 million for the three months ended March 28, 2003, an increase of 10.4%, or $3.3 million, from the three months ended March 29, 2002. R&D expense for the nine months ended March 28, 2003 was $101.1 million, an increase of 12.9%, or $11.6 million, from the corresponding period of the prior year. The increase in R&D expense from the corresponding periods of the prior year was primarily due to higher employee incentive payments resulting from improved operating results.

SG&A expense was $30.2 million for the three months ended March 28, 2003, an increase of 5.0%, or $1.4 million, from the three months ended March 29, 2002. SG&A expense for the nine months ended March 28, 2003 was $90.3 million, an increase of 6.7%, or $5.6 million, from the corresponding period of the prior year. The increase in SG&A expense from the corresponding periods of the prior year was due to higher employee incentive payments resulting from improved operating results and higher retention plan expenses.

Income Tax Provision

Income tax provision was $2.3 million and $6.3 million for the three and nine months ended March 28, 2003, respectively. The increase in the income tax provision for the three and nine months ended March 28, 2003 is primarily related to an increase in earnings within certain tax jurisdictions. Differences between the effective tax rate estimated for 2003 of 4%, as compared to the U.S. federal statutory rate, are primarily due to earnings of certain subsidiaries which are taxed at substantially lower tax rates as compared with U.S. statutory rates.

Liquidity and Capital Resources

The Company had cash and cash equivalents of $347.1 million at March 28, 2003 and $223.7 million at June 28, 2002. Net cash provided by continuing operations was $236.5 million during the nine months ended March 28, 2003 as compared to net cash provided by continuing operations of $72.2 million during the nine months ended March 29, 2002. This $164.3 million improvement in cash provided by continuing operations consists of a $115.6 million improvement in the Company’s net income, net of non-cash items, and a $48.7 million decrease in cash used to fund working capital requirements. These improvements are due to significantly better operating performance by the Company, including increased revenue and gross margin, improved cost management and efficient asset management.

The Company’s working capital requirements depend upon the effective management of its cash conversion cycle. The cash conversion cycle, which represents the sum of the number of days sales outstanding (“DSO”) and days inventory outstanding (“DIO”) less days payable outstanding (“DPO”), was negative ten days for the nine months ended March 28, 2003, the same as the corresponding period of the prior year. The cash conversion cycle for the nine months ended March 28, 2003 consists of 30 DSO, 16 DIO less 56 DPO.

Uses of cash during the nine months ended March 28, 2003 included net capital expenditures of $43.6 million, primarily to upgrade the Company’s desktop hard drive production capabilities and for the normal replacement of existing assets, $88.0 million for the extinguishment or redemption of its remaining 5.25% zero coupon convertible subordinated debentures due February 18, 2018 (the “Debentures”) and $2.6 million for discontinued operations. Other sources of cash during the period included $21.0 million received in connection with stock option exercises and Employee Stock Purchase Plan purchases.

The Company has a senior credit facility that provides up to $125 million in revolving credit (subject to outstanding letters of credit and a borrowing base calculation), matures on September 20, 2003 and is secured by the Company’s accounts receivable, inventory, 65% of its stock in its foreign subsidiaries and other assets (the “Senior Credit Facility”). At the option of the Company, borrowings bear interest at either LIBOR (with option periods of one to three months) or a base rate, plus a margin determined by the borrowing base. The Senior Credit Facility requires the Company to maintain certain amounts of tangible net worth, prohibits the payment of cash dividends on common stock and contains a number of other covenants. As of March 28, 2003, there were no borrowings under the facility. However, the availability under the Senior Credit Facility has been reduced by $25.2 million for an outstanding letter of credit (refer to Part I, Item 1, Notes to Condensed Consolidated Financial Statements, Note 8 “Legal Proceedings” included in this Quarterly Report on Form 10-Q).

The Company believes its current cash and cash equivalents will be sufficient to meet its working capital needs through the foreseeable future. There can be no assurance that the Senior Credit Facility will continue to be available to the Company. Also, the Company’s ability to sustain its working capital position is dependent upon a number of factors that are discussed below under the heading “Risk Factors That May Affect Future Results”.

Critical Accounting Policies

The Company has prepared the accompanying unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States for interim financial information. The preparation of the financial statements requires the use of judgment and estimates that affect the reported amounts of revenues, expenses, assets and liabilities. The Company has adopted accounting policies and practices that are generally accepted in the industry in which it operates. The Company believes the following are its most critical accounting policies that affect significant areas and involve management’s judgment and estimates. If these estimates differ significantly from actual results, the impact to the consolidated financial statements may be material.

Revenue and Accounts Receivable

In accordance with standard industry practice, the Company has agreements with resellers that provide limited price protection for inventories held by resellers at the time of published list price reductions. In addition, the Company may have agreements with resellers that provide for stock rotation on slow-moving items and other incentive programs. In accordance with current accounting standards, the Company recognizes revenue upon shipment or delivery to resellers and records a reduction to revenue for estimated price protection and other programs in effect until the resellers sell such inventory to their customers. Adjustments are based on anticipated price decreases during the reseller holding period, estimated amounts to be reimbursed to qualifying customers as well as historical pricing information. If end-market demand for hard drives declines significantly, the Company may have to increase sell-through incentive payments to resellers, resulting in an increase in price protection allowances, which could adversely impact operating results.

The Company establishes an allowance for doubtful accounts by analyzing specific customer accounts and assessing its risk of loss based on insolvency, disputes or other collection issues. In addition, the Company routinely analyzes the different receivable aging categories and establishes reserves based on the length of time receivables are past due. If the financial condition of a significant customer deteriorates resulting in their inability to pay their accounts when due, an increase in our allowance for doubtful accounts would be required, which could negatively affect operating results.

The Company records provisions against revenue and cost of revenue for estimated sales returns in the same period that the related revenue is recognized. The Company bases these provisions on existing product return notifications as well as historical returns by product type (see “Warranty”). If actual sales returns exceed expectations, an increase in the sales return provisions would be required, which could negatively affect operating results.

Warranty

The Company records an accrual for estimated warranty costs when revenue is recognized. Warranty covers cost of repair or replacement of the hard drive over the warranty period, which ranges from one to five years. The Company has comprehensive processes with which to estimate accruals for warranty, which include specific detail on hard drives in the field by product type, historical field return rates and costs to repair. If actual product return rates or costs to repair returned products increase above expectations, an increase to the warranty provision would be required, which could negatively affect operating results.

Inventory

Inventories are valued at the lower of cost (first-in, first-out basis) or net realizable value. Inventory write-downs are recorded for the valuation of inventory at the lower of cost or net realizable value by analyzing market conditions and estimates of future sales prices as compared to inventory costs and inventory balances.

The Company evaluates inventory balances for excess quantities and obsolescence on a regular basis by analyzing backlog, estimated demand, inventory on hand, sales levels and other information. The Company writes down inventory balances for excess and obsolete inventory based on the analysis. Unanticipated changes in technology or customer demand could result in a decrease in demand for one or more of our products, which may require an increase in inventory write-downs, which could negatively affect operating results.

Litigation and Other Contingencies

The Company applies Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies” to determine when and how much to accrue for and disclose related to legal and other contingencies. Accordingly, the Company accrues loss contingencies when management, in consultation with its legal advisors, concludes that a loss is probable and is able to be reasonably estimated (refer to Part I, Item 1, Notes to Condensed Consolidated Financial Statements, Note 8 “Legal Proceedings” included in this Quarterly Report on Form 10-Q).

Deferred Tax Assets

The Company’s deferred tax assets, which consist primarily of net operating loss and tax credit carryforwards, are fully reserved due to management’s determination that it is “more likely than not” that these assets will not be realized. This determination is based on the weight of available evidence, the most significant of which is the Company’s loss history in the related tax jurisdictions. Should this determination change in the future, some amount of deferred tax assets could be recognized, resulting in a tax benefit or a reduction of future tax expense.

New Accounting Pronouncements

Refer to Part I, Item 1, Notes to Condensed Consolidated Financial Statements, Note 9 “New Accounting Pronouncements” included in this Quarterly Report on Form 10-Q.

Risk Factors That May Affect Future Results

Risk factors related to the hard drive industry in which we operate

Our operating results depend on our being among the first-to-market, first-to-volume and first-to-quality with our new products at a low cost.

To achieve consistent success with computer manufacturer customers, we must be an early provider of next generation hard drives featuring leading technology and high quality. If we fail to:

	•		develop new products with features required by our customers,

	•		consistently maintain or improve our time-to-market performance with our new products,

	•		produce these products in sufficient volume within our rapid product cycle,

	•		qualify these products with key customers on a timely basis by meeting our customers’ performance and quality specifications,

	•		achieve acceptable manufacturing yields and costs with these products, or

	•		consistently meet stated quality requirements on delivered products,

our operating results could be adversely affected.

Product life cycles require continuous technical innovation associated with higher areal densities.

New products require higher areal densities (the gigabyte of storage per disk) than previous product generations, posing formidable technical challenges. Higher areal densities require fewer heads and disks to achieve a given drive capacity, which means that existing head technology must be improved or new technology developed to accommodate more data on a single disk. In addition, our introduction of new products during a technology transition increases the likelihood of unexpected quality concerns. Our failure to bring high quality new products to market on time and at acceptable costs could put us at a competitive disadvantage to companies that achieve these results.

Increases in areal density may outpace customers’ demand for storage capacity.

The rate of increase in areal density may be greater than the increase in our customers’ demand for aggregate storage capacity. This could lead to our customers’ storage capacity needs being satisfied with fewer hard disk drives or with more lower-cost single-surface drives, thereby decreasing our sales. As a result, even with increasing aggregate demand for storage capacity, our unit volumes and/or ASP’s could decline, which could adversely affect our results of operations.

Short product life cycles make it difficult to recover the cost of development.

Product life cycles have extended during the past twelve months due to a decrease in the rate of hard drive areal density growth. However, there can be no assurance that this trend will continue. Historically, more rapid increases in areal density resulted in shorter product life cycles, with each generation of hard drives being more cost effective than the previous one. Shorter product life cycles make it more difficult to recover the cost of product development before the product becomes obsolete. Although we believe that the current rate of growth in areal density is lower than in the past several years and will continue to decrease in the near term, we expect that areal density will continue to increase. Our failure to recover the cost of product development in the future could adversely affect our operating results.

Short product life cycles and new products force us to continually qualify new products with our customers.

Short product life cycles and continuously changing products require us to regularly engage in new product qualification with our customers. To be considered for qualification we must be among the leaders in time-to-market with our new products. Once a product is accepted for qualification testing, any failure or delay in the qualification process can result in our losing sales to that customer until the next generation of products is introduced. The effect of missing a product qualification opportunity is magnified by the limited

number of high volume computer manufacturers, most of which continue to consolidate their share of the PC market. If product life cycles continue to be extended due to a decrease in the rate of areal density growth, we may have a significantly longer period to wait before we have an opportunity to qualify a new product with a customer, which could harm our competitive position. These risks are increased because we expect cost improvements and competitive pressures to result in declining sales and gross margins on our current generation products.

Increasing product life cycles may require us to reduce our costs to remain competitive.

Longer product life cycles have resulted from a decrease in the rate of areal density growth in the past twelve months. If longer product life cycles continue, we may need to develop new technologies or programs, such as system-on-a-chip, to reduce our costs on any particular product in order to maintain competitive pricing for such product. This may result in an increase in our overall expenses and a decrease in our gross margins, both of which could adversely affect our operating results.

Unexpected technology advances in the hard drive industry could harm our competitive position.

If one of our competitors were able to implement a significant advance in head or disk drive technology that enables a “step-change” increase in areal density that permits greater storage of data on a disk, it could put us at a competitive disadvantage and harm our operating results.

Advances in magnetic, optical, semiconductor or other data storage technologies could result in competitive products that have better performance or lower cost per unit of capacity than our products. If these products prove to be superior in performance or cost per unit of capacity, we could be at a competitive disadvantage to the companies offering those products.

The decline of ASP’s in the hard disk drive industry could adversely affect our operating results.

The hard disk drive industry has experienced declining ASP’s in recent years. Although the rate of decline has decreased in recent quarters, there can be no assurance that this trend will continue. Increases in areal density mean that the average drive we sell has fewer heads and disks for the same capacity, and therefore lower component cost. Because of the competitiveness of the hard drive industry, lower costs generally mean lower prices. This is true even for those products that are competitive and introduced into the market in a timely manner. Our ASP’s decline even further when competitors lower prices as a result of decreased costs or to absorb excess capacity, liquidate excess inventories, restructure or attempt to gain market share. A continued decline in ASP’s could cause our operating results to suffer.

The hard drive industry is highly competitive and characterized by rapid shifts in market share among the major competitors.

The price of hard drives has fallen over time due to increases in supply, cost reductions, technological advances and price reductions by competitors seeking to liquidate excess inventories or attempting to gain market share. In addition, rapid technological changes often reduce the volume and profitability of sales of existing products and increase the risk of inventory obsolescence. These factors, taken together, result in significant and rapid shifts in market share among the industry’s major participants. For example, during the first quarter of 2000, the Company lost market share as a result of a product recall. Similar losses in market share could adversely affect our operating results.

Our prices and margins are subject to declines due to unpredictable end-user demand and periodic oversupply of hard drives.

Demand for our hard drives depends on the demand for systems manufactured by our customers and on storage upgrades to existing systems. The demand for systems has been volatile in the past and often has had an exaggerated effect on the demand for hard drives in any given period. As a result, the hard drive market has experienced periods of excess capacity, which has led to intense price competition. During calendar year 2001 and the first half of calendar year 2002, the industry experienced weak PC demand in the U.S. and other markets due in part to general economic conditions worldwide. If intense price competition occurs as a result of weak demand, we may be forced to lower prices sooner and more than expected, which could result in lower revenues and gross margins.

Changes in the markets for hard drives require us to develop new products.

Over the past few years the consumer market for desktop computers has shifted significantly towards lower priced systems. According to data released by International Data Corporation Tracker in December 2002, systems priced below $599 currently

comprise the fastest growing segment of the consumer market for desktop computers. Although we were late to market with a value line hard drive to serve the low-cost PC market, we are now offering such value line products at prices that we view as competitive. However, if we are not able to continue to offer a competitively priced value line hard drive for the low-cost PC market, our share of that market will likely fall, which could harm our operating results.

The PC market is fragmenting into a variety of computing devices and products. Some of these products, such as Internet appliances, may not contain a hard drive. On the other hand, many industry analysts expect, as do we, that as broadcasting and communications are increasingly converted to digital technology from the older, analog technology, the technology of computers, consumer electronics and communication devices will converge, and hard drives will be found in many consumer products other than computers. For the quarter ended March 28, 2003, approximately 3% of our unit sales were for consumer products other than computers, primarily gaming devices. If we are not successful in using our hard drive technology and expertise to develop new products for these emerging markets, it will likely harm our operating results.

The market acceptance for hard disk drives in game consoles continues to be uncertain.

The use of hard disk drives in the game console market is a fairly recent trend. Due to the price competitive nature of the hard disk drive industry, with selling prices of PC’s being substantially higher than game consoles, game manufacturers may not have the ability to either incorporate or continue to incorporate hard disk drives into their overall architecture. In addition, current price reduction demands from either current or future game console customers may not make hard disk drive integration an attractive market for us or other hard drive manufacturers. Also, the success of specific game consoles such as Microsoft’s Xbox™, which uses a hard disk drive for game use, remains uncertain.

If we do not successfully expand into new hard drive market segments, our business may suffer.

To remain a significant supplier of hard disk drives, we will need to offer a broad range of disk drive products to our customers. We currently offer a variety of 3.5-inch form factor hard disk drives for the desktop computer market. However, demand for desktop hard drives may shift to products in smaller form factors, which we do not currently offer, but which some of our competitors offer. The desktop PC industry is transitioning to higher speed interfaces such as Serial ATA to handle higher data transfer rates and 80 gigabyte (“GB”) per platter technology for increased capacity. The Company currently offers Serial ATA and 80 GB per platter products, however, the transition of technology and the introduction of new products is challenging and creates risks. While we continue to develop new products and look to expand into non-desktop applications such as consumer electronics and game consoles, the success of our new product introductions is dependent on a number of factors, including difficulties faced in manufacturing ramp, market acceptance, effective management of inventory levels in line with anticipated product demand, and the risk that our new products will have quality problems or other defects in the early stages of introduction that were not anticipated in the design of those products. If we fail to successfully develop and manufacture new products, customers may decrease the amounts of our products that they purchase, and we may lose business to our competitors who offer these products or who use their dominance in the enterprise or mobile market to encourage sales of desktop hard drives.

We depend on our key personnel and skilled employees.

Our success depends upon the continued contributions of our key personnel and skilled employees, many of whom would be extremely difficult to replace. Worldwide competition for skilled employees in the hard drive industry is intense. Volatility or lack of positive performance in our stock price may adversely affect our ability to retain key personnel or skilled employees who have been granted stock options. If we are unable to retain our existing key personnel or skilled employees or hire and integrate new key personnel or skilled employees, our operating results would likely be harmed.

Risk factors relating to Western Digital particularly

Loss of market share with a key customer could harm our operating results.

A majority of our revenue comes from a few customers. For example, during the nine months ended March 28, 2003, sales to our top 10 customers accounted for approximately 52% of revenue. These customers have a variety of suppliers to choose from and therefore can make substantial demands on us. Even if we successfully qualify a product with a customer, the customer generally is not obligated to purchase any minimum volume of products from us and is able to terminate its relationship with us at any time. Our ability to maintain strong relationships with our principal customers is essential to our future performance. If we lose a key customer, or if any of our key customers reduce their orders of our products or require us to reduce our prices before we are able to reduce costs,

our operating results would likely be harmed. For example, this occurred with our enterprise hard drive product line early in the third quarter of 2000 and is one of the factors which led to our decision to exit the enterprise hard drive market.

Dependence on a limited number of qualified suppliers of components could lead to delays, lost revenue or increased costs.

Because we do not manufacture any of the basic components in our hard drives, an extended shortage of required components or the failure of key suppliers to remain in business, adjust to market conditions, or to meet our quality, yield or production requirements could harm us more severely than our competitors, some of whom manufacture certain of the components for their hard drives, and could significantly harm our operating results. A number of the components used by us are available from only a single or limited number of qualified outside suppliers, and there is continued attrition and consolidation in our supplier base. If a component is in short supply, or a supplier fails to qualify or has a quality issue with a component, we may experience delays or increased costs in obtaining that component. In addition, if a component becomes unavailable, we could suffer significant loss of revenue. For example, we lost revenue in September 1999 when we had to shut down production of a product line for approximately two weeks as a result of a faulty power driver chip that was sole-sourced from a third party supplier.

To reduce the risk of component shortages, we attempt to provide significant lead times when buying these components. As a result, we may have to pay significant cancellation charges to suppliers if we cancel orders, as we did in 1998 when we accelerated our transition to magneto-resistive recording head technology, and as we did in 2000 as a result of our decision to exit the enterprise hard drive market.

In some cases, not only are we dependant on a limited number of suppliers, but we also have entered into contractual commitments that require us to buy a substantial number of components from one supplier. For example in April 1999, we entered into a three-year volume purchase agreement with Komag under which we buy a substantial portion of our media components from Komag. In October 2001, we amended the Komag volume purchase agreement to extend the initial term to six years. Similarly, in February 2001, we entered into a two-year volume purchase agreement with IBM under which we buy a substantial portion of our read channel chips from IBM. Effective June 2002, we amended the IBM volume purchase agreement to extend the initial term through December 31, 2003. These strategic relationships have increased our dependence on each of Komag and IBM as a supplier. Our future operating results may depend substantially on Komag’s ability to timely qualify its media components in our new development programs, and each of Komag’s and IBM’s ability to supply us with these components or chips, as the case may be, in sufficient volume to meet our production requirements. A significant disruption in Komag’s ability to manufacture and supply us with media components or IBM’s ability to manufacture and supply us with read channel chips could harm our operating results.

To develop new products we must maintain effective partner relationships with our strategic component suppliers.

Under our business model, we do not manufacture any of the component parts used in our hard drives. As a result, the success of our products depends on our ability to gain access to and integrate parts that are “best in class” from reliable component suppliers. To do so we must effectively manage our relationships with our strategic component suppliers. We must also effectively integrate different products from a variety of suppliers, each of which employs variations on technology which can impact, for example, feasible combinations of heads and media components. We are currently engaged in litigation with Cirrus, a supplier who previously was the sole source of read channel chips for our hard drives. As a result of the disputes that gave rise to the litigation, our business operations were at risk until another supplier’s read channel chips could be designed into our products. Similar disputes with other strategic component suppliers could adversely affect our operating results.

We have only one primary high-volume manufacturing facility, and a secondary smaller facility, which subjects us to the risk of damage or loss of either facility.

The majority of our manufacturing volume comes from one facility in Malaysia. During 2002, we acquired a second, smaller manufacturing facility in Thailand. A fire, flood, earthquake or other disaster, condition or event that adversely affects either our Malaysia or Thailand facility or ability to manufacture could result in a loss of sales and revenue and harm our operating results.

Terrorist attacks may adversely affect our business and operating results.

The terrorist attacks on the United States on September 11, 2001, the United States-led military response to counter terrorism and the continued threat of terrorist activity and other acts of war or hostility have created uncertainty in the financial and insurance markets and have significantly increased the political, economic and social instability in some of the geographic areas in which the Company operates. Further acts of terrorism, either domestically or abroad, could create further uncertainties and instability. To the

extent this results in disruption or delays of our manufacturing capabilities or shipments of our products, our business, operating results and financial condition could be adversely affected.

Manufacturing our products abroad subjects us to numerous risks.

We are subject to risks associated with our foreign manufacturing operations, including:

	•		obtaining requisite United States and foreign governmental permits and approvals;

	•		currency exchange rate fluctuations or restrictions;

	•		political instability and civil unrest;

	•		transportation delays or higher freight rates;

	•		labor problems;

	•		trade restrictions or higher tariffs;

	•		exchange, currency and tax controls and reallocations;

	•		increasing labor and overhead costs; and

	•		loss or non-renewal of favorable tax treatment under agreements or treaties with foreign tax authorities.

We have attempted to manage the impact of foreign currency exchange rate changes by, among other things, entering into short-term, forward exchange contracts. However, those contracts do not cover our full exposure and can be canceled by the issuer if currency controls are put in place, which occurred in Malaysia during the first quarter of 1999. As a result of the Malaysian currency controls, we are no longer hedging the Malaysian currency risk. Currently, we hedge the Euro, Thai Baht and British Pound Sterling.

The nature of our business and our reliance on intellectual property and other proprietary information subjects us to the risk of significant litigation.

The hard drive industry has been characterized by significant litigation. This includes litigation relating to patent and other intellectual property rights, product liability claims and other types of litigation. Litigation can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of litigation are inherently uncertain and may result in adverse rulings or decisions. We may enter into settlements or be subject to judgments that may, individually or in the aggregate, have a material adverse effect on our business, financial condition or results of operations.

We are currently evaluating notices of alleged patent infringement or notices of patents from patent holders. We also are a party to several judicial and other proceedings relating to patent and other intellectual property rights. If claims or actions are asserted against us, we may be required to obtain a license or cross-license, modify our existing technology or design a new non-infringing technology. Such licenses or design modifications can be extremely costly. In addition, no assurance can be given that in a particular case a license will be offered or that the offered terms will be acceptable to us. We may also be liable for any past infringement. If there is an adverse ruling against us in an infringement lawsuit, an injunction could be issued barring production or sale of any infringing product. It could also result in a damage award equal to a reasonable royalty or lost profits or, if there is a finding of willful infringement, treble damages. Any of these results would likely increase our costs and harm our operating results.

Our reliance on intellectual property and other proprietary information subjects us to the risk that these key ingredients of our business could be copied by competitors.

Our success depends, in significant part, on the proprietary nature of our technology, including non-patentable intellectual property such as our process technology. Despite safeguards, to the extent that a competitor is able to reproduce or otherwise capitalize on our technology, it may be difficult, expensive or impossible for us to obtain necessary legal protection. Also, the laws of some foreign countries may not protect our intellectual property to the same extent as do the laws of the United States. In addition to patent protection of intellectual property rights, we consider elements of our product designs and processes to be proprietary and confidential.

We rely upon employee, consultant and vendor non-disclosure agreements and contractual provisions and a system of internal safeguards to protect our proprietary information. However, any of our registered or unregistered intellectual property rights may be challenged or exploited by others in the industry, which might harm our operating results.

We are subject to risks related to product defects, which could subject us to warranty claims in excess of our warranty provisions or which are greater than anticipated due to the unenforceability of liability limitations.

We generally warrant our products for one to five years. The standard warranties used by us contain limits on damages and exclusions of liability for consequential damages and for negligent or improper use of the products. We record an accrual for estimated warranty costs at the time revenue is recognized. We may incur additional operating expenses if our warranty provision does not reflect the actual cost of resolving issues related to defects in our products. If these additional expenses are significant, it could adversely affect our business, financial condition and results of operations.

Inaccurate projections of demand for our product can cause large fluctuations in our quarterly results.

We often book and ship a high percentage (at times in excess of 50%) of our total quarterly sales in the third month of the quarter, which makes it difficult for us to forecast our financial results prior to the end of the quarter. In addition, our quarterly projections and results may be subject to significant fluctuations as a result of a number of other factors including:

	•		the timing of orders from and shipment of products to major customers;

	•		our product mix;

	•		changes in the prices of our products;

	•		manufacturing delays or interruptions;

	•		acceptance by customers of competing products in lieu of our products;

	•		variations in the cost of components for our products;

	•		limited access to components that we obtain from a single or a limited number of suppliers, such as Komag and IBM;

	•		competition and consolidation in the data storage industry; and

	•		seasonal and other fluctuations in demand for PC’s often due to technological advances.

If we do not forecast total quarterly demand accurately, it can have a material adverse effect on our quarterly results.

Rapidly changing market conditions in the hard drive industry make it difficult to estimate actual results.

We have made and continue to make a number of estimates and assumptions relating to our consolidated financial reporting. The rapidly changing market conditions with which we deal means that actual results may differ significantly from our estimates and assumptions. Key estimates and assumptions for us include:

	•		accruals for warranty costs related to product defects;

	•		price protection adjustments and other sales promotions and allowances on products sold to retailers, resellers and distributors;

	•		inventory adjustments for write-down of inventories to lower of cost or market value (net realizable value);

	•		reserves for doubtful accounts;

	•		accruals for product returns;

	•		accruals for litigation and other contingencies; and

	•		reserves for deferred tax assets.

The market price of our common stock is volatile.

The market price of our common stock has been, and may continue to be, extremely volatile. Factors such as the following may significantly affect the market price of our common stock:

	•		actual or anticipated fluctuations in our operating results;

	•		announcements of technological innovations by us or our competitors which may decrease the volume and profitability of sales of our existing products and increase the risk of inventory obsolescence;

	•		new products introduced by us or our competitors;

	•		periods of severe pricing pressures due to oversupply or price erosion resulting from competitive pressures;

	•		developments with respect to patents or proprietary rights;

	•		conditions and trends in the hard drive, data and content management, storage and communication industries; and

	•		changes in financial estimates by securities analysts relating specifically to us or the hard drive industry in general.

In addition, general economic conditions may cause the stock market to experience extreme price and volume fluctuations from time to time that particularly affect the stock prices of many high technology companies. These fluctuations often appear to be unrelated to the operating performance of the companies.

Securities class action lawsuits are often brought against companies after periods of volatility in the market price of their securities. A number of such suits have been filed against us in the past, and should any new lawsuits be filed, such matters could result in substantial costs and a diversion of resources and management’s attention.

We may be unable to raise future capital through debt or equity financing.

Due to the risks described herein, in the future we may be unable to maintain adequate financial resources for capital expenditures, expansion or acquisition activity, working capital and research and development. We have a credit facility, which matures on September 20, 2003. If we decide to increase or accelerate our capital expenditures or research and development efforts, or if results of operations do not meet our expectations, we could require additional debt or equity financing. However, we cannot ensure that additional financing will be available to us or available on acceptable terms. An equity financing could also be dilutive to our existing stockholders.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosure About Foreign Currency Risk

Although the majority of the Company’s transactions are in U.S. Dollars, some transactions are based in various foreign currencies. The Company purchases short-term, forward exchange contracts to hedge the impact of foreign currency fluctuations on certain underlying assets, liabilities and commitments for operating expenses denominated in foreign currencies. The purpose for entering into these hedge transactions is to minimize the impact of foreign currency fluctuations on the results of operations. A majority of the increases or decreases in the Company’s foreign currency operating expenses are offset by gains and losses on the hedges. The contract maturity dates do not exceed three months. The Company does not purchase short-term forward exchange contracts for trading purposes. Currently, the Company focuses on hedging its foreign currency risk related to the Euro, British Pound Sterling and the Thai Baht.

As of March 28, 2003, the Company had outstanding the following purchased foreign currency forward exchange contracts (in millions, except weighted average contract rate):


		U.S. DOLLAR		WEIGHTED
		EQUIVALENT		AVERAGE
		AMOUNT		CONTRACT RATE

FOREIGN CURRENCY FORWARD CONTRACTS:
	Euro	$	1.6		1.08
	British Pound Sterling	$	2.0		1.56
	Thai Baht	$	31.5		42.97

During the three and nine months ended March 28, 2003 and March 29, 2002, respectively, total realized transaction and forward exchange contract currency gains and losses were not material to the condensed consolidated financial statements. Based on historical experience, the Company does not expect that a significant change in foreign exchange rates would materially affect the Company’s condensed consolidated financial statements.

Disclosure About Other Market Risks

Fixed Interest Rate Risk

During the three months ended March 28, 2003, the Company redeemed its remaining Debentures outstanding with an aggregate of $160.3 million in principal amount at maturity for cash consideration of $73.7 million.

Variable Interest Rate Risk

At the option of the Company, borrowings under the Senior Credit Facility would bear interest at either LIBOR (with option periods of one to three months) or a base rate, plus a margin determined by the borrowing base. This is the only Company borrowing facility which does not have a fixed rate of interest. At March 28, 2003, there were no borrowings outstanding under the Senior Credit Facility.

Fair Value Risk

The Company owns approximately 1.0 million shares of Vixel Corporation common stock (the “Vixel Stock”). As of March 28, 2003, the market value of the Vixel Stock was approximately $3.2 million. Changes in the market value of the Vixel Stock are recorded as unrealized gains or losses in other comprehensive income (shareholders’ equity). As of March 28, 2003, a $3.2 million total accumulated unrealized gain has been recorded in accumulated other comprehensive income related to the Vixel Stock. Due to market fluctuations, a decline in the Vixel Stock’s fair market value could occur in future periods. If the Company sells any portion of the Vixel Stock, the related unrealized gain on the date of sale will become realized and reflected as a gain in the Company’s statement of income.

Item 4. CONTROLS AND PROCEDURES

(a)		Within the 90-day period prior to the filing of this report, an evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

(b)		There have been no significant changes in our internal controls or in other factors that could significantly affect the internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Refer to Part I, Item 1, Notes to Condensed Consolidated Financial Statements, Note 8 “Legal Proceedings” included in this Quarterly Report on Form 10-Q which is hereby incorporated by reference. Reference is also made to Part II, Item 1, “Legal Proceedings”, in our Quarterly Reports on Form 10-Q for the quarters ended September 27 and December 27, 2002, for previous descriptions of these matters.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits:


3.1†		Amended and Restated Certificate of Incorporation of the Company, filed with the office of the Secretary of State of the State of Delaware on April 6, 2001.

3.2†		Amended and Restated By-laws of the Company, adopted as of April 6, 2001.

10.10*		Amended and Restated Deferred Compensation Plan, effective March 28, 2003.

10.11*		Amended and Restated Executive Bonus Plan, effective March 28, 2003.

10.57*		Western Digital Corporation Non-Employee Director Restricted Stock Unit Plan, effective March 28, 2003.

10.58§		Supply Agreement for the Fabrication and Purchase of Semiconductor Products, dated June 13, 2002, among Marvell Semiconductor, Inc., Marvell Asia Pte. Ltd. and Western Digital Technologies, Inc.

99.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)		*Reports on form 8-K:*

		On February 18, 2003, the Company filed a current report on Form 8-K to announce the results of a tender offer to purchase the Company’s outstanding zero coupon convertible subordinated debentures due February 18, 2018.

		On March 3, 2003, the Company filed a current report on Form 8-K to provide Regulation FD disclosure in connection with investor presentations delivered by officials of the Company that included an update on conditions in the hard drive industry.

		On March 18, 2003, the Company filed a current report on Form 8-K to announce that the Company elected to redeem all the Company’s outstanding zero coupon convertible subordinated debentures on April 17, 2003.


†		Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 6, 2001.

*		Compensation plan, contract or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.

§		Certain portions of this exhibit have been omitted pursuant to a confidential treatment request filed separately with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				WESTERN DIGITAL CORPORATION
				Registrant

				/s/ Scott Mercer

				D. Scott Mercer
				Senior Vice President and Chief Financial Officer
				(Principal Financial Officer)

				/s/ Joseph R. Carrillo

				Joseph R. Carrillo
				Vice President and Corporate Controller
				(Principal Accounting Officer)

Date: May 9, 2003

CERTIFICATIONS

Certification of Chief Executive Officer

I, Matthew E. Massengill, certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of Western Digital Corporation;

	2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

	4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c)		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated: May 9, 2003


		/s/	MATTHEW E. MASSENGILL

			Matthew E. Massengill
			Chief Executive Officer

Certification of Chief Financial Officer

I, D. Scott Mercer, certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of Western Digital Corporation;

	2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

	4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c)		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Dated: May 9, 2003


	/s/ SCOTT MERCER

	D. Scott Mercer
	Chief Financial Officer

EXHIBIT INDEX


3.1†		Amended and Restated Certificate of Incorporation of the Company, filed with the office of the Secretary of State of the State of Delaware on April 6, 2001.

3.2†		Amended and Restated By-laws of the Company, adopted as of April 6, 2001.

10.10*		Amended and Restated Deferred Compensation Plan, effective March 28, 2003.

10.11*		Amended and Restated Executive Bonus Plan, effective March 28, 2003.

10.57*		Western Digital Corporation Non-Employee Director Restricted Stock Unit Plan, effective March 28, 2003.

10.58§		Supply Agreement for the Fabrication and Purchase of Semiconductor Products, dated June 13, 2002, among Marvell Semiconductor, Inc., Marvell Asia Pte. Ltd. and Western Digital Technologies, Inc.

99.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


†		Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 6, 2001.

*		Compensation plan, contract or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.

§		Certain portions of this exhibit have been omitted pursuant to a confidential treatment request filed separately with the Securities and Exchange Commission.


                                                                   EXHIBIT 10.10

WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

                              AMENDED AND RESTATED

                            EFFECTIVE MARCH 28, 2003

                               COPYRIGHT (C) 1997
                      BY COMPENSATION RESOURCE GROUP, INC.
                               ALL RIGHTS RESERVED



WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

                                TABLE OF CONTENTS



                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
Purpose.....................................................................................................      1

ARTICLE 1     Definitions...................................................................................      1

ARTICLE 2     Selection, Enrollment, Eligibility............................................................      8

     2.1      Selection by Committee........................................................................      8
     2.2      Enrollment Requirements.......................................................................      8
     2.3      Eligibility; Commencement of Participation....................................................      9
     2.4      Termination of Participation and/or Deferrals.................................................      9

ARTICLE 3     Deferral Commitments/Company Matching/Crediting Taxes.........................................     10

     3.1      Minimum Deferrals.............................................................................     10
     3.2      Maximum Deferral..............................................................................     10
     3.3      Election to Defer; Effect of Election Form....................................................     11
     3.4      Withholding of Annual Deferral Amounts........................................................     11
     3.5      Annual Company Contribution Amount............................................................     12
     3.6      Investment of Trust Assets....................................................................     12
     3.7      Vesting.......................................................................................     12
     3.8      Crediting/Debiting of Account Balances........................................................     13
     3.9      FICA and Other Taxes..........................................................................     15
     3.10     Distributions.................................................................................     16

ARTICLE 4     Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election...................     16

     4.1      Short-Term Payout.............................................................................     16
     4.2      Other Benefits Take Precedence Over Short-Term................................................     16
     4.3      Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.........................     17
     4.4      Withdrawal Election...........................................................................     17

ARTICLE 5     Retirement Benefit............................................................................     18

     5.1      Retirement Benefit............................................................................     18
     5.2      Payment of Retirement Benefit.................................................................     18
     5.3      Death Prior to Completion of Retirement Benefit...............................................     18

ARTICLE 6     Pre-Retirement Survivor Benefit...............................................................     18


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WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

                                                                                                             
     6.1      Pre-Retirement Survivor Benefit...............................................................     18
     6.2      Payment of Pre-Retirement Survivor Benefit....................................................     18

ARTICLE 7     Termination Benefit...........................................................................     19

     7.1      Termination Benefit...........................................................................     19
     7.2      Payment of Termination Benefit................................................................     19

ARTICLE 8     Disability Waiver and Benefit.................................................................     19

     8.1      Disability Waiver.............................................................................     19
     8.2      Continued Eligibility; Disability Benefit.....................................................     20

ARTICLE 9     Beneficiary Designation.......................................................................     20

     9.1      Beneficiary...................................................................................     20
     9.2      Beneficiary Designation; Change; Spousal Consent..............................................     20
     9.3      Acknowledgement...............................................................................     21
     9.4      No Beneficiary Designation....................................................................     21
     9.5      Doubt as to Beneficiary.......................................................................     21
     9.6      Discharge of Obligations......................................................................     21

ARTICLE 10    Leave of Absence..............................................................................     21

     10.1     Paid Leave of Absence.........................................................................     21
     10.2     Unpaid Leave of Absence.......................................................................     21

ARTICLE 11    Termination, Amendment or Modification........................................................     22

     11.1     Termination...................................................................................     22
     11.2     Amendment.....................................................................................     22
     11.3     Plan Agreement................................................................................     23
     11.4     Effect of Payment.............................................................................     24

ARTICLE 12    Administration................................................................................     24

     12.1     Committee Duties..............................................................................     24
     12.2     Agents........................................................................................     24
     12.3     Binding Effect of Decisions...................................................................     24
     12.4     Indemnity of Committee........................................................................     24
     12.5     Employer Information..........................................................................     24

ARTICLE 13    Other Benefits and Agreements.................................................................     25

     13.1     Coordination with Other Benefits..............................................................     25



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WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

                                                                                                             
ARTICLE 14    Claims Procedures.............................................................................     25

     14.1     Presentation of Claim.........................................................................     25
     14.2     Notification of Decision......................................................................     25
     14.3     Review of a Denied Claim......................................................................     26
     14.4     Decision on Review............................................................................     26
     14.5     Legal Action..................................................................................     26

ARTICLE 15    Trust.........................................................................................     26

     15.1     Establishment of the Trust....................................................................     26
     15.2     Interrelationship of the Plan and the Trust...................................................     27
     15.3     Distributions From the Trust..................................................................     27

ARTICLE 16    Miscellaneous.................................................................................     27

     16.1     Status of Plan................................................................................     27
     16.2     Unsecured General Creditor....................................................................     27
     16.3     Employer's Liability..........................................................................     27
     16.4     Nonassignability..............................................................................     27
     16.5     Not a Contract of Employment..................................................................     28
     16.6     Furnishing Information........................................................................     28
     16.7     Terms.........................................................................................     28
     16.8     Captions......................................................................................     28
     16.9     Governing Law.................................................................................     28
     16.10        Notice....................................................................................     28
     16.11        Successors................................................................................     29
     16.12        Spouse's Interest.........................................................................     29
     16.13        Validity..................................................................................     29
     16.14        Incompetent...............................................................................     29
     16.15        Court Order...............................................................................     29
     16.16        Distribution in the Event of Taxation.....................................................     30
     16.17        Insurance.................................................................................     30
     16.18        Legal Fees To Enforce Rights After Change in Control......................................     30



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WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

                           WESTERN DIGITAL CORPORATION

                           DEFERRED COMPENSATION PLAN

                              Amended and Restated

                            Effective March 28, 2003

                                     PURPOSE

         The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of Western Digital Corporation, a Delaware corporation, and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA. The Plan was originally
adopted effective May 16, 1994, previously amended and restated effective each
of January 9, 1997, January 1, 1998, August 1, 2001, and July 1, 2002, and is
hereby amended and restated again effective March 28, 2003.

                                    ARTICLE 1
                                   DEFINITIONS

         For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:

1.1      "Account Balance" shall mean, with respect to a Participant, a credit
         on the records of the Employer equal to the sum of (i) the Deferral
         Account balance and (ii) the Company Contribution Account balance. The
         Account Balance, and each other specified account balance, shall be a
         bookkeeping entry only and shall be utilized solely as a device for the
         measurement and determination of the amounts to be paid to a
         Participant, or his or her designated Beneficiary, pursuant to this
         Plan.

1.2      "Annual Bonus" shall mean any compensation, in addition to Base Annual
         Salary relating to services performed during any calendar year, whether
         or not paid in such calendar year or included on the Federal Income Tax
         Form W-2 for such calendar year, payable to a Participant as an
         Employee under any incentive or bonus plan including without limitation
         the Management Incentive Compensation Plan, Profit Sharing Plan (Cash
         Element), Long-Term Incentive Plan, Variable Incentive Plan, Incentive
         Compensation Plan, Sales and Marketing Incentive Plan or the Executive
         Retention Plan. Notwithstanding the foregoing, Annual Bonus shall also
         include amounts otherwise payable during a calendar year under a
         Long-Term Retention Agreement.

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WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

1.3      "Annual Company Contribution Amount" shall mean, for any one Plan Year,
         the amount determined in accordance with Section 3.5.

1.4      "Annual Deferral Amount" shall mean that portion of a Participant's
         Base Annual Salary, Annual Bonus and Directors Fees that a Participant
         elects to have, and is deferred, in accordance with Article 3, for any
         one Plan Year. In the event of a Participant's Retirement, Disability
         (if deferrals cease in accordance with Section 8.1), death or a
         Termination of Employment prior to the end of a Plan Year, such year's
         Annual Deferral Amount shall be the actual amount withheld prior to
         such event.

1.5      "Annual Installment Method" shall be an annual installment payment over
         the number of years selected by the Participant in accordance with this
         Plan, calculated as follows: The vested Account Balance of the
         Participant shall be calculated as of the close of business on the last
         business day of the year. The annual installment shall be calculated by
         multiplying this balance by a fraction, the numerator of which is one,
         and the denominator of which is the remaining number of annual payments
         due the Participant. By way of example, if the Participant elects a 10
         year Annual Installment Method, the first payment shall be 1/10 of the
         vested Account Balance, calculated as described in this definition. The
         following year, the payment shall be 1/9 of the vested Account Balance,
         calculated as described in this definition. Each annual installment
         shall be paid on or as soon as practicable after the last business day
         of the applicable year.

1.6      "Base Annual Salary" shall mean the annual cash compensation relating
         to services performed during any calendar year, whether or not paid in
         such calendar year or included on the Federal Income Tax Form W-2 for
         such calendar year, excluding bonuses, commissions, overtime, fringe
         benefits, stock options, relocation expenses, incentive payments,
         non-monetary awards, directors fees and other fees, automobile and
         other allowances paid to a Participant for employment services rendered
         (whether or not such allowances are included in the Employee's gross
         income). Base Annual Salary shall be calculated before reduction for
         compensation voluntarily deferred or contributed by the Participant
         pursuant to all qualified or non-qualified plans of any Employer and
         shall be calculated to include amounts not otherwise included in the
         Participant's gross income under Code Sections 125, 402(e)(3), 402(h),
         or 403(b) pursuant to plans established by any Employer; provided,
         however, that all such amounts will be included in compensation only to
         the extent that, had there been no such plan, the amount would have
         been payable in cash to the Employee.

1.7      "Beneficiary" shall mean one or more persons, trusts, estates or other
         entities, designated in accordance with Article 9, that are entitled to
         receive benefits under this Plan upon the death of a Participant.

                                      -2-



WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

1.8      "Beneficiary Designation Form" shall mean the form established from
         time to time by the Committee that a Participant completes, signs and
         returns to the Committee to designate one or more Beneficiaries.

1.9      "Board" shall mean the board of directors of the Company.

1.10     "Change in Control" shall mean the first to occur of any of the
         following events:

         (a)      Any person (other than the Company or any subsidiary thereof
                  or any employee benefit plan of the Company or any subsidiary
                  thereof, or any underwriter in connection with a firm
                  commitment public offering of the Company's common stock),
                  alone or together with its affiliates and associates,
                  including any group of Persons which is deemed a "person"
                  under Section 13(d)(3) of the Exchange Act, becomes the
                  beneficial owner (as such term is defined in Rule 13d-3 of the
                  Exchange Act, except that a person shall also be deemed the
                  beneficial owner of all securities which such person may have
                  a right to acquire, whether or not such right is presently
                  exercisable), directly or indirectly, of thirty-three and
                  one-third percent or more of (i) the then-outstanding shares
                  of the Company's common stock or (ii) securities representing
                  thirty-three and one-third percent or more of the combined
                  voting power of the Company's then outstanding voting
                  securities;

         (b)      A change, during any period of two consecutive years, of a
                  majority of the Board of the Company as constituted as of the
                  beginning of such period, unless the election, or nomination
                  for election by the Company's stockholders, of each director
                  who was not a director at the beginning of such period was
                  approved by vote of at least two-thirds of the Incumbent
                  Directors then in office (for purposes hereof, "Incumbent
                  Directors" shall consist of the directors holding office as of
                  the effective date of this Plan and any person becoming a
                  director subsequent to such date whose election, or nomination
                  for election by the Company's stockholders, is approved by a
                  vote of at least a majority of the Incumbent Directors then in
                  office);

         (c)      Consummation of any merger, consolidation, reorganization or
                  other extraordinary transactions (or series of related
                  transactions) involving the Company which results in the
                  stockholders of the Company having power to vote in the
                  ordinary election of directors immediately prior to such
                  transaction (or series of related transactions) failing to
                  beneficially own at least a majority of the securities of the
                  Company having the power to vote in the ordinary election of
                  directors which are outstanding after giving effect to such
                  transaction (or series of related transactions); or

         (d)      The stockholders of the Company approve a plan of complete
                  liquidation of the Company or the sale of substantially all of
                  the assets of the Company; or

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WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

         (e)      Substantially all of the assets of the Company are sold or
                  otherwise transferred to parties that are not within a
                  "controlled group of corporations" (as defined in Code Section
                  1563) in which the Company is a member.

1.11     "Claimant" shall have the meaning set forth in Section 14.1.

1.12     "Code" shall mean the Internal Revenue Code of 1986, as it may be
         amended from time to time.

1.13     "Committee" shall mean the committee described in Article 12.

1.14     "Company" shall mean Western Digital Corporation, a Delaware
         corporation, and any successor to all or substantially all of the
         Company's assets or business.

1.15     "Company Common Stock" shall mean authorized and unissued shares or
         treasury shares of the Company's common stock.

1.16     "Company Contribution Account" shall mean (i) the sum of the
         Participant's Annual Company Contribution Amounts, plus (ii) amounts
         credited in accordance with all the applicable crediting provisions of
         this Plan that relate to the Participant's Company Contribution
         Account, less (iii) all distributions made to the Participant or his or
         her Beneficiary pursuant to this Plan that relate to the Participant's
         Company Contribution Account.

1.17     "Deduction Limitation" shall mean the following described limitation on
         a benefit that may otherwise be distributable pursuant to the
         provisions of this Plan. Except as otherwise provided, this limitation
         shall be applied to all distributions that are "subject to the
         Deduction Limitation" under this Plan. If an Employer determines in
         good faith prior to a Change in Control that there is a reasonable
         likelihood that any compensation paid to a Participant for a taxable
         year of the Employer would not be deductible by the Employer solely by
         reason of the limitation under Code Section 162(m), then to the extent
         deemed necessary by the Employer to ensure that the entire amount of
         any distribution to the Participant pursuant to this Plan prior to the
         Change in Control is deductible, the Employer may defer all or any
         portion of a distribution under this Plan. Any amounts deferred
         pursuant to this limitation shall continue to be credited/debited with
         additional amounts in accordance with Section 3.8 below, even if such
         amount is being paid out in installments. The amounts so deferred and
         amounts credited thereon shall be distributed to the Participant or his
         or her Beneficiary (in the event of the Participant's death) at the
         earliest possible date, as determined by the Employer in good faith, on
         which the deductibility of compensation paid or payable to the
         Participant for the taxable year of the Employer during which the
         distribution is made will not be limited by Section 162(m), or if
         earlier, the effective date of a Change in Control. Notwithstanding
         anything to the contrary in this

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WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

         Plan, the Deduction Limitation shall not apply to any distributions
         made after a Change in Control.

1.18     "Deferral Account" shall mean (i) the sum of all of a Participant's
         Annual Deferral Amounts, plus (ii) amounts credited in accordance with
         all the applicable crediting provisions of this Plan that relate to the
         Participant's Deferral Account, less (iii) all distributions made to
         the Participant or his or her Beneficiary pursuant to this Plan that
         relate to his or her Deferral Account.

1.19     "Director" shall mean any member of the board of directors of any
         Employer.

1.20     "Directors Fees" shall mean, with respect to a Plan Year, the annual
         fees paid by any Employer during the Plan Year, including retainer fees
         and meetings fees, as compensation for serving on the board of
         directors, and shall include Directors Fees (Stock Element), and after
         March 28, 2003, shall include Directors Fees (RSU). For purposes hereof
         Directors Fees (RSU) shall be deemed paid in the Plan Year in which
         such units vest.

1.21     "Directors Fees (RSU)" shall mean that portion of Directors Fees paid
         in cash upon the vesting of stock units granted to non-Employee
         Directors under the terms of the Directors Restricted Stock Unit Plan.

1.22     "Directors Fees (Stock Element)" shall mean that portion of Directors
         Fees paid in the form of shares of Company Common Stock and granted to
         non-Employee Directors on a mandatory or elective basis under the terms
         of the Stock-For-Fees Plan after January 8, 1997.

1.23     "Directors Restricted Stock Unit Plan" shall mean the Western Digital
         Non-Employee Directors Restricted Stock Unit Plan, originally adopted
         on March 28, 2003, as the same may be amended from time to time.

1.24     "Disability" shall mean a period of disability during which a
         Participant qualifies for permanent disability benefits under the
         Participant's Employer's long-term disability plan, or, if a
         Participant does not participate in such a plan, a period of disability
         during which the Participant would have qualified for permanent
         disability benefits under such a plan had the Participant been a
         participant in such a plan, as determined in the sole discretion of the
         Committee. If the Participant's Employer does not sponsor such a plan,
         or discontinues to sponsor such a plan, Disability shall be determined
         by the Committee in its sole discretion.

1.25     "Disability Benefit" shall mean the benefit set forth in Article 8.

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WESTERN DIGITAL CORPORATION
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Master Plan Document

1.26     "Election Form" shall mean the form established from time to time by
         the Committee that a Participant completes, signs and returns to the
         Committee to make an election under the Plan.

1.27     "Employee" shall mean a person who is an employee of any Employer.

1.28     "Employer(s)" shall mean the Company and/or any of its subsidiaries
         (now in existence or hereafter formed or acquired) that have been
         selected by the Board to participate in the Plan and have adopted the
         Plan as a sponsor.

1.29     "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
         as it may be amended from time to time.

1.30     "Exchange Act" shall mean the Securities Exchange Act of 1934, as
         amended.

1.31     "Executive Retention Plan" shall mean the Western Digital Executive
         Retention Plan, as the same may be amended from time to time.

1.32     "First Plan Year" shall mean the period beginning May 16, 1994 and
         ending December 31, 1994.

1.33     "Long-Term Incentive Plan" shall mean the Western Digital Corporation
         Long-Term Incentive Plan, as the same may be amended from time to time.

1.34     "Long-Term Retention Agreement " shall mean the one or more long-term
         retention agreements entered into between an Employee and the Company
         in or about December, 2002.

1.35     "Management Incentive Plan" shall mean the Western Digital Corporation
         Management Incentive Plan, as the same may be amended from time to
         time.

1.36     "Participant" shall mean any Employee or Director (i) who is selected
         to participate in the Plan, (ii) who elects to participate in the Plan,
         (iii) who signs a Plan Agreement, an Election Form and a Beneficiary
         Designation Form, (iv) whose signed Plan Agreement, Election Form and
         Beneficiary Designation Form are accepted by the Committee, (v) who
         commences participation in the Plan, and (vi) whose Plan Agreement has
         not terminated. A spouse or former spouse of a Participant shall not be
         treated as a Participant in the Plan or have an account balance under
         the Plan, even if he or she has an interest in the Participant's
         benefits under the Plan as a result of applicable law or property
         settlements resulting from legal separation or divorce.

1.37     "Plan" shall mean the Western Digital Corporation Deferred Compensation
         Plan, originally adopted effective May 16, 1994, previously amended and
         restated in its entirety effective

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Master Plan Document

         January 9, 1997, January 1, 1998, August 1, 2001, and July 1, 2002, and
         amended and restated in its entirety effective March 28, 2003, which
         shall be evidenced by this instrument and by each Plan Agreement, as
         they may be amended from time to time.

1.38     "Plan Agreement" shall mean a written agreement, as may be amended from
         time to time, which is entered into by and between an Employer and a
         Participant. Each Plan Agreement executed by a Participant and the
         Participant's Employer shall provide for the entire benefit to which
         such Participant is entitled under the Plan; should there be more than
         one Plan Agreement, the Plan Agreement bearing the latest date of
         acceptance by the Employer shall supersede all previous Plan Agreements
         in their entirety and shall govern such entitlement. The terms of any
         Plan Agreement may be different for any Participant, and any Plan
         Agreement may provide additional benefits not set forth in the Plan or
         limit the benefits otherwise provided under the Plan; provided,
         however, that any such additional benefits or benefit limitations must
         be agreed to by both the Employer and the Participant.

1.39     "Plan Year" shall, except for the First Plan Year, mean a period
         beginning on January 1 of each calendar year and continuing through
         December 31 of such calendar year.

1.40     "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
         Article 6.

1.41     "Profit Sharing Plan (Cash Element)" shall mean the portion of the
         Western Digital Corporation Profit Sharing Plan which, in accordance
         with its terms, pays benefits in cash.

1.42     "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
         Employee, severance from employment from all Employers for any reason
         other than a leave of absence, death or Disability, on or after the
         attainment of age fifty-five (55); and shall mean with respect to a
         Director who is not an Employee, severance of his or her directorships
         with all Employers on or after the later of (a) the attainment of age
         seventy (70), or (b) in the sole discretion of the Committee, an age
         later than age seventy (70). If a Participant is both an Employee and a
         Director, Retirement shall not occur until he or she Retires as both an
         Employee and a Director, which Retirement shall be deemed to be a
         Retirement as a Director; provided, however, that such a Participant
         may elect, at least three years prior to Retirement and in accordance
         with the policies and procedures established by the Committee, to
         Retire for purposes of this Plan at the time he or she Retires as an
         Employee, which Retirement shall be deemed to be a Retirement as an
         Employee. In this regard, a Participant shall be deemed to cease being
         employed by an Employer if and when the Employer employing such
         Participant ceases to be a majority owned subsidiary of the Company and
         the Board provides that such event shall be treated as a cessation of
         employment by all Employers.

1.43     "Retirement Benefit" shall mean the benefit set forth in Article 5.

1.44     "Short-Term Payout" shall mean the payout set forth in Section 4.1.

                                      -7-



WESTERN DIGITAL CORPORATION
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Master Plan Document

1.45     "Stock-For-Fees Plan" shall mean the Western Digital Corporation
         Non-Employee Directors Stock-For-Fees Plan, as the same may be amended
         from time to time.

1.46     "Termination Benefit" shall mean the benefit set forth in Article 7.

1.47     "Termination of Employment" shall mean the severing of employment with
         all Employers, or service as a Director of all Employers, voluntarily
         or involuntarily, for any reason other than Retirement, Disability,
         death or an authorized leave of absence. If a Participant is both an
         Employee and a Director, a Termination of Employment shall occur only
         upon the termination of the last position held; provided, however, that
         such a Participant may elect, at least three years before Termination
         of Employment and in accordance with the policies and procedures
         established by the Committee, to be treated for purposes of this Plan
         as having experienced a Termination of Employment at the time he or she
         ceases employment with an Employer as an Employee. In this regard, a
         Participant shall be deemed to cease being employed by an Employer if
         and when the Employer employing such Participant ceases to be a
         majority owned subsidiary of the Company and the Board provides that
         such event shall be treated as a cessation of employment by all
         Employers.

1.48     "Trust" shall mean one or more trusts established pursuant to that
         certain Master Trust Agreement, dated as of May 16, 1994 between the
         Company and the trustee named therein, as amended from time to time.

1.49     "Unforeseeable Financial Emergency" shall mean an unanticipated
         emergency that is caused by an event beyond the control of the
         Participant that would result in severe financial hardship to the
         Participant resulting from (i) a sudden and unexpected illness or
         accident of the Participant or a dependent of the Participant, (ii) a
         loss of the Participant's property due to casualty, or (iii) such other
         extraordinary and unforeseeable circumstances arising as a result of
         events beyond the control of the Participant, all as determined in the
         sole discretion of the Committee.

                                    ARTICLE 2
                       SELECTION, ENROLLMENT, ELIGIBILITY

2.1      SELECTION BY COMMITTEE. Participation in the Plan shall be limited to a
         select group of management and highly compensated Employees and
         Directors of the Employers, as determined by the Committee in its sole
         discretion. From that group, the Committee shall select, in its sole
         discretion, Employees and Directors to participate in the Plan.

2.2      ENROLLMENT REQUIREMENTS. As a condition to participation, for the First
         Plan Year, each selected Employee or Director shall complete, execute
         and return to the Committee any time prior to May 16, 1994, a Plan
         Agreement, an Election Form and a Beneficiary Designation Form.
         Individuals initially selected to participate after May 16, 1994 may

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Master Plan Document

         commence participation by completing, executing and returning to the
         Committee a Plan Agreement, an Election Form and a Beneficiary
         Designation Form, all within 30 days of selection. In addition, the
         Committee shall establish from time to time such other enrollment
         requirements as it determines in its sole discretion are necessary.

2.3      ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee or
         Director selected to participate in the Plan has met all enrollment
         requirements set forth in this Plan and required by the Committee,
         including returning all required documents to the Committee within the
         specified time period, that Employee or Director shall commence
         participation in the Plan on May 16, 1994, or, in the case of those
         selected for participation after that date, the May 1, or January 1
         immediately following the date in which the Employee or Director
         completes all enrollment requirements, provided that a Director who is
         elected or appointed other than at an annual stockholders meeting may
         commence participation on the date he or she joins the Board, subject
         to new elections for each succeeding Plan Year pursuant to Section 3.3.
         If an Employee or a Director fails to meet all such requirements within
         the period required, in accordance with Section 2.2, that Employee or
         Director shall not be eligible to participate in the Plan until the
         first day of the Plan Year following the delivery to and acceptance by
         the Committee of the required documents.

2.4      TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee
         determines in good faith that a Participant no longer qualifies as a
         member of a select group of management or highly compensated employees,
         as membership in such group is determined in accordance with Sections
         201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the
         right, in its sole discretion, to (i) terminate any deferral election
         the Participant has made for the remainder of the Plan Year in which
         the Participant's membership status changes, (ii) prevent the
         Participant from making future deferral elections and/or (iii)
         immediately distribute the Participant's then vested Account Balance as
         a Termination Benefit and terminate the Participant's participation in
         the Plan.

                                      -9-



WESTERN DIGITAL CORPORATION
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Master Plan Document

                                    ARTICLE 3

            DEFERRAL COMMITMENTS/COMPANY CONTRIBUTION/CREDITING/TAXES

3.1      MINIMUM DEFERRALS.

         (A)      BASE ANNUAL SALARY, ANNUAL BONUS AND DIRECTORS FEES. For each
                  Plan Year, a Participant may elect to defer, as his or her
                  Annual Deferral Amount, Base Annual Salary, Annual Bonus
                  and/or Directors Fees in the following minimum amounts for
                  each deferral elected:



    DEFERRAL                      MINIMUM AMOUNT
    --------                      --------------
                               
Base Annual Salary                    $2,000
Annual Bonus                          $2,000
Directors Fees                        $    0


                  If an election is made for less than stated minimum amounts,
                  or if no election is made, the amount deferred shall be zero.
                  The Committee may, (a) in the case of an Annual Bonus,
                  prescribe that the portion, if any, attributable to amounts
                  otherwise payable under a Long-Term Retention Agreement, the
                  Long Term Incentive Plan or the Executive Retention Plan be
                  subject to a separate deferral election; and (b) in the case
                  of Directors Fees prescribe that the portion, if any,
                  attributable to amounts otherwise payable under the Directors
                  Restricted Stock Unit Plan be subject to a separate deferral
                  election, in each case, with respect to the Minimum Amount
                  that may be deferred and/or the timing of the deferral
                  election.

         (b)      SHORT PLAN YEAR. Notwithstanding the foregoing, if a
                  Participant first becomes a Participant after the first day of
                  a Plan Year, or in the case of the First Plan Year of the
                  Plan, the minimum Base Annual Salary deferral shall be an
                  amount equal to the minimum set forth above, multiplied by a
                  fraction, the numerator of which is the number of complete
                  months remaining in the Plan Year and the denominator of which
                  is 12.

3.2      MAXIMUM DEFERRAL.

         (a)      BASE ANNUAL SALARY, ANNUAL BONUS AND DIRECTORS FEES. For each
                  Plan Year, a Participant may elect to defer, as his or her
                  Annual Deferral Amount, Base Annual Salary, Annual Bonus
                  and/or Directors Fees up to the following maximum percentages
                  for each deferral elected:

                                      -10-



WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document



       DEFERRAL                    MAXIMUM AMOUNT
       --------                    --------------
                                
Base Annual Salary                      100%
Annual Bonus                            100%
Directors Fees                          100%


         (b)      Notwithstanding the foregoing, if a Participant first becomes
                  a Participant after the first day of a Plan Year, or in the
                  case of the First Plan Year, the maximum Annual Deferral
                  Amount, with respect to Base Annual Salary, Annual Bonus and
                  Directors Fees shall be limited to the amount of compensation
                  not yet earned by the Participant as of the date the
                  Participant submits a Plan Agreement, an Election Form and a
                  Beneficiary Designation Form to the Committee for acceptance.

3.3      ELECTION TO DEFER; EFFECT OF ELECTION FORM.

         (a)      FIRST PLAN YEAR. In connection with a Participant's
                  commencement of participation in the Plan, the Participant
                  shall make an irrevocable deferral election for the Plan Year
                  in which the Participant commences participation in the Plan,
                  along with such other elections as the Committee deems
                  necessary or desirable under the Plan. For these elections to
                  be valid, the Election Form must be completed and signed by
                  the Participant, timely delivered to the Committee (in
                  accordance with Section 2.2 above) and accepted by the
                  Committee.

         (b)      SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an
                  irrevocable deferral election for that Plan Year, and such
                  other elections as the Committee deems necessary or desirable
                  under the Plan, shall be made by timely delivering to the
                  Committee, in accordance with its rules and procedures, before
                  the end of the Plan Year preceding the Plan Year for which the
                  election is made, a new Election Form; provided that any
                  deferral election in respect of Directors Fees for the 1997
                  Plan Year may be made on or before January 31, 1997, and, if
                  separate deferral terms are set by the Committee pursuant to
                  Section 3.1(a), elections with respect to amounts payable
                  under Long-Term Retention Agreements, the Long Term Incentive
                  Plan, the Executive Retention Plan or the Directors Restricted
                  Stock Unit Plan, as applicable, will be as prescribed by the
                  Committee. If no such Election Form is timely delivered for a
                  Plan Year, the Annual Deferral Amount shall be zero for that
                  Plan Year. Notwithstanding anything herein to the contrary, if
                  any grant under the Directors Restricted Stock Unit Plan
                  vests, pursuant to the terms of such plan, prior to four years
                  after the date of grant, any election and Election Form with
                  respect to such grant shall be disregarded.

3.4      WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the Base
         Annual Salary portion of the Annual Deferral Amount shall be withheld
         from each regularly scheduled

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WESTERN DIGITAL CORPORATION
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Master Plan Document

         Base Annual Salary payroll in equal amounts, as adjusted from time to
         time for increases and decreases in Base Annual Salary. The Annual
         Bonus and/or Directors Fees portion of the Annual Deferral Amount shall
         be withheld at the time the Annual Bonus or Directors Fees are or
         otherwise would be paid to the Participant, whether or not this occurs
         during the Plan Year itself.

3.5      ANNUAL COMPANY CONTRIBUTION AMOUNT. For each Plan Year, the Board, in
         its sole discretion, may, but is not required to, credit any amount it
         desires to any Participant's Company Contribution Account under this
         Plan, which amount shall be for that Participant the Annual Company
         Contribution Amount for that Plan Year. The amount so credited to a
         Participant may be smaller or larger than the amount credited to any
         other Participant, and the amount credited to any Participant for a
         Plan Year may be zero, even though one or more other Participants
         receive an Annual Company Contribution Amount for that Plan Year. The
         Annual Company Contribution Amount, if any, shall be credited as of the
         last day of the Plan Year. If a Participant is not employed by an
         Employer as of the last day of a Plan Year other than by reason of his
         or her Retirement or death while employed, the Annual Company
         Contribution Amount for that Plan Year shall be zero. Notwithstanding
         the foregoing, the Company shall credit to the Account Balances of
         Participants who are non-employee Directors an Annual Company
         Contribution Amount for the Plan Year in which the applicable deferral
         is made, the premium awarded under Section 7(b) of the Stock-For-Fees
         Plan (the "Stock Premium Award"), and the premium awarded under Section
         7(c) of the Stock-For-Fees Plan (the "Cash Premium Award," and
         collectively with the Stock Premium Award, "Premium Awards"), which
         amount shall be credited at such times as the Company shall determine.

3.6      INVESTMENT OF TRUST ASSETS. The Trustee of the Trust shall be
         authorized, upon written instructions received from the Committee or
         investment manager appointed by the Committee, to invest and reinvest
         the assets of the Trust in accordance with the applicable Trust
         Agreement, including the disposition of stock and reinvestment of the
         proceeds in one or more investment vehicles designated by the
         Committee.

3.7      VESTING.

         (a)      A Participant shall at all times be 100% vested in his or her
                  Deferral Account, except that, subject to Section 3.7(d),
                  below, amounts attributable to any Long-Term Retention
                  Agreement shall be subject to forfeiture in accordance with
                  the terms of such agreement.

         (b)      Except as otherwise provided in this Section 3.7, a
                  Participant shall be vested in his or her Company Contribution
                  Account in accordance with the provisions governing employer
                  contributions under the Company's qualified 401(k) plan.

                                      -12-



WESTERN DIGITAL CORPORATION
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Master Plan Document

         (c)      A Participant shall at all times be 100% vested in the portion
                  of his or her Deferral Account attributable to the Premium
                  Award(s).

         (d)      Notwithstanding anything to the contrary contained in this
                  Section 3.7, in the event of his or her Retirement, Disability
                  or a Change in Control, a Participant's Deferral Account and
                  Company Contribution Account shall immediately become 100%
                  vested (if it is not already vested in accordance with this
                  Section 3.7).

3.8      CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and subject
         to, the rules and procedures that are established from time to time by
         the Committee, in its sole discretion, amounts shall be credited or
         debited to a Participant's Account Balance in accordance with the
         following rules:

         (a)      ELECTION OF MEASUREMENT FUNDS. Except as otherwise provided in
                  Section 3.8 (d) or Section 3.8(e) below, a Participant, in
                  connection with his or her initial deferral election in
                  accordance with Section 3.3(a) above, shall elect, on the
                  Election Form, one or more Measurement Fund(s) (as described
                  in Section 3.8(c) below) to be used to determine the
                  additional amounts to be credited to his or her Account
                  Balance for the first day thereof in which the Participant
                  commences participation in the Plan and continuing thereafter
                  for each subsequent day in which the Participant participates
                  in the Plan, unless changed in accordance with the next
                  sentence. Except as otherwise provided in Section 3.8(d) or
                  Section 3.8(e) below, commencing with the first day that
                  follows the Participant's commencement of participation in the
                  Plan and continuing thereafter for each subsequent day in
                  which the Participant participates in the Plan, no later than
                  the prior business day, the Participant may (but is not
                  required to) elect, by submitting an Election Form to the
                  Committee that is accepted by the Committee, to add or delete
                  one or more Measurement Fund(s) to be used to determine the
                  additional amounts to be credited to his or her Account
                  Balance, or to change the portion of his or her Account
                  Balance allocated to each previously or newly elected
                  Measurement Fund; provided, however, that a Participant may
                  make no more than two (2) such elections each Plan Year. If an
                  election is made in accordance with the previous sentence, it
                  shall apply to the next day and continue thereafter for each
                  subsequent day in which the Participant participates in the
                  Plan, unless changed in accordance with the previous sentence.

         (b)      PROPORTIONATE ALLOCATION. In making any election described in
                  Section 3.8(a) above, the Participant shall specify on the
                  Election Form, in increments of five percentage points (5%),
                  the percentage of his or her Account Balance to be allocated
                  to a Measurement Fund (as if the Participant was making an
                  investment in

                                      -13-



WESTERN DIGITAL CORPORATION
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Master Plan Document

                  that Measurement Fund with that portion of his or her Account
                  Balance and Annual Deferral Amount).

         (c)      MEASUREMENT FUNDS. Except as otherwise provided in Section
                  3.8(d) or Section 3.8(e) below, for the purpose of crediting
                  additional amounts to his or her Account Balance, the
                  Participant may elect one or more measurement funds, based on
                  certain mutual funds, established by the Committee for such
                  purpose (the "Measurement Funds"). The Measurement Funds shall
                  include a "Declared Rate Fund" (described as a fund which is
                  credited with interest at a fixed rate declared as an annual
                  rate for each Plan Year by the Company prior to the beginning
                  of the Plan Year).

                  The Committee may, in its sole discretion, discontinue,
                  substitute or add a Measurement Fund. Each such action will
                  take effect as of the first day of the calendar quarter that
                  follows by thirty (30) days the day on which the Committee
                  gives Participants advance written notice of such change.

         (d)      MINIMUM PERCENTAGE FOR DECLARED RATE MEASUREMENT FUND.
                  Notwithstanding any provision of this Plan, other than Section
                  3.8(e) below, that may be construed to the contrary, effective
                  January 1, 1998, a Participant's Account Balance as of such
                  date shall be allocated to the Declared Rate Measurement Fund.
                  Except as otherwise provided in Section 3.8(e) below,
                  effective January 2, 1998, at all times during a Plan Year, a
                  Participant must allocate a minimum percentage of his or her
                  existing Account Balance and Annual Deferral Amount to the
                  Declared Rate Measurement Fund (the "Minimum Percentage"). The
                  Minimum Percentage for a Plan Year (i) must be fifty percent
                  (50%) for the 1998 Plan Year, (ii) must be determined by the
                  Committee, in its sole discretion, and announced prior to the
                  beginning of any other Plan Year, (iii) may be higher or lower
                  than the Minimum Percentage for any other Plan Year and (iv)
                  may be zero for any other Plan Year.

         (e)      COMPANY STOCK MEASUREMENT FUND FOR DIRECTORS FEES (STOCK
                  ELEMENT). Notwithstanding any provision of this Plan that may
                  be construed to the contrary, the portion of a Participant's
                  Deferral Account balance attributable to his or her deferral
                  of Directors Fees (Stock Element) and the portion of a
                  Participant's Company Contribution Account balance
                  attributable to the Stock Premium Award(s), as that term is
                  defined in Section 3.5 above, must be (i) deemed invested at
                  all times prior to distribution in the Company Stock
                  Measurement Fund and (ii) distributed, in the form of Company
                  Common Stock, as a lump sum at the time distribution to the
                  Participant or his or her Beneficiary(ies) is to commence. For
                  purposes of this Section 3.8(e), the Company Stock Measurement
                  Fund is described

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Master Plan Document

                  as a fund which shall be credited or debited with investment
                  results corresponding to the total return of Company Common
                  Stock.

         (f)      CREDITING OR DEBITING METHOD. The performance of each elected
                  Measurement Fund (either positive or negative) will be
                  determined by the Committee, in its reasonable discretion,
                  based on the performance of the Measurement Funds themselves.
                  A Participant's Account Balance shall be credited or debited
                  on a daily basis based on the performance of each Measurement
                  Fund selected by the Participant, as determined by the
                  Committee in its sole discretion, as though (i) a
                  Participant's Account Balance were invested in the Measurement
                  Fund(s) selected by the Participant, in the percentages
                  applicable to such calendar date, at the closing price on such
                  date; (ii) the portion of the Annual Deferral Amount that was
                  actually deferred during any calendar date were invested in
                  the Measurement Fund(s) selected by the Participant, in the
                  percentages applicable to such calendar date, no later than
                  the close of business on the third business day after the day
                  on which such amounts are actually deferred from the
                  Participant's Base Annual Salary through reductions in his or
                  her payroll, at the closing price on such date; and (iii) any
                  distribution made to a Participant that decreases such
                  Participant's Account Balance ceased being invested in the
                  Measurement Fund(s), in the percentages applicable to such
                  calendar date, no earlier than three business days prior to
                  the distribution, at the closing price on such date.

         (g)      NO ACTUAL INVESTMENT. Notwithstanding any other provision of
                  this Plan that may be interpreted to the contrary, the
                  Measurement Funds are to be used for measurement purposes
                  only, and a Participant's election of any such Measurement
                  Fund, the allocation to his or her Account Balance thereto,
                  the calculation of additional amounts and the crediting or
                  debiting of such amounts to a Participant's Account Balance
                  shall not be considered or construed in any manner as an
                  actual investment of his or her Account Balance in any such
                  Measurement Fund. In the event that the Company or the Trustee
                  (as that term is defined in the Trust), in its own discretion,
                  decides to invest funds in any or all of the Measurement
                  Funds, no Participant shall have any rights in or to such
                  investments themselves. Without limiting the foregoing, a
                  Participant's Account Balance shall at all times be a
                  bookkeeping entry only and shall not represent any investment
                  made on his or her behalf by the Company or the Trust; the
                  Participant shall at all times remain an unsecured creditor of
                  the Company.

3.9      FICA AND OTHER TAXES.

         (a)      ANNUAL DEFERRAL AMOUNTS. For each Plan Year in which an Annual
                  Deferral Amount is being withheld from a Participant, the
                  Participant's Employer(s) shall

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                  withhold from that portion of the Participant's Base Annual
                  Salary and Bonus that is not being deferred, in a manner
                  determined by the Employer(s), the Participant's share of FICA
                  and other employment taxes on such Annual Deferral Amount. If
                  necessary, the Committee may reduce the Annual Deferral Amount
                  in order to comply with this Section 3.9.

         (b)      ANNUAL COMPANY CONTRIBUTION AMOUNTS. When a participant
                  becomes vested in a portion of his or her Company Contribution
                  Account, the Participant's Employer(s) shall withhold from the
                  Participant's Base Annual Salary and/or Bonus that is not
                  deferred, in a manner determined by the Employer(s), the
                  Participant's share of FICA and other employment taxes. If
                  necessary, the Committee may reduce the vested portion of the
                  Participant's Company Contribution Account in order to comply
                  with this Section 3.9.

3.10     DISTRIBUTIONS. The Participant's Employer(s), or the trustee of the
         Trust, shall withhold from any payments made to a Participant under
         this Plan all federal, state and local income, employment and other
         taxes required to be withheld by the Employer(s), or the trustee of the
         Trust, in connection with such payments, in amounts and in a manner to
         be determined in the sole discretion of the Employer(s) and the trustee
         of the Trust.

                                    ARTICLE 4

   SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION

4.1      SHORT-TERM PAYOUT. In connection with each election to defer an Annual
         Deferral Amount, a Participant may irrevocably elect to receive a
         future "Short-Term Payout" from the Plan with respect to such Annual
         Deferral Amount. Subject to the Deduction Limitation, the Short-Term
         Payout shall be a lump sum payment in an amount that is equal to the
         Annual Deferral Amount plus amounts credited or debited in the manner
         provided in Section 3.9 above on that amount, determined at the time
         that the Short-Term Payout becomes payable (rather than the date of a
         Termination of Employment). Subject to the Deduction Limitation and the
         other terms and conditions of this Plan, each Short-Term Payout elected
         shall be paid within 60 days after the first day of any Plan Year
         designated by the Participant that is at least three Plan Years after
         the Plan Year in which the Annual Deferral Amount is actually deferred.
         Notwithstanding the foregoing, the Participant may irrevocably elect to
         defer the distribution of a Short-Term Payout to the first 60 days of
         another Plan Year designated by the Participant that is at least two
         Plan Years after the Plan Year in which such Short-Term Payout would
         otherwise be paid, provided such election is made no later than the
         first day of the Plan Year immediately preceding the Plan Year in which
         the Short-Term Payout would otherwise be paid.

4.2      OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM. Should an event occur
         that triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral
         Amount, plus amounts credited or

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         debited thereon, that is subject to a Short-Term Payout election under
         Section 4.1 shall not be paid in accordance with Section 4.1 but shall
         be paid in accordance with the other applicable Article.

4.3      WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES.
         If the Participant experiences an Unforeseeable Financial Emergency,
         the Participant may petition the Committee to (i) suspend any deferrals
         required to be made by a Participant and/or (ii) receive a partial or
         full payout from the Plan. The payout shall not exceed the lesser of
         the Participant's vested Account Balance, calculated as if such
         Participant were receiving a Termination Benefit, or the amount
         reasonably needed to satisfy the Unforeseeable Financial Emergency. If,
         subject to the sole discretion of the Committee, the petition for a
         suspension and/or payout is approved, suspension shall take effect upon
         the date of approval and any payout shall be made within 60 days of the
         date of approval. The payment of any amount under this Section 4.3
         shall not be subject to the Deduction Limitation.

4.4      WITHDRAWAL ELECTION. A Participant (or, after a Participant's death,
         his or her Beneficiary) may elect, at any time, to withdraw all of his
         or her vested Account Balance, calculated as if there had occurred a
         Termination of Employment as of the day of the election, less a
         withdrawal penalty equal to 10% of such amount (the net amount shall be
         referred to as the "Withdrawal Amount"). This election can be made at
         any time, before or after Retirement, Disability, death or Termination
         of Employment, and whether or not the Participant (or Beneficiary) is
         in the process of being paid pursuant to an installment payment
         schedule. If made before Retirement, Disability or death, a
         Participant's Withdrawal Amount shall be his or her Account Balance
         calculated as if there had occurred a Termination of Employment as of
         the day of the election. No partial withdrawals of the Withdrawal
         Amount shall be allowed. The Participant (or his or her Beneficiary)
         shall make this election by giving the Committee advance written notice
         of the election in a form determined from time to time by the
         Committee. The Participant (or his or her Beneficiary) shall be paid
         the Withdrawal Amount within 60 days of his or her election. Once the
         Withdrawal Amount is paid, the Participant's participation in the Plan
         shall terminate and the Participant shall not be eligible to
         participate in the Plan in the future. The payment of this Withdrawal
         Amount shall not be subject to the Deduction Limitation.

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                                    ARTICLE 5
                               RETIREMENT BENEFIT

5.1      RETIREMENT BENEFIT. Subject to the Deduction Limitation, a Participant
         who Retires shall receive, as a Retirement Benefit, his or her vested
         Account Balance.

5.2      PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his or
         her commencement of participation in the Plan, shall elect on an
         Election Form to receive the Retirement Benefit in a lump sum or
         pursuant to an Annual Installment Method of 5, 10, 15 or 20 years. The
         Participant may annually change his or her election to an allowable
         alternative payout period by submitting a new Election Form to the
         Committee, provided that any such Election Form is submitted at least 3
         years prior to the Participant's Retirement and is accepted by the
         Committee in its sole discretion. The Election Form most recently
         accepted by the Committee shall govern the payout of the Retirement
         Benefit. If a Participant does not make any election with respect to
         the payment of the Retirement Benefit, then such benefit shall be
         payable in a lump sum. The lump sum payment shall be made, or
         installment payments shall commence, no later than 60 days after the
         last day of the Plan Year in which the Participant Retires. Any payment
         made shall be subject to the Deduction Limitation.

5.3      DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies
         after Retirement but before the Retirement Benefit is paid in full, the
         Participant's unpaid Retirement Benefit payments shall continue and
         shall be paid to the Participant's Beneficiary (a) over the remaining
         number of years and in the same amounts as that benefit would have been
         paid to the Participant had the Participant survived, or (b) in a lump
         sum, if requested by the Beneficiary and allowed in the sole discretion
         of the Committee, that is equal to the Participant's unpaid remaining
         vested Account Balance.

                                    ARTICLE 6
                         PRE-RETIREMENT SURVIVOR BENEFIT

6.1      PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction Limitation,
         the Participant's Beneficiary shall receive a Pre-Retirement Survivor
         Benefit equal to the Participant's vested Account Balance if the
         Participant dies before he or she Retires, experiences a Termination of
         Employment or suffers a Disability.

6.2      PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant, in
         connection with his or her commencement of participation in the Plan,
         shall elect on an Election Form whether the Pre-Retirement Survivor
         Benefit shall be received by his or her Beneficiary in a lump sum or
         pursuant to an Annual Installment Method of 5, 10, 15 or 20 years. The
         Participant

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         may annually change this election to an allowable alternative payout
         period by submitting a new Election Form to the Committee, which form
         must be accepted by the Committee in its sole discretion. The Election
         Form most recently accepted by the Committee prior to the Participant's
         death shall govern the payout of the Participant's Pre-Retirement
         Survivor Benefit. If a Participant does not make any election with
         respect to the payment of the Pre-Retirement Survivor Benefit, then
         such benefit shall be paid in a lump sum. Despite the foregoing, if the
         Participant's vested Account Balance at the time of his or her death is
         less than $25,000, payment of the Pre-Retirement Survivor Benefit may
         be made, in the sole discretion of the Committee, in a lump sum or
         pursuant to an Annual Installment Method of not more than 5 years. The
         lump sum payment shall be made, or installment payments shall commence,
         no later than 60 days after the last day of the Plan Year in which the
         Committee is provided with proof that is satisfactory to the Committee
         of the Participant's death. Any payment made shall be subject to the
         Deduction Limitation.

                                    ARTICLE 7
                               TERMINATION BENEFIT

7.1      TERMINATION BENEFIT. Subject to the Deduction Limitation, the
         Participant shall receive a Termination Benefit, which shall be equal
         to the Participant's vested Account Balance if a Participant
         experiences a Termination of Employment prior to his or her Retirement,
         death or Disability.

7.2      PAYMENT OF TERMINATION BENEFIT. The Termination of Employment shall be
         paid in a lump sum within 60 days of the Termination of Employment.

                                    ARTICLE 8
                          DISABILITY WAIVER AND BENEFIT

8.1      DISABILITY WAIVER.

         (a)      WAIVER OF DEFERRAL. A Participant who is determined by the
                  Committee to be suffering from a Disability shall be excused
                  from fulfilling that portion of the Annual Deferral Amount
                  commitment that would otherwise have been withheld from a
                  Participant's Base Annual Salary, Annual Bonus and/or
                  Directors Fees for the Plan Year during which the Participant
                  first suffers a Disability. During the period of Disability,
                  the Participant shall not be allowed to make any additional
                  deferral elections, but will continue to be considered a
                  Participant for all other purposes of this Plan.

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         (b)      RETURN TO WORK. If a Participant returns to employment, or
                  service as a Director, with an Employer, after a Disability
                  ceases, the Participant may elect to defer an Annual Deferral
                  Amount for the Plan Year following his or her return to
                  employment or service and for every Plan Year thereafter while
                  a Participant in the Plan; provided such deferral elections
                  are otherwise allowed and an Election Form is delivered to and
                  accepted by the Committee for each such election in accordance
                  with Section 3.3 above.

8.2      CONTINUED ELIGIBILITY; DISABILITY BENEFIT. A Participant suffering a
         Disability shall, for benefit purposes under this Plan, continue to be
         considered to be employed, or in the service of an Employer as a
         Director, and shall be eligible for the benefits provided for in
         Articles 4, 5, 6 or 7 in accordance with the provisions of those
         Articles. Notwithstanding the above, the Committee shall have the right
         to, in its sole and absolute discretion and for purposes of this Plan
         only, and must in the case of a Participant who is otherwise eligible
         to Retire, deem the Participant to have experienced a Termination of
         Employment, or in the case of a Participant who is eligible to Retire,
         to have Retired, at any time (or in the case of a Participant who is
         eligible to Retire, as soon as practicable) after such Participant is
         determined to be suffering a Disability, in which case the Participant
         shall receive a Disability Benefit equal to his or her vested Account
         Balance at the time of the Committee's determination; provided,
         however, that should the Participant otherwise have been eligible to
         Retire, he or she shall be paid in accordance with Article 5. The
         Disability Benefit shall be paid in a lump sum within 60 days of the
         Committee's exercise of such right. Any payment made shall be subject
         to the Deduction Limitation.

                                    ARTICLE 9
                             BENEFICIARY DESIGNATION

9.1      BENEFICIARY. Each Participant shall have the right, at any time, to
         designate his or her Beneficiary(ies) (both primary as well as
         contingent) to receive any benefits payable under the Plan to a
         beneficiary upon the death of a Participant. The Beneficiary designated
         under this Plan may be the same as or different from the Beneficiary
         designation under any other plan of an Employer in which the
         Participant participates.

9.2      BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant shall
         designate his or her Beneficiary by completing and signing the
         Beneficiary Designation Form, and returning it to the Committee or its
         designated agent. A Participant shall have the right to change a
         Beneficiary by completing, signing and otherwise complying with the
         terms of the Beneficiary Designation Form and the Committee's rules and
         procedures, as in effect from time to time. If the Participant names
         someone other than his or her spouse as a

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         Beneficiary, a spousal consent, in the form designated by the
         Committee, must be signed by that Participant's spouse and returned to
         the Committee. Upon the acceptance by the Committee of a new
         Beneficiary Designation Form, all Beneficiary designations previously
         filed shall be canceled. The Committee shall be entitled to rely on the
         last Beneficiary Designation Form filed by the Participant and accepted
         by the Committee prior to his or her death.

9.3      ACKNOWLEDGMENT. No designation or change in designation of a
         Beneficiary shall be effective until received and acknowledged in
         writing by the Committee or its designated agent.

9.4      NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
         Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
         designated Beneficiaries predecease the Participant or die prior to
         complete distribution of the Participant's benefits, then the
         Participant's designated Beneficiary shall be deemed to be his or her
         surviving spouse. If the Participant has no surviving spouse, the
         benefits remaining under the Plan to be paid to a Beneficiary shall be
         payable to the executor or personal representative of the Participant's
         estate.

9.5      DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the
         proper Beneficiary to receive payments pursuant to this Plan, the
         Committee shall have the right, exercisable in its discretion, to cause
         the Participant's Employer to withhold such payments until this matter
         is resolved to the Committee's satisfaction.

9.6      DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
         Beneficiary shall fully and completely discharge all Employers and the
         Committee from all further obligations under this Plan with respect to
         the Participant, and that Participant's Plan Agreement shall terminate
         upon such full payment of benefits.

                                   ARTICLE 10
                                LEAVE OF ABSENCE

10.1     PAID LEAVE OF ABSENCE. If a Participant is authorized by the
         Participant's Employer for any reason to take a paid leave of absence
         from the employment of the Employer, the Participant shall continue to
         be considered employed by the Employer and the Annual Deferral Amount
         shall continue to be withheld during such paid leave of absence in
         accordance with Section 3.3.

10.2     UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the
         Participant's Employer for any reason to take an unpaid leave of
         absence from the employment of the Employer, the Participant shall
         continue to be considered employed by the Employer and the Participant

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         shall be excused from making deferrals until the earlier of the date
         the leave of absence expires or the Participant returns to a paid
         employment status. Upon such expiration or return, deferrals shall
         resume for the remaining portion of the Plan Year in which the
         expiration or return occurs, based on the deferral election, if any,
         made for that Plan Year. If no election was made for that Plan Year, no
         deferral shall be withheld.

                                   ARTICLE 11
                     TERMINATION, AMENDMENT OR MODIFICATION

11.1     TERMINATION. Although each Employer anticipates that it will continue
         the Plan for an indefinite period of time, there is no guarantee that
         any Employer will continue the Plan or will not terminate the Plan at
         any time in the future. Accordingly, each Employer reserves the right
         to discontinue its sponsorship of the Plan and/or to terminate the Plan
         at any time with respect to any or all of its participating Employees
         and Directors, by action of its board of directors. Upon the
         termination of the Plan with respect to any Employer, the Plan
         Agreements of the affected Participants who are employed by that
         Employer, or in the service of that Employer as Directors, shall
         terminate and their vested Account Balances, determined as if they had
         experienced a Termination of Employment on the date of Plan termination
         or, if Plan termination occurs after the date upon which a Participant
         was eligible to Retire, then with respect to that Participant as if he
         or she had Retired on the date of Plan termination, shall be paid to
         the Participants as follows: Prior to a Change in Control, if the Plan
         is terminated with respect to all of its Participants, an Employer
         shall have the right, in its sole discretion, and notwithstanding any
         elections made by the Participant, to pay such benefits in a lump sum
         or pursuant to an Annual Installment Method of up to 15 years, with
         amounts credited and debited during the installment period as provided
         herein. If the Plan is terminated with respect to less than all of its
         Participants, an Employer shall be required to pay such benefits in a
         lump sum. After a Change in Control, the Employer shall be required to
         pay such benefits in a lump sum. The termination of the Plan shall not
         adversely affect any Participant or Beneficiary who has become entitled
         to the payment of any benefits under the Plan as of the date of
         termination; provided however, that the Employer shall have the right
         to accelerate installment payments without a premium or prepayment
         penalty by paying the vested Account Balance in a lump sum or pursuant
         to an Annual Installment Method using fewer years (provided that the
         present value of all payments that will have been received by a
         Participant at any given point of time under the different payment
         schedule shall equal or exceed the present value of all payments that
         would have been received at that point in time under the original
         payment schedule).

11.2     AMENDMENT. Any Employer may, at any time, amend or modify the Plan in
         whole or in part with respect to that Employer by the action of its
         board of directors; provided,

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         however, that: (i) no amendment or modification shall be effective to
         decrease or restrict the value of a Participant's vested Account
         Balance in existence at the time the amendment or modification is made,
         calculated as if the Participant had experienced a Termination of
         Employment as of the effective date of the amendment or modification
         or, if the amendment or modification occurs after the date upon which
         the Participant was eligible to Retire, the Participant had Retired as
         of the effective date of the amendment or modification, and (ii) no
         amendment or modification of this Section 11.2 of the Plan shall be
         effective. The amendment or modification of the Plan shall not affect
         any Participant or Beneficiary who has become entitled to the payment
         of benefits under the Plan as of the date of the amendment or
         modification; provided, however, that the Employer shall have the right
         to accelerate installment payments by paying the vested Account Balance
         in a lump sum or pursuant to an Annual Installment Method using fewer
         years (provided that the present value of all payments that will have
         been received by a Participant at any given point of time under the
         different payment schedule shall equal or exceed the present value of
         all payments that would have been received at that point in time under
         the original payment schedule).

11.3     PLAN AGREEMENT. Despite the provisions of Sections 11.1 and 11.2 above,
         if a Participant's Plan Agreement contains benefits or limitations that
         are not in this Plan document, the Employer may only amend or terminate
         such provisions with the consent of the Participant.

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11.4     EFFECT OF PAYMENT. The full payment of the applicable benefit under
         Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
         obligations to a Participant and his or her designated Beneficiaries
         under this Plan and the Participant's Plan Agreement shall terminate.

                                   ARTICLE 12
                                 ADMINISTRATION

12.1     COMMITTEE DUTIES. This Plan shall be administered by a Committee which
         shall consist of the Board, or such committee as the Board shall
         appoint. Members of the Committee may be Participants under this Plan.
         The Committee shall also have the discretion and authority to (i) make,
         amend, interpret, and enforce all appropriate rules and regulations for
         the administration of this Plan and (ii) decide or resolve any and all
         questions including interpretations of this Plan, as may arise in
         connection with the Plan. Any individual serving on the Committee who
         is a Participant shall not vote or act on any matter relating solely to
         himself or herself. When making a determination or calculation, the
         Committee shall be entitled to rely on information furnished by a
         Participant or the Company.

12.2     AGENTS. In the administration of this Plan, the Committee may, from
         time to time, employ agents and delegate to them such administrative
         duties as it sees fit (including acting through a duly appointed
         representative) and may from time to time consult with counsel who may
         be counsel to any Employer.

12.3     BINDING EFFECT OF DECISIONS. The decision or action of the
         Administrator with respect to any question arising out of or in
         connection with the administration, interpretation and application of
         the Plan and the rules and regulations promulgated hereunder shall be
         final and conclusive and binding upon all persons having any interest
         in the Plan.

12.4     INDEMNITY OF COMMITTEE. All Employers shall indemnify and hold harmless
         the members of the Committee, any Employee to whom the duties of the
         Committee may be delegated, and the Administrator against any and all
         claims, losses, damages, expenses or liabilities arising from any
         action or failure to act with respect to this Plan, except in the case
         of willful misconduct by the Committee, any of its members, any such
         Employee or the Administrator.

12.5     EMPLOYER INFORMATION. To enable the Committee and/or Administrator to
         perform its functions, the Company and each Employer shall supply full
         and timely information to the Committee and/or Administrator, as the
         case may be, on all matters relating to the compensation of its
         Participants, the date and circumstances of the Retirement, Disability,
         death or Termination of Employment of its Participants, and such other
         pertinent information as the Committee or Administrator may reasonably
         require.

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                                   ARTICLE 13
                          OTHER BENEFITS AND AGREEMENTS

13.1     COORDINATION WITH OTHER BENEFITS. The benefits provided for a
         Participant and Participant's Beneficiary under the Plan are in
         addition to any other benefits available to such Participant under any
         other plan or program for employees of the Participant's Employer. The
         Plan shall supplement and shall not supersede, modify or amend any
         other such plan or program except as may otherwise be expressly
         provided.

                                   ARTICLE 14
                                CLAIMS PROCEDURES

14.1     PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
         Participant (such Participant or Beneficiary being referred to below as
         a "Claimant") may deliver to the Committee a written claim for a
         determination with respect to the amounts distributable to such
         Claimant from the Plan. If such a claim relates to the contents of a
         notice received by the Claimant, the claim must be made within 60 days
         after such notice was received by the Claimant. All other claims must
         be made within 180 days of the date on which the event that caused the
         claim to arise occurred. The claim must state with particularity the
         determination desired by the Claimant.

14.2     NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
         claim within a reasonable time, and shall notify the Claimant in
         writing:

         (a)      that the Claimant's requested determination has been made, and
                  that the claim has been allowed in full; or

         (b)      that the Committee has reached a conclusion contrary, in whole
                  or in part, to the Claimant's requested determination, and
                  such notice must set forth in a manner calculated to be
                  understood by the Claimant:

                  (i)      the specific reason(s) for the denial of the claim,
                           or any part of it;

                  (ii)     specific reference(s) to pertinent provisions of the
                           Plan upon which such denial was based;

                  (iii)    a description of any additional material or
                           information necessary for the Claimant to perfect the
                           claim, and an explanation of why such material or
                           information is necessary; and

                  (iv)     an explanation of the claim review procedure set
                           forth in Section 14.3 below.

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14.3     REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from
         the Committee that a claim has been denied, in whole or in part, a
         Claimant (or the Claimant's duly authorized representative) may file
         with the Committee a written request for a review of the denial of the
         claim. Thereafter, but not later than 30 days after the review
         procedure began, the Claimant (or the Claimant's duly authorized
         representative):

         (a)      may review pertinent documents;

         (b)      may submit written comments or other documents; and/or

         (c)      may request a hearing, which the Committee, in its sole
                  discretion, may grant.

14.4     DECISION ON REVIEW. The Committee shall render its decision on review
         promptly, and not later than 60 days after the filing of a written
         request for review of the denial, unless a hearing is held or other
         special circumstances require additional time, in which case the
         Committee's decision must be rendered within 120 days after such date.
         Such decision must be written in a manner calculated to be understood
         by the Claimant, and it must contain:

         (a)      specific reasons for the decision;

         (b)      specific reference(s) to the pertinent Plan provisions upon
                  which the decision was based; and

         (c)      such other matters as the Committee deems relevant.

14.5     LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
         this Article 14 is a mandatory prerequisite to a Claimant's right to
         commence any legal action with respect to any claim for benefits under
         this Plan.

                                   ARTICLE 15
                                      TRUST

15.1     ESTABLISHMENT OF THE TRUST. The Company shall establish the Trust, and
         each Employer shall at least annually transfer over to the Trust such
         assets as the Employer determines, in its sole discretion, are
         necessary to provide, on a present value basis, for its respective
         future liabilities created with respect to the Annual Deferral Amounts
         and Annual Company Contribution Amounts for such Employer's
         Participants for all periods prior to the transfer, as well as any
         debits and credits to the Participants' Account Balances for all
         periods prior to the transfer, taking into consideration the value of
         the assets in the trust at the time of the transfer.

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15.2     INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the Plan
         and the Plan Agreement shall govern the rights of a Participant to
         receive distributions pursuant to the Plan. The provisions of the Trust
         shall govern the rights of the Employers, Participants and the
         creditors of the Employers to the assets transferred to the Trust. Each
         Employer shall at all times remain liable to carry out its obligations
         under the Plan.

15.3     DISTRIBUTIONS FROM THE TRUST. Each Employer's obligations under the
         Plan may be satisfied with Trust assets distributed pursuant to the
         terms of the Trust, and any such distribution shall reduce the
         Employer's obligations under this Plan.

                                   ARTICLE 16
                                  MISCELLANEOUS

16.1     STATUS OF PLAN. The Plan is intended to be a plan that is not qualified
         within the meaning of Code Section 401(a) and that "is unfunded and is
         maintained by an employer primarily for the purpose of providing
         deferred compensation for a select group of management or highly
         compensated employee" within the meaning of ERISA Sections 201(2),
         301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted
         to the extent possible in a manner consistent with that intent.

16.2     UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
         heirs, successors and assigns shall have no legal or equitable rights,
         interests or claims in any property or assets of an Employer. For
         purposes of the payment of benefits under this Plan, any and all of an
         Employer's assets shall be, and remain, the general, unpledged
         unrestricted assets of the Employer. An Employer's obligation under the
         Plan shall be merely that of an unfunded and unsecured promise to pay
         money in the future.

16.3     EMPLOYER'S LIABILITY. An Employer's liability for the payment of
         benefits shall be defined only by the Plan and the Plan Agreement, as
         entered into between the Employer and a Participant. An Employer shall
         have no obligation to a Participant under the Plan except as expressly
         provided in the Plan and his or her Plan Agreement.

16.4     NONASSIGNABILITY. Neither a Participant nor any other person shall have
         any right to commute, sell, assign, transfer, pledge, anticipate,
         mortgage or otherwise encumber, transfer, hypothecate, alienate or
         convey in advance of actual receipt, the amounts, if any, payable
         hereunder, or any part thereof, which are, and all rights to which are
         expressly declared to be, unassignable and non-transferable. No part of
         the amounts payable shall, prior to actual payment, be subject to
         seizure, attachment, garnishment or sequestration for the payment of
         any debts, judgments, alimony or separate maintenance owed by a
         Participant or any other person, be transferable by operation of law in
         the event of a

                                      -27-



WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

         Participant's or any other person's bankruptcy or insolvency or be
         transferable to a spouse as a result of a property settlement or
         otherwise.

16.5     NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
         shall not be deemed to constitute a contract of employment between any
         Employer and the Participant. Such employment is hereby acknowledged to
         be an "at will" employment relationship that can be terminated at any
         time for any reason, or no reason, with or without cause, and with or
         without notice, unless expressly provided in a written employment
         agreement. Nothing in this Plan shall be deemed to give a Participant
         the right to be retained in the service of any Employer, either as an
         Employee or a Director, or to interfere with the right of any Employer
         to discipline or discharge the Participant at any time.

16.6     FURNISHING INFORMATION. A Participant or his or her Beneficiary will
         cooperate with the Committee by furnishing any and all information
         requested by the Committee and take such other actions as may be
         requested in order to facilitate the administration of the Plan and the
         payments of benefits hereunder, including but not limited to taking
         such physical examinations as the Committee may deem necessary.

16.7     TERMS. Whenever any words are used herein in the masculine, they shall
         be construed as though they were in the feminine in all cases where
         they would so apply; and whenever any words are used herein in the
         singular or in the plural, they shall be construed as though they were
         used in the plural or the singular, as the case may be, in all cases
         where they would so apply.

16.8     CAPTIONS. The captions of the articles, sections and paragraphs of this
         Plan are for convenience only and shall not control or affect the
         meaning or construction of any of its provisions.

16.9     GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
         construed and interpreted according to the internal laws of the State
         of California without regard to its conflicts of laws principles.

16.10    NOTICE. Any notice or filing required or permitted to be given to the
         Committee under this Plan shall be sufficient if in writing and
         hand-delivered, or sent by registered or certified mail, to the address
         below:

                              Deferred Compensation Plan Committee
                              Western Digital Corporation
                              20511 Lake Forest Drive
                              Lake Forest, CA 92630

                                      -28-


WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

         Such notice shall be deemed given as of the date of delivery or, if
         delivery is made by mail, as of the date shown on the postmark on the
         receipt for registration or certification.

         Any notice or filing required or permitted to be given to a Participant
         under this Plan shall be sufficient if in writing and hand-delivered,
         or sent by mail, to the last known address of the Participant.

16.11    SUCCESSORS. The provisions of this Plan shall bind and inure to the
         benefit of the Participant's Employer and its successors and assigns
         and the Participant and the Participant's designated Beneficiaries.

16.12    SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse
         of a Participant who has predeceased the Participant shall
         automatically pass to the Participant and shall not be transferable by
         such spouse in any manner, including but not limited to such spouse's
         will, nor shall such interest pass under the laws of intestate
         succession.

16.13    VALIDITY. In case any provision of this Plan shall be illegal or
         invalid for any reason, said illegality or invalidity shall not affect
         the remaining parts hereof, but this Plan shall be construed and
         enforced as if such illegal or invalid provision had never been
         inserted herein.

16.14    INCOMPETENT. If the Committee determines in its discretion that a
         benefit under this Plan is to be paid to a minor, a person declared
         incompetent or to a person incapable of handling the disposition of
         that person's property, the Committee may direct payment of such
         benefit to the guardian, legal representative or person having the care
         and custody of such minor, incompetent or incapable person. The
         Committee may require proof of minority, incompetence, incapacity or
         guardianship, as it may deem appropriate prior to distribution of the
         benefit. Any payment of a benefit shall be a payment for the account of
         the Participant and the Participant's Beneficiary, as the case may be,
         and shall be a complete discharge of any liability under the Plan for
         such payment amount.

16.15    COURT ORDER. The Committee is authorized to make any payments directed
         by court order in any action in which the Plan or the Committee has
         been named as a party. In addition, if a court determines that a spouse
         or former spouse of a Participant has an interest in the Participant's
         benefits under the Plan in connection with a property settlement or
         otherwise, the Committee, in its sole discretion, shall have the right,
         notwithstanding any election made by a Participant, to immediately
         distribute the spouse's or former spouse's interest in the
         Participant's benefits under the Plan to that spouse or former spouse.

                                      -29-



WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

16.16    DISTRIBUTION IN THE EVENT OF TAXATION.

         (a)      IN GENERAL. If, for any reason, all or any portion of a
                  Participant's benefits under this Plan becomes taxable to the
                  Participant prior to receipt, a Participant may petition the
                  Committee before a Change in Control, or the trustee of the
                  Trust after a Change in Control, for a distribution of that
                  portion of his or her benefit that has become taxable. Upon
                  the grant of such a petition, which grant shall not be
                  unreasonably withheld (and, after a Change in Control, shall
                  be granted), a Participant's Employer shall distribute to the
                  Participant immediately available funds in an amount equal to
                  the taxable portion of his or her benefit (which amount shall
                  not exceed a Participant's unpaid vested Account Balance under
                  the Plan). If the petition is granted, the tax liability
                  distribution shall be made within 90 days of the date when the
                  Participant's petition is granted. Such a distribution shall
                  affect and reduce the benefits to be paid under this Plan.

         (b)      TRUST. If the Trust terminates in accordance with Section
                  3.6(e) of the Trust and benefits are distributed from the
                  Trust to a Participant in accordance with that Section, the
                  Participant's benefits under this Plan shall be reduced to the
                  extent of such distributions.

16.17    INSURANCE. The Employers, on their own behalf or on behalf of the
         trustee of the Trust, and, in their sole discretion, may apply for and
         procure insurance on the life of the Participant, in such amounts and
         in such forms as the Trust may choose. The Employers or the trustee of
         the Trust, as the case may be, shall be the sole owner and beneficiary
         of any such insurance. The Participant shall have no interest
         whatsoever in any such policy or policies, and at the request of the
         Employers shall submit to medical examinations and supply such
         information and execute such documents as may be required by the
         insurance company or companies to whom the Employers have applied for
         insurance.

16.18    LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company and
         each Employer is aware that upon the occurrence of a Change in Control,
         the Board or the board of directors of a Participant's Employer (which
         might then be composed of new members) or a shareholder of the Company
         or the Participant's Employer, or of any successor corporation might
         then cause or attempt to cause the Company, the Participant's Employer
         or such successor to refuse to comply with its obligations under the
         Plan and might cause or attempt to cause the Company or the
         Participant's Employer to institute, or may institute, litigation
         seeking to deny Participants the benefits intended under the Plan. In
         these circumstances, the purpose of the Plan could be frustrated.
         Accordingly, if, following a Change in Control, it should appear to any
         Participant that the Company, the Participant's Employer or any
         successor corporation has failed to comply with any of its obligations
         under the Plan or any agreement thereunder or, if the Company, such
         Employer or any

                                      -30-



WESTERN DIGITAL CORPORATION
Deferred Compensation Plan
Master Plan Document

         other person takes any action to declare the Plan void or unenforceable
         or institutes any litigation or other legal action designed to deny,
         diminish or to recover from any Participant the benefits intended to be
         provided, then the Company and the Participant's Employer irrevocably
         authorize such Participant to retain counsel of his or her choice at
         the expense of the Company and the Participant's Employer (who shall be
         jointly and severally liable) to represent such Participant in
         connection with the initiation or defense of any litigation or other
         legal action, whether by or against the Company, the Participant's
         Employer or any director, officer, shareholder or other person
         affiliated with the Company, the Participant's Employer or any
         successor thereto in any jurisdiction.

         IN WITNESS WHEREOF, the Company has signed this Plan document as of
March 28, 2003.

                                    "Company"

                                    Western Digital Corporation, a Delaware
                                     corporation

                                    By:       /s/ Raymond M. Bukaty
                                        ----------------------------------

                                    Title: Vice President, General Counsel
                                           and Secretary

                                      -31-



                                                                   EXHIBIT 10.11

Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                                TABLE OF CONTENTS
                                                                                                                
ARTICLE 1      Definition...................................................................................        1

ARTICLE 2      Selection, Enrollment and Eligibility........................................................        5
     2.1       Selection by Committee.......................................................................        5
     2.2       Enrollment Requirements......................................................................        5
     2.3       Eligibility; Commencement of Participation...................................................        6

ARTICLE 3      Vesting; Account Balance.....................................................................        6
     3.1       Vesting in Change in Control Benefit.........................................................        6
     3.2       Forfeiture...................................................................................        6
     3.3       Account Balance..............................................................................        7

ARTICLE 4      Benefits.....................................................................................        7
     4.1       Change in Control Benefit....................................................................        7
     4.2       Employer Benefit.............................................................................        8
     4.3       Withholding and Payroll Taxes................................................................        8

ARTICLE 5      Beneficiary..................................................................................        8
     5.1       Beneficiary..................................................................................        8
     5.2       Beneficiary Designation; Change; Spousal Consent.............................................        8
     5.3       Acknowledgment...............................................................................        9
     5.4       No Beneficiary Designation...................................................................        9
     5.5       Doubt as to Beneficiary......................................................................        9
     5.6       Discharge of Obligations.....................................................................        9

ARTICLE 6      Termination, Amendment or Modification of the Plan...........................................        9
     6.1       Termination, Amendment or Modification Prior to One Year Before Change in Control............        9
     6.2       Termination, Amendment or Modification Within One Year Before Change of Control or
               Following Change in Control..................................................................       10
     6.3       Termination of Plan Agreement................................................................       10

ARTICLE 7      Other Benefits and Agreements................................................................       10
     7.1       Coordination with Other Benefits.............................................................       10

ARTICLE 8      Trust........................................................................................       10
     8.1       Establishment of the Trust; Premiums.........................................................       10
     8.2       Interrelationship of the Plan and the Trust..................................................       11



                                       i



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                                                                                                                
     8.3       Accounts.....................................................................................       11

ARTICLE 9      Insurance Policies...........................................................................       12
     9.1       Policies.....................................................................................       12
     9.2       Documents Required by Insurer................................................................       12

ARTICLE 10     Administration...............................................................................       12
     10.1      Committee Duties.............................................................................       12
     10.2      Agents.......................................................................................       13
     10.3      Binding Effect of Decisions..................................................................       13
     10.4      Indemnity of Committee.......................................................................       13
     10.5      Employer Information.........................................................................       13

ARTICLE 11     Claims Procedures............................................................................       13
     11.1      Presentation of Claim........................................................................       13
     11.2      Notification of Decision.....................................................................       14
     11.3      Review of a Denied Claim.....................................................................       14
     11.4      Decision on Review...........................................................................       14
     11.5      Legal Action.................................................................................       15

ARTICLE 12     Miscellaneous................................................................................       15
     12.1      Unsecured General Creditor...................................................................       15
     12.2      Employer's Liability.........................................................................       15
     12.3      Nonassignability.............................................................................       15
     12.4      Not a Contract of Employment.................................................................       16
     12.5      Furnishing Information.......................................................................       16
     12.6      Terms........................................................................................       16
     12.7      Captions.....................................................................................       16
     12.8      Governing Law................................................................................       16
     12.9      Validity.....................................................................................       16
     12.10     Notice.......................................................................................       16
     12.11     Successors...................................................................................       17
     12.12     Spouse's Interest............................................................................       17
     12.13     Incompetent..................................................................................       17
     12.14     Distribution in the Event of Taxation........................................................       17



                                       ii



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                           WESTERN DIGITAL CORPORATION

                              EXECUTIVE BONUS PLAN

                AS AMENDED AND RESTATED EFFECTIVE MARCH 28, 2003

                                     PURPOSE

                  The purpose of this Plan is to provide specified benefits to a
select group of management and highly compensated employees who may contribute
materially to the continued growth, development and future business success of
Western Digital Corporation, a Delaware corporation, and its subsidiaries. The
Plan is intended to constitute a bonus arrangement and fall outside the scope
and jurisdiction of the Employee Retirement Income Security Act of 1974.

                                    ARTICLE 1

                                   DEFINITIONS

                  For purposes hereof, unless otherwise clearly apparent from
the context, the following phrases or term shall have the following indicated
meaning:

1.1               "Administrative Account" shall mean an account established in
                  accordance with Section 8.3(a)(ii) below.

1.2               "Beneficiary" shall mean one or more persons, trusts, estates
                  or other entities, designated in accordance with Article 5
                  below, that are entitled to receive benefits under this Plan
                  upon the death of a Participant.

1.3               "Beneficiary Designation Form" shall mean the form established
                  from time to time by the Committee that a Participant
                  completes, signs and returns to the Committee to designate one
                  or more Beneficiaries.

1.4               "Board" shall mean the Board of Directors of the Company.

1.5               "Change of Control" means and shall be deemed to occur if any
                  of the following events occur:

                  (a)      Any person (other than other than the Company or any
                           subsidiary thereof or any employee benefit plan of
                           the Company or any subsidiary thereof, or any
                           underwriter in connection with a firm commitment
                           public offering of the Company's common stock), alone
                           or together with its affiliates and

                                       1



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                           associates, including any group of persons which is
                           deemed a "person" under Section 13(d) (3) of the
                           Exchange Act, becomes the beneficial owner (as such
                           term is defined in Rule 13d-3 of the Exchange Act,
                           except that a person shall also be deemed the
                           beneficial owner of all securities which such person
                           may have a right to acquire, whether or not such
                           right is presently exercisable), directly or
                           indirectly, of thirty-three and one-third percent or
                           more of:

                           (i)      the then-outstanding shares of the Company's
                                    common stock or

                           (ii)     securities representing thirty-three and
                                    one-third percent or more of the combined
                                    voting power of the Company's then
                                    outstanding voting securities;

                  (b)      A change, during any period of two consecutive years,
                           of a majority of the Board of the Company as
                           constituted as of the beginning of such period,
                           unless the election, or nomination for election by
                           the Company's stockholders, of each director who was
                           not a director at the beginning of such period was
                           approved by vote of at least two-thirds of the
                           Incumbent Directors then in office (for purposes
                           hereof, "Incumbent Directors" shall consist of the
                           directors holding office as of the effective date of
                           this Plan and any person becoming a director
                           subsequent to such date whose election, or nomination
                           for election by the Company's stockholders, is
                           approved by a vote of at least a majority of the
                           Incumbent Directors then in office);

                  (c)      Consummation of any merger, consolidation,
                           reorganization or other extraordinary transactions
                           (or series of related transactions) involving the
                           Company which results in the stockholders of the
                           Company having power to vote in the ordinary election
                           of directors immediately prior to such transaction
                           (or series of related transactions) failing to
                           beneficially own at least a majority of the
                           securities of the Company having the power to vote in
                           the ordinary election of directors which are
                           outstanding after giving effect to such transaction
                           (or series of related transactions);

                  (d)      The stockholders of the Company approve a plan of
                           complete liquidation of the Company or the sale of
                           substantially all of the assets of the Company;

                  (e)      Substantially all of the assets of the Company are
                           sold or otherwise transferred to parties that are not
                           within a "controlled group of

                                       2



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                           corporations" (as defined in Section 1563 of the
                           Code) in which the Company is a member;

                  (f)      The Company or any other Employer voluntarily files a
                           petition for bankruptcy under federal bankruptcy law,
                           or an involuntary bankruptcy petition is filed
                           against any Employer under federal bankruptcy law,
                           which involuntary petition is not dismissed within
                           120 days of the filing;

                  (g)      The Company or any other Employer makes a general
                           assignment for the benefit of creditors; or

                  (h)      The Company or any other Employer seeks or consents
                           to the appointment of a trustee, receiver, liquidator
                           or similar person.

                           With respect to Sections 1.5(f), (g) and (h) above,
                           if the event described occurs only with respect to
                           one or more Employers (other than the Company) and
                           not to the Company, such event shall be a "Change in
                           Control" only with respect to the Participants of
                           that Employer or those Employers.

1.6               "Change in Control Benefit" shall mean the benefit set forth
                  in Section 4.1 below.

1.7               "Claimant" shall have the meaning set forth in Section 11.1
                  below.

1.8               "Code" shall mean the Internal Revenue Code of 1986, as
                  amended from time to time.

1.9               "Committee" shall mean the administrative committee appointed
                  to manage and administer the Plan in accordance with the
                  provisions of Article 10 below.

1.10              "Company" shall mean Western Digital Corporation, a Delaware
                  corporation.

1.11              "Disability" shall mean a period of disability during which a
                  Participant qualifies for benefits under the Participant's
                  Employer's long-term disability plan (if the Participant
                  participates in such a plan), or, if a Participant does not
                  participate in such a plan, a period of disability during
                  which the Participant would have qualified for benefits under
                  the Employer's long-term disability plan had the Participant
                  been a participant in such a plan (determined in the sole
                  discretion of the Committee), or, if there is no such plan, as
                  determined in the sole discretion of the Committee.

                                       3



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

1.12              "Employer" shall mean the Company and/or any of its
                  subsidiaries that have been selected by the Board to
                  participate in the Plan.

1.13              "Employer Benefit" shall mean the benefit set forth in Section
                  4.2 below.

1.14              "Forfeiture" shall mean a forfeiture of a Participant's rights
                  to benefits under this Plan as set forth in Section 3.2 below.

1.15              "Insurer" shall mean the insurance company or companies that
                  issue one or more Policies.

1.16              "Participant" shall mean any employee of an Employer

                  (a)      who is selected to participate in the Plan,

                  (b)      who elects to participate in the Plan,

                  (c)      who signs a Plan Agreement and a Beneficiary
                           Designation Form,

                  (d)      whose signed Plan Agreement and Beneficiary
                           Designation Form are accepted by the Committee, and

                  (e)      whose Plan Agreement has not terminated.

1.17              "Participant's Account" shall mean an account established in
                  accordance with Section 8.3(a)(i) below.

1.18              "Plan" shall mean the Western Digital Executive Bonus Plan,
                  which is defined by this instrument and by each Plan
                  Agreement, all as may be amended from time to time.

1.19              "Plan Agreement" shall mean a written agreement, as may be
                  amended from time to time, which is entered into by and
                  between an Employer and a Participant. Each Plan Agreement
                  executed by a Participant shall provide for the entire benefit
                  to which such Participant is entitled to under the Plan, and
                  the Plan Agreement bearing the latest date of acceptance by
                  the Committee shall govern such entitlement.

1.20              "Plan Year" shall, for the first Plan Year, begin on May 16,
                  1994, and end on December 31, 1994. For each Plan Year
                  thereafter, the Plan Year shall begin on January 1 of each
                  year and continue through December 31 of that year.

                                       4



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

1.21              "Policy" or "Policies" shall mean the policy or policies
                  issued in the name of the Trustee in accordance with the terms
                  and conditions of this Plan and each respective Plan
                  Agreement.

1.22              "Reserve Account" shall mean an account established in
                  accordance with Section 8.3(a)(iii) below.

1.23              "Retirement," "Retires" or "Retired" shall mean a Participant
                  ceasing to be employed by all Employers for any reason other
                  than a leave of absence, death, or Disability on or after a
                  Participant attains the age of fifty-five (55).

1.24              "Termination of Employment" shall mean the ceasing of
                  employment with all Employers, voluntarily or involuntarily,
                  for any reason other than Retirement, Disability, death or an
                  authorized leave of absence.

1.25              "Trust" shall mean the trust established pursuant to that
                  certain Trust Agreement, dated as of May 16, 1994, between the
                  Company and the Trustee, as may be amended from time to time.

1.26              "Trustee" shall mean the trustee named in the Trust and any
                  successor trustee.

1.27              "Vesting Date" shall mean the date upon which a Participant
                  becomes 100% vested in his or her Change in Control Benefit in
                  accordance with Section 3.1 below.

1.28              "Western DCP" shall mean the Western Digital Corporation
                  Deferred Compensation Plan as in effect from time to time.

                                    ARTICLE 2
                      SELECTION, ENROLLMENT AND ELIGIBILITY

2.1               Selection by Committee. Participation in the Plan shall be
                  limited to a select group of management and highly compensated
                  employees of the Employers. From that group, the Committee
                  shall select, in its sole discretion, employees to participate
                  in the Plan.

2.2               Enrollment Requirements. As a condition to participation, each
                  selected employee shall complete, execute and return to the
                  Committee a Plan Agreement and a Beneficiary Designation Form.
                  In addition, the Committee, in its sole

                                        5



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  discretion, shall establish from time to time such other
                  enrollment requirements as it determines are necessary.

2.3               Eligibility; Commencement of Participation. Provided an
                  employee selected to participate in the Plan has met all
                  enrollment requirements set forth in this Plan and required by
                  the Committee, that employee shall commence participation in
                  the Plan on the date specified by the Committee. If a selected
                  employee fails to meet all such requirements prior to that
                  date, that employee shall not be eligible to participate in
                  the Plan until the completion of those requirements.

                                    ARTICLE 3
                            VESTING; ACCOUNT BALANCE

3.1               Vesting in Change in Control Benefit. Subject to Section 3.2
                  below:

                  (a)      General Rule. If a Participant has not Retired, died,
                           suffered a Disability, experienced a Termination of
                           Employment, or received a complete withdrawal from
                           the Western DCP that permanently ends his
                           participation in such plan prior to 90 days prior to
                           a Change in Control, the Participant shall become
                           100% vested in his or her Change in Control Benefit
                           on January 1 of the Plan Year following the Change in
                           Control (the "Vesting Date").

                  (b)      Early Vesting. If at any time on or after 90 days
                           prior to a Change in Control and prior to the Vesting
                           Date a Participant Retires, dies, suffers a
                           Disability or experiences an involuntary termination
                           of employment with all Employers, the Participant (or
                           the Participant's Beneficiary in the event of the
                           Participant's death) shall become 100% vested in his
                           or her Change in Control Benefit on the later of

                           (i)      the date of the Change in Control or

                           (ii)     the date of such Retirement, death,
                                    Disability or involuntary termination of
                                    employment, and such date (rather than
                                    January 1 of the following Plan Year) shall
                                    be considered the "Vesting Date" for
                                    purposes of this Plan.

3.2               Forfeiture. Notwithstanding Section 3.1 above, a Participant
                  shall forfeit rights to benefits under this Plan in accordance
                  with this Section 3.2.

                                        6



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  (a)      A Participant shall forfeit any right to benefits
                           under this Plan if he or she:

                           (i)      Retires, dies, suffers a Disability,
                                    experiences a Termination of Employment or
                                    receives a complete withdrawal from the
                                    Western DCP that permanently ends his or her
                                    participation in such plan prior to 90 days
                                    prior to a Change in Control; or

                           (ii)     Voluntarily terminates his or her employment
                                    (other than by Retirement or Disability)
                                    with all of his or her Employers or
                                    withdraws all of his or her interest in the
                                    Western DCP thereby ending his or her
                                    participation in such plan at any time on or
                                    after the date of the Change in Control and
                                    prior to January 1 of the Plan Year
                                    following a Change in Control.

                  (b)      A Participant receiving a Short-Term Payout (as
                           defined in the Western DCP) or other partial
                           distribution from the Western DCP before his or her
                           Vesting Date described in Section 3.1(a) hereof shall
                           forfeit a portion of his or her Change in Control
                           Benefit which bears the same proportion to all of
                           such benefit as the partial distribution bears to his
                           or her total interest in the Western DCP.

3.3               Account Balance. Within 45 days of the end of each Plan Year,
                  each Participant shall receive a statement setting forth the
                  balance of his or her Participant's account as of the end of
                  that Plan Year.

                                    ARTICLE 4
                                    BENEFITS

4.1               Change in Control Benefit.

                  (a)      Eligibility. On the Vesting Date, the Participant or
                           the Participant's Beneficiary, as the case may be,
                           shall become entitled to the "Change in Control
                           Benefit" described in Section 4.1(b).

                  (b)      Benefit and Payment. The "Change in Control Benefit"
                           shall be a dollar amount that is equal to the fair
                           market value of the assets allocated to and held in
                           the Participant's Account as of the Vesting Date.
                           This benefit shall be paid to the Participant, or his
                           or her Beneficiary, within 90 days of the Vesting
                           Date.

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Western Digital Corporation
Executive Bonus Plan
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Master Plan Document

4.2               Employer Benefit.

                  (a)      Eligibility. The Participant's Employer shall be
                           entitled to the Employer Benefit if and to the extent
                           a Participant forfeits his or her Change in Control
                           Benefit under Section 3.2 hereof.

                  (b)      Benefit and Payment. The "Employer Benefit" shall be
                           a distribution of the forfeited assets allocated to
                           and held in the Participant's Account as of the date
                           of the event described in Section 3.2 above after
                           taking into account any distributions made or to be
                           made in accordance with Section 4.1 above, plus any
                           earnings allocated to that account from that date to
                           the date of payment of the Employer Benefit and (ii)
                           a distribution of any amount allocated to the Reserve
                           Account in accordance with Section 8.3(a)(iii) below.
                           This benefit shall be paid to the Participant's
                           Employer within 120 days of January 1 of the Plan
                           Year following that event.

4.3               Withholding and Payroll Taxes. The Trustee shall withhold from
                  any and all benefit payments made under this Article 4, all
                  federal, state and local income, employment and other taxes
                  required to be withheld in connection with the payment of
                  benefits hereunder, in amounts to be determined in the sole
                  discretion of the Participant's Employer.

                                    ARTICLE 5
                                   BENEFICIARY

5.1               Beneficiary. Each Participant shall have the right, at any
                  time, to designate his or her Beneficiary (both primary as
                  well as contingent) to receive any benefits payable under the
                  Plan to a Beneficiary upon the death of a Participant.

5.2               Beneficiary Designation; Change; Spousal Consent. A
                  Participant shall designate his or her Beneficiary by
                  completing and signing the Beneficiary Designation Form, and
                  returning it to the Committee or its designated agent. A
                  Participant shall have the right to change a Beneficiary by
                  completing, signing and otherwise complying with the terms of
                  the Beneficiary Designation Form and the Committee's rules and
                  procedures, as in effect from time to time. If the Participant
                  names someone other than his or her spouse as a Beneficiary, a
                  spousal consent, in the form designated by the Committee, must
                  be signed by that Participant's spouse and returned to the
                  Committee. Upon the acceptance by the Committee of a new
                  Beneficiary Designation Form, all Beneficiary designations

                                       8



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  previously filed shall be cancelled. The Committee shall be
                  entitled to rely on the last Beneficiary Designation Form
                  filed by the Participant and accepted by the Committee before
                  his or her death.

5.3               Acknowledgment. No designation or change in designation of a
                  Beneficiary shall be effective until received, accepted and
                  acknowledged in writing by the Committee or its designated
                  agent.

5.4               No Beneficiary Designation. If a Participant fails to
                  designate a Beneficiary as provided in Sections 5.1, 5.2 and
                  5.3 above or, if all designated Beneficiaries predecease the
                  Participant or die prior to complete distribution of the
                  Participant's benefits, then the Participant's designated
                  Beneficiary shall be deemed to be his or her surviving spouse.
                  If the Participant has no surviving spouse, the benefits
                  remaining under the Plan to be paid to a Beneficiary shall be
                  payable to the executor or personal representative of the
                  Participant's estate.

5.5               Doubt as to Beneficiary. If the Committee has any doubt as to
                  the proper Beneficiary to receive payments pursuant to this
                  Plan, the Committee shall have the right, exercisable in its
                  discretion, before a Change in Control, to cause the Trustee
                  to withhold such payments until this matter is resolved to the
                  Committee's satisfaction.

5.6               Discharge of Obligations. The payment of benefits under the
                  Plan to a Beneficiary shall fully and completely discharge all
                  Employers and the Committee from all further obligations under
                  this Plan with respect to the Participant, and the
                  Participant's Plan Agreement shall terminate upon such full
                  payment of benefits.

                                    ARTICLE 6
               TERMINATION, AMENDMENT OR MODIFICATION OF THE PLAN

6.1               Termination, Amendment or Modification Prior to One Year
                  Before Change in Control. Prior to one year before a Change in
                  Control, each Employer reserves the right to terminate, amend
                  or modify the Plan or any related Plan Agreement, in whole or
                  in part, with respect to Participants whose services are
                  retained by the Employer. Notwithstanding the foregoing, no
                  termination, amendment or modification shall be effective to
                  decrease or reduce a Participant's potential benefits under
                  this Plan below the balance in his or her Participant's
                  Account as of the effective date of the termination, amendment
                  or modification.

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Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

6.2               Termination, Amendment or Modification Within One Year Before
                  a Change of Control or Following a Change in Control. Within
                  one year before a Change in Control and thereafter, neither
                  the Company, any subsidiary of the Company nor any
                  corporation, trust or other person that succeeds to all or any
                  substantial portion of the assets of the Company shall have
                  the right to terminate, amend or modify the Plan and/or any
                  Plan Agreement in effect prior to such Change in Control, and
                  all benefits under the Plan and any such Plan Agreement shall
                  thereafter be paid in accordance with the terms of the Plan
                  and such Plan Agreement, as in effect immediately prior to
                  such Change in Control. If the Plan is terminated, amended, or
                  modified within one year before the Change in Control, such
                  termination, amendment or modification shall be considered
                  void as of the date of the termination, amendment or
                  modification. Any provision of this Plan or any Plan Agreement
                  to the contrary shall be construed in accordance with this
                  Section 6.2.

6.3               Termination of Plan Agreement. Absent the earlier termination,
                  modification or amendment of the Plan, or a Participant's
                  Forfeiture of his or her benefits under this Plan, the Plan
                  Agreement of any Participant shall terminate upon the full
                  payment of the applicable benefit provided under Article 4.

                                    ARTICLE 7
                          OTHER BENEFITS AND AGREEMENTS

7.1               Coordination with Other Benefits. The benefits provided for a
                  Participant and Participant's Beneficiary under the Plan are
                  in addition to any other benefits available to such
                  Participant under any other plan or program for employees. The
                  Plan shall supplement and shall not supersede, modify or amend
                  any other such plan or program except as may otherwise be
                  expressly provided.

                                    ARTICLE 8
                                      TRUST

8.1               Establishment of the Trust; Premiums. The Employers shall
                  establish the Trust and shall at least annually transfer over
                  to the Trust such assets as the Committee determines, prior to
                  a Change in Control, or the Trustee determines, after a Change
                  in Control, are necessary to provide for the Employers' future
                  liabilities created with respect to the benefits provided
                  under the Plan and the Plan Agreements, including, without
                  limitation, the payment of insurance premiums in amounts
                  sufficient to acquire and maintain all Policies held by the
                  Trustee. At the

                                       10



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  direction of the Committee, prior to a Change in Control, or
                  the Trustee, after a Change in Control, the Employers shall
                  pay any and all Policy premiums and other costs directly to
                  the Insurer. In addition, if the Trust incurs any tax
                  liability, the Employers shall contribute to the Trust
                  sufficient funds to allow the Trustee to pay any such tax
                  liability.

8.2               Interrelationship of the Plan and the Trust. The provisions of
                  the Plan and each Plan Agreement shall govern the rights of a
                  Participant to receive distributions pursuant to the Plan. The
                  provisions of the Trust shall govern the rights of the
                  Trustee, Participant and a Participant's Beneficiary as to the
                  assets of the Trust. The Employers shall at all times remain
                  liable to carry out their obligations under the Plan. The
                  Employers and the Trustee shall cooperate with each other as
                  is necessary to minimize the Trust's tax liability.

8.3               Accounts.

                  (a)      The Trustee shall establish and maintain the
                           following separate accounts:

                           (i)      A "Participant's Account" for each
                                    Participant to which the Employers'
                                    contributions, or a portion thereof, and
                                    earnings thereon shall be allocated to and
                                    held, the assets of which are to be used to
                                    pay the Change in Control Benefit or the
                                    Employer Benefit in accordance with this
                                    Plan and the Trust; and

                           (ii)     An "Administrative Account" for the
                                    administrative expenses of the Trust to
                                    which a portion of the Employers'
                                    contributions and earnings thereon may be
                                    allocated to and held, the assets of which
                                    are to be used to pay the administrative
                                    expenses, including all taxes, of the Trust
                                    in accordance with the terms and provisions
                                    of this Plan and the Trust; and

                           (iii)    A "Reserve Account" to which shall be
                                    allocated all gains described in this
                                    subsection. In the event of the death of a
                                    Participant or a former Participant whose
                                    life is insured by a Policy, the excess of
                                    (a) the life insurance proceeds received
                                    from such Policy over (b) the cash value of
                                    such Policy as of the date immediately
                                    preceding the Participant's death shall
                                    constitute a gain allocable to the Reserve
                                    Account. Any such gain allocated to the
                                    Reserve Account shall be distributed as an
                                    Employer Benefit pursuant to Section 4.2(b).

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Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  (b)      Prior to a Change in Control, the Committee shall
                           direct the Trustee in writing as to:

                           (i)      the allocation of the Employers'
                                    contributions to the accounts described in
                                    Section 8.3(a) above, and

                           (ii)     the amounts of the earnings on the
                                    Employers' contributions held in the
                                    accounts described in Section 8.3(a) above.
                                    After a Change in Control, the Trustee shall
                                    make such allocations in accordance with the
                                    terms of the Plan and the Trust.
                                    Notwithstanding the foregoing, and except
                                    for a payment of benefits in accordance with
                                    Article 4 or a Forfeiture of benefits, a
                                    Participant's Account balance shall not be
                                    reduced.

                  (c)      Each of the accounts described in Section 8.3(a)
                           above shall qualify for and be treated as separate
                           shares under Code Section 663(c).

                                    ARTICLE 9
                               INSURANCE POLICIES

9.1               Policies. The Committee may direct the Trustee in writing to
                  acquire one or more Policies in the Trustee's name. The
                  Trustee shall be the sole and absolute owner and beneficiary
                  of each Policy, with all rights of an owner and beneficiary,
                  including without limitation, the right to surrender Policies
                  for their cash surrender values and to take one or more loans
                  against one or more Policies. Notwithstanding the foregoing,
                  the Trustee shall exercise its ownership rights in each Policy
                  only in accordance with the terms of this Plan, the respective
                  Plan Agreements and the Trust.

9.2               Documents Required by Insurer. The Trustee, the Participant's
                  Employer and the Participant shall sign such documents and
                  provide such information as may be required from time to time
                  by the Insurer.

                                   ARTICLE 10
                                 ADMINISTRATION

10.1              Committee Duties. This Plan shall be administered by a
                  Committee which shall consist of persons approved by the
                  Board. Members of the Committee may be Participants under this
                  Plan. The Committee shall also have the discretion and

                                       12



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  authority to make, mend, interpret, and enforce all
                  appropriate rules and regulations for the administration of
                  this Plan and decide or resolve any and all questions
                  including interpretations of this Plan, as may arise in
                  connection with the Plan.

10.2              Agents. In the administration of this Plan, the Committee may,
                  from time to time, employ agents and delegate to them such
                  administrative duties as it sees fit and may from time to time
                  consult with counsel who may be counsel to any Employer.

10.3              Binding Effect of Decisions. The decision or action of the
                  Committee with respect to any question arising out of or in
                  connection with the administration, interpretation and
                  application of the Plan and the rules and regulations
                  promulgated hereunder shall be final and conclusive and
                  binding upon all persons having any interest in the Plan.

10.4              Indemnity of Committee. All Employers shall indemnify and hold
                  harmless the members of the Committee against any and all
                  claims, losses, damages, expenses or liabilities arising from
                  any action or failure to act with respect to this Plan, except
                  in the case of willful misconduct by the Committee or any of
                  its members.

10.5              Employer Information. To enable the Committee to perform its
                  functions, each Employer shall supply full and timely
                  information to the Committee on all matters relating to the
                  compensation of its Participants, the date and circumstances
                  of the Retirement, Disability, death or Termination of
                  Employment of its Participants, and such other pertinent
                  information as the Committee may reasonably require.

                                   ARTICLE 11
                                CLAIMS PROCEDURES

11.1              Presentation of Claim. Any Participant or Beneficiary of a
                  deceased Participant (such Participant or Beneficiary being
                  referred to below as a "Claimant") may deliver to the
                  Committee a written claim for a determination with respect to
                  the amounts distributable to such Claimant from the Plan. If
                  such a claim relates to the contents of a notice received by
                  the Claimant, the claim must be made within 60 days after such
                  notice was received by the Claimant. All other claims must be
                  made within 180 days of the date on which the event that
                  caused the claim to arise occurred. The claim must state with
                  particularity the determination desired by the Claimant.

                                       13



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

11.2              Notification of Decision. The Committee shall consider a
                  Claimant's claim within 60 days of receipt of that claim, and
                  shall notify the Claimant in writing:

                  (a)      that the Claimant's requested determination has been
                           made, and that the claim has been allowed in full; or

                  (b)      that the Committee has reached a conclusion contrary,
                           in whole or in part, to the Claimant's requested
                           determination, and such notice must set forth in a
                           manner calculated to be understood by the Claimant:

                           (i)      the specific reason(s) for the denial of the
                                    claim, or any part of it;

                           (ii)     the specific reference(s) to pertinent
                                    provisions of the Plan upon which such
                                    denial was based;

                           (iii)    a description of any additional material or
                                    information necessary for the Claimant to
                                    perfect the claim, and an explanation of why
                                    such material or information is necessary;
                                    and

                           (iv)     an explanation of the claim review procedure
                                    set forth in Section 11.3 below.

11.3              Review of a Denied Claim. Within 60 days after receiving a
                  notice from the Committee that a claim has been denied, in
                  whole or in part, a Claimant (or the Claimant's duly
                  authorized representative) may file with the Committee a
                  written request for a review of the denial of the claim.
                  Thereafter, but not later than 30 days after the review
                  procedure began, the Claimant (or the Claimant's duly
                  authorized representative):

                  (a)      may review pertinent documents;

                  (b)      may submit written comments or other documents;
                           and/or

                  (c)      may request a hearing, which the Committee, in its
                           sole discretion, may grant.

11.4              Decision on Review. The Committee shall render its decision on
                  review promptly, and not later than 60 days after the filing
                  of a written request for review of the denial, unless a
                  hearing is held or other special circumstances require
                  additional time, in which case the Committee's decision must
                  be rendered within

                                       14



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  120 days after such date. Such decision must be written in a
                  manner calculated to be understood by the Claimant, and it
                  must contain:

                  (a)      specific reasons for the decision;

                  (b)      specific reference(s) to the pertinent Plan
                           provisions upon which the decision was based; and

                  (c)      such other matters as the Committee deems relevant.

11.5              Legal Action. A Claimant's compliance with the foregoing
                  provisions of this Article 11 is a mandatory prerequisite to a
                  Claimant's right to commence any legal action with respect to
                  any claim for benefits under this Plan.

                                   ARTICLE 12
                                  MISCELLANEOUS

12.1              Unsecured General Creditor. Participants and their
                  Beneficiaries, heirs, successors and assigns shall have no
                  legal or equitable rights, interest or claims in any property
                  or assets of an Employer. Any and all of an Employer's assets
                  shall be, and remain, the general, unpledged and unrestricted
                  assets of the Employer. An Employer's obligation under the
                  Plan shall be merely that of an unfunded and unsecured promise
                  to pay money in the future.

12.2              Employer's Liability. An Employer's liability for the payment
                  of benefits shall be defined only by the Plan and the Plan
                  Agreement, as entered into between the Employer and a
                  Participant. An Employer shall have no obligation to a
                  Participant under the Plan except as expressly provided in the
                  Plan and his or her Plan Agreement.

12.3              Nonassignability. Neither a Participant nor any other person
                  shall have any right to commute, sell, assign, transfer,
                  pledge, anticipate, mortgage or otherwise encumber, transfer,
                  hypothecate or convey in advance of actual receipt, the
                  amounts, if any, payable hereunder, or any part thereof, which
                  are, and all rights to which are expressly declared to be
                  unassignable and non-transferable, except that the foregoing
                  shall not apply to any family support obligations set forth in
                  a court order. No part of the amounts payable shall, prior to
                  actual payment, be subject to seizure or sequestration for the
                  payment of any debts, judgments, alimony or separate
                  maintenance owed by a Participant or any other person, nor

                                       15



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  be transferable by operation of law in the event of a
                  Participant's or any other person's bankruptcy or insolvency.

12.4              Not a Contract of Employment. The terms and condition of this
                  Plan shall not be deemed to constitute a contract of
                  employment between any Employer and the Participant. Such
                  employment is hereby acknowledged to be an "at will"
                  employment relationship that can be terminated at any time for
                  any reason, with or without cause, unless expressly provided
                  in a written employment agreement. Nothing in this Plan shall
                  be deemed to give a Participant the right to be employed in
                  the service of any Employer, or to interfere with the right of
                  any Employer to discipline or discharge the Participant at any
                  time.

12.5              Furnishing Information. A Participant will cooperate with the
                  Committee by furnishing any and all information requested by
                  the Committee and take such other actions as may be requested
                  in order to facilitate the administration of the Plan and the
                  payments of benefits hereunder, including but not limited to
                  taking such physical examinations as the Committee may deem
                  necessary.

12.6              Terms. Whenever any words are used herein in the singular or
                  in the plural, they shall be construed as though they were
                  used in the plural or the singular, as the case may be, in all
                  cases where they would so apply.

12.7              Captions. The captions of the articles, sections and
                  paragraphs of this Plan are for convenience only and shall not
                  control or affect the meaning or construction of any of its
                  provisions.

12.8              Governing Law. The provisions of this Plan shall be construed
                  and interpreted according to the laws of the State of
                  California.

12.9              Validity. In case any provision of this Plan shall be illegal
                  or invalid for any reason, said illegality or invalidity shall
                  not affect the remaining parts hereof, but this Plan shall be
                  construed and enforced as if such illegal and invalid
                  provision had never been inserted herein.

12.10             Notice. Any notice or filing required or permitted to be given
                  to the Committee under this Plan shall be sufficient if in
                  writing and hand-delivered, or sent by registered or certified
                  mail, to the address below:

                                    Deferred Compensation Plan Committee
                                    Western Digital Corporation
                                    20511 Lake Forest Drive
                                    Lake Forest, CA 92630

                                       16



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  Such notice shall be deemed given as of the date of delivery
                  or, if delivery is made by mail, as of the date shown on the
                  postmark on the receipt for registration or certification.

                  Any notice or filing required or permitted to be given to a
                  Participant under this Plan shall be sufficient if in writing
                  and hand-delivered, or sent by mail, to the last known address
                  of the Participant.

12.11             Successors. The provisions of this Plan shall bind and inure
                  to the benefit of the Participant's Employer and its
                  successors and assigns and the Participant, the Participant's
                  Beneficiaries, and their permitted successors and assigns.

12.12             Spouse's Interest. The interest in the benefits hereunder of a
                  spouse of a Participant who has predeceased the Participant
                  shall automatically pass to the Participant and shall not be
                  transferable by such spouse in any manner, including but not
                  limited to such spouse's will, nor shall such interest pass
                  under the laws of intestate succession.

12.13             Incompetent. If the Committee determines in its discretion
                  that a benefit under this Plan is to be paid to a minor, a
                  person declared incompetent or to a person incapable of
                  handling the disposition of that person's property, the
                  Committee may direct payment of such benefit to the guardian,
                  legal representative or person having the care and custody of
                  such minor, incompetent or incapable person. The Committee may
                  require proof of minority, incompetency, incapacity or
                  guardianship, as it may deem appropriate prior to distribution
                  of the benefit. Any payment of a benefit shall be a payment
                  for the account of the Participant and the Participant's
                  Beneficiary, as the case may be, and shall be a complete
                  discharge of any liability under the Plan for such payment
                  amount.

12.14             Distribution in the Event of Taxation. If, for any reason, all
                  or any portion of a Participant's benefit under this Plan
                  becomes taxable to the Participant prior to the Vesting Date,
                  a Participant may petition the Committee, if prior to a Change
                  in Control, or the Trustee, after a Change in Control, for a
                  distribution of assets sufficient to meet the Participant's
                  tax liability (including additions to tax, penalties and
                  interest). Upon the grant of such a petition, which grant
                  shall not be unreasonably withheld, the Trustee shall
                  distribute to the Participant from the Trust immediately
                  available funds in an amount equal to that Participant's
                  federal, state and local tax liability associated with such
                  taxation, which liability shall be

                                       17



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  measured by using that Participant's then current highest
                  federal, state and local marginal tax rate, plus the rates or
                  amounts for the applicable additions to tax, penalties and
                  interest. If the petition is granted, the tax liability
                  distribution shall be made within 90 days of the date when the
                  Participant's petition is granted.

                                       18



Western Digital Corporation
Executive Bonus Plan
Amended and Restated Effective March 28, 2003
Master Plan Document

                  IN WITNESS WHEREOF the Company has signed this Plan document
as of March 28, 2003.

                                      WESTERN DIGITAL CORPORATION,
                                      a Delaware corporation

                                      By: /s/ Raymond M. Bukaty
                                          ---------------------

                                      Officer's Name: Raymond M. Bukaty

                                       19



                                                                   EXHIBIT 10.57

                           WESTERN DIGITAL CORPORATION

                NON-EMPLOYEE DIRECTORS RESTRICTED STOCK UNIT PLAN

                            Effective March 28, 2003

1.       Purpose.

                  The purpose of this Western Digital Corporation Non-Employee
Directors Restricted Stock Unit Plan is to enable the Company to make Awards to
its Non-employee Directors of Restricted Stock Units (each, as defined below),
to attract, retain and motivate its Non-employee Directors and to further align
their interests with the interests of the Company's other stockholders.

2.       Definitions.

         As used herein, the following terms shall have the meanings ascribed
thereto below:

         (a) "ACCOUNT" means an unfunded bookkeeping account maintained by the
Company for an Award to track vesting and value thereof pursuant to Section 5.

         (b) "ADMINISTRATOR" means the Board, unless the Board has delegated
authority to the Committee, in which event the Administrator shall mean the
Committee.

         (c) "AWARD" means an Initial Grant, an Annual Grant or a Partial Grant
of Restricted Stock Units under the Plan.

         (d) "BOARD" means the Board of Directors of the Company.

         (e) "COMMITTEE" means the Compensation Committee of the Board
consisting solely of two (2) or more Non-employee Directors.

         (f) "COMMON STOCK" means the common stock of the Company.

         (g) "COMPANY" means Western Digital Corporation, a Delaware
corporation, or any successor assuming or substituting Awards pursuant to
Section 4(b)(iii).

         (h) "DEFERRED COMPENSATION PLAN" means the Company's Amended and
Restated Deferred Compensation Plan, as amended from time to time.

         (i) "DISABILITY" means a period of disability during which a
Participant qualifies for permanent disability benefits under the Company's
long-term disability plan, or, if the Participant does not participate in such a
plan, a period of disability during which the Participant would have qualified
for permanent disability benefits under such a plan had the Participant been a
participant in such a plan, as determined in the sole discretion of

                                       1



the Administrator. If the Company does not sponsor such a plan, or discontinues
to sponsor such a plan, Disability shall be determined by the Administrator in
its sole discretion.

         (j) "FAIR MARKET VALUE" per share of Common Stock, as of any date,
means the closing price for a share of Common Stock reported for that date on
the New York Stock Exchange (or such other national stock exchange or quotation
system on which shares of Common Stock are then listed or quoted) or, if no
shares of Common Stock are traded on the New York Stock Exchange (or such other
stock exchange or quotation system) on the date in question, then the closing
price for the next preceding date on which there was such a trade on the New
York Stock Exchange (or such other stock exchange or quotation system). If at
any time the Common Stock is no longer traded on a national stock exchange or
quotation system, the Fair Market Value of the Common Stock as of the date in
question shall be as determined by the Administrator in good faith.

         (k) "NON-EMPLOYEE DIRECTOR" means a director who is both a
"non-employee director" as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, and an "outside director" within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended.

         (l) "NOTICE OF AWARD" shall mean a Notice of Award in the form
established from time to time by the Administrator setting forth the number of
Restricted Stock Units awarded thereunder.

         (m) "PARTICIPANT" means any Eligible Director to whom an Award has been
made.

         (n) "PLAN" means this Western Digital Corporation Non-Employee
Directors Restricted Stock Unit Plan, as amended from time to time.

         (o) "REMOVAL" means removal of a Participant from the Board, with or
without cause, in accordance with the Company's Certificate of Incorporation,
Bylaws or Delaware General Corporate Law.

         (p) "RESTRICTED STOCK UNIT" is an unfunded bookkeeping entry
representing the cash equivalent of the Fair Market Value of one share of Common
Stock.

         (q) "45 DAY AVERAGE PRICE" shall mean the average of the Fair Market
Value of a share of Common Stock for the forty-five (45) trading days prior to
and including the applicable measurement date, subject, in the discretion of the
Administrator, to any adjustments for stock splits or other transactions
affecting the Common Stock during such period.

3.       Participation in the Plan.

         (a) Non-employee Directors of the Company ("Eligible Directors") shall
be eligible to participate in the Plan. Each Eligible Director shall, if
required by the Company, enter into an agreement with the Company in such form
as the Company shall determine consistent with the provisions of the Plan for
purposes of implementing the Plan or

                                       2



effecting its purposes. In the event of any inconsistency between the provisions
of the Plan and any such agreement, the provisions of the Plan shall govern.

4.       Credits

         (a) General. Upon the effectiveness of the Plan, the Company, shall
grant to each then Eligible Director 2,100 Restricted Stock Units (the "Initial
Grant"), and shall grant to each Eligible Director on each January 1 thereafter
2,100 Restricted Stock Units (the "Annual Grant"). If a person first becomes an
Eligible Director at any time following the date of the effectiveness of the
Plan, the Company shall pro-rate the Initial Grant and grant such Eligible
Director the number of Restricted Stock Units equal to the product of (i) the
Initial Grant divided by 365 and (ii) the number of days from the date such
person became an Eligible Director to the date of the next Annual Grant (a
"Partial Grant"). The Company shall establish a separate Account for each Award.
No fractional Restricted Stock Units shall be granted, and any fractional
Restricted Stock Unit shall be rounded up to the nearest whole number. Each
Award shall be evidenced by a Notice of Award issued by the Company.

         (b) Additional Credits.

             (i)      Whenever the Company shall pay any dividends (other than
in Common Stock) upon issued and outstanding Common Stock, or make any
distribution (other than in Common Stock) with respect thereto, there shall be
credited to each Account of a Participant a number of Restricted Stock Units
determined by multiplying the "fair value" of any dividend (or other
distribution) made by the Company with respect to one share of its Common Stock
by the number of Restricted Stock Units in that Account and then dividing that
product by the Fair Market Value of a share of Common Stock on the date of
payment of such dividend or distribution. In the case of a cash dividend or
distribution, the "fair value" thereof shall be the amount of such cash, and, in
the case of any other dividend or distribution, the "fair value" thereof shall
be such amount as shall be determined in good faith by the Administrator.

             (ii)     If the Company pays any dividend or distribution upon its
issued and outstanding Common Stock payable in additional shares of such Common
Stock there shall be credited to each Account of a Participant a number of
Restricted Stock Units equal to the product obtained by multiplying (i) the
number of Restricted Stock Units in that Account at the time of payment of such
dividend or distribution by (ii) the number of shares of Common Stock issued as
a stock dividend or distribution by the Company with respect to one share of its
Common Stock.

             (iii)    In the event of a stock split, reverse stock split,
recapitalization, reorganization, consolidation or like change in the capital
structure of the Company affecting the Common Stock not addressed by Section
4(b)(i) or 4(b)(ii), if the Administrator shall determine that such change
equitably requires an adjustment or adjustments in the number or kind of
Restricted Stock Units then allocated to Participants' Accounts, or other
computations or amounts under the Plan based upon Common Stock or its value,
such adjustments shall be made by the Administrator in its

                                       3



sole discretion and shall be conclusive and binding for all purposes of the
Plan. In the event of a liquidation of the Company, or a merger, reorganization,
or consolidation of the Company with any other corporation in which the Company
is not the surviving corporation or the Company becomes a wholly-owned
subsidiary of another corporation, if the surviving corporation in any such
merger, reorganization, or consolidation does not assume the Award or agree to
issue a substitute award in place thereof, then any unvested Restricted Stock
Units shall vest in full and become payable in accordance with Section 5(c) of
the Plan immediately prior to such liquidation, merger, reorganization, or
consolidation.

             (iv)     No fractional Restricted Stock Units shall be credited to
an Account pursuant to this Section 4(b), and any fractional Restricted Stock
Unit that otherwise would be credited shall be rounded up to the nearest whole
number.

         (c) Cessation of Credits. There shall be no further credits to an
Account after the Restricted Stock Units in such Account fully vest, or to any
Account or Accounts of a Participant after he or she ceases to be a director of
the Company for any reason.

5.       Vesting and Payment.

         (a) Vesting. Participants shall have no vested interest in Restricted
Stock Units prior to vesting thereof. Restricted Stock Units shall vest 100% on
the third anniversary of the date of the Award, provided that the Participant
has remained a director of the Company for the entire period from the date of
grant to the date of vesting. If a Participant has served as a director of the
Company for at least 48 continuous months and is at least 55 years old when such
director ceases to be a director of the Company for any reason other than
Removal (a "Retired Director"), all unvested Restricted Stock Units of such
Retired Director shall vest effective upon such director's termination as a
director of the Company and become payable in accordance with Section 5(c) of
the Plan. If a Participant ceases to be a director of the Company for any reason
other than Removal prior to being eligible to become a Retired Director, then
all of such Participant's unvested Restricted Stock Units granted within the
first twelve months immediately prior to the date of such termination shall
terminate without vesting; 1/3 of all of such Participant's unvested Restricted
Stock Units granted within the second twelve month period prior to such
termination shall immediately vest and become payable in accordance with Section
5(c) of the Plan; and 2/3 of all of such Participant's unvested Restricted Stock
Units granted within the third twelve month period prior to such termination
shall immediately vest and become payable in accordance with Section 5(c) of the
Plan. Any Restricted Stock Units that have not vested at the time of, or do not
vest upon, a Participant ceasing to be a director of the Company shall terminate
and be forfeited.

         (b) Acceleration upon Death or Disability. Notwithstanding Section
5(a), if a Participant ceases to be a director of the Company due to death or
Disability, then, subject to Section 5(g), all of such Participant's Restricted
Stock Units shall immediately vest in full and become payable in accordance with
Section 5(c) of the Plan.

                                       4


         (c) Payment Amount and Maximum Payment Amount. Subject to Section 5(f)
herein, within fifteen (15) business days after the Restricted Stock Units in an
Account have vested, the Company shall pay to the Participant, in cash, an
amount equal to the product of the number of Restricted Stock Units in that
Account on the date of vesting and the 45 Day Average Price as of the date of
vesting (the "Payment Amount"), provided, however, that in no event shall the
Payment Amount for any Account exceed 200% of the value of the Account on the
date of the Award, with such value on the date of the Award calculated as the
product of the number of Restricted Stock Units in that Account on the date of
the Award and 45 Day Average Price as of the date of the Award. Notwithstanding
the foregoing, if a Participant ceases to be a director of the Company for any
reason other than death or Disability prior to being eligible to become a
Retired Director, in no event shall the Payment Amount for any Account of such
Participant that vests as a result of such termination exceed the value of the
Account on the date of the Award, with such value on the date of the Award
calculated as the product of the number of Restricted Stock Units in that
Account on the date of the Award and the 45 Day Average Price as of the date of
the Award.

         (d) Payments Only to the Director. Payments pursuant to the Plan shall
be made only to the Participant or his or her heirs or successors pursuant to
Section 11 upon his or her death.

         (e) Payments Only in Cash. All payments to Participants hereunder shall
be in cash.

         (f) Deferral. A Participant may elect at any time prior to December 31
of at least one complete calendar year prior to the date of vesting of the
Restricted Stock Units in an Award to defer receipt of any or all payments due
under the Plan with respect to such Award. Such elections shall be made, and any
such deferral shall be effected and administered, in accordance with the
Deferred Compensation Plan.

6.       Administration.

         (a) Administrator. The Plan shall be administered by the Administrator,
which shall have the power to construe the Plan, to resolve all questions
arising under the Plan, to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable, and otherwise to carry out
the terms of the Plan, but only to the extent not contrary to the express
provisions of the Plan. The determinations, interpretations, and other actions
of the Administrator of or under the Plan or with respect to any Restricted
Stock Units granted pursuant to the Plan shall be final and binding for all
purposes on all persons. None of the Administrator, the Company nor any officer
or employee thereof shall be liable for any action or determination taken or
made under the Plan in good faith.

         (b) Amendment, Modification, Suspension and Termination of the Plan.
The Board may from time to time in its discretion amend, modify, suspend, or
terminate, in whole or in part, any or all provisions of the Plan, including but
not limited to modifying the vesting periods for the Restricted Stock Units to
provide for shorter or longer vesting period or the number of Restricted Stock
Units granted. The Board may amend, modify,

                                       5



suspend or terminate outstanding Awards, provided, however, outstanding Awards
shall not be amended, modified, suspended or terminated in such a manner as to
impair any rights of the recipient of the Award without the consent of such
recipient. If any such amendment or modification to an outstanding Award reduces
the vesting period, then any election that had been made to defer receipt of any
or all payments due under the Plan with respect to such Award pursuant to the
Deferred Compensation Plan shall be disregarded.

7.       Taxes.

         The Company shall be authorized to withhold from any grant, credit,
payment or settlement of Restricted Stock Units the amount of any taxes required
to be withheld in respect of such grant, payment or settlement or any credit of
dividend equivalents under such Restricted Stock Units or under the Plan and to
take such other action as may be necessary in the opinion of the Administrator
to satisfy all obligations for the payment of such taxes.

8.       No Rights as a Stockholder.

         Participants shall have no dividend, voting, or any other rights as a
stockholder of the Company with respect to any Restricted Stock Unit.

9.       No Property Rights.

         The grant of an Award pursuant to the Plan shall not be deemed the
grant of a property interest in any assets of the Company. An Award evidences
only a general obligation of the Company to comply with the terms and conditions
of the Plan and make payments in accordance with the Plan from the assets of the
Company that are available for the satisfaction of obligations to creditors. The
Company shall not segregate any assets in respect of any Award or Account. The
rights of the recipient of Restricted Stock Units to benefits under the Plan
shall be solely those of a general, unsecured creditor of the Company.

10.      Reorganization.

         The receipt of an Award under the Plan shall not affect the right of
the Company to reclassify, recapitalize or otherwise change its capital or debt
structure or to merge, consolidate, convey any or all of its assets, dissolve,
liquidate, windup or otherwise reorganize.

11.      Assignment.

         No right or interest to or in the Plan, or any payment or benefit to a
Participant shall be assignable by the Participant except by will or the laws of
descent and distribution. No right, benefit or interest of the Participant
hereunder shall be subject to anticipation, alienation, sale, assignment,
encumbrance, charge, pledge, hypothecation or set off in respect of any claim,
debt or obligation, or to execution, attachment, levy or similar process or
assignment by operation of law. Any attempt, voluntarily or

                                       6



involuntarily, to effect any action specified in the immediately preceding
sentences shall, to the full extent permitted by law, be null, void and of no
effect; provided, however, that this provision shall not preclude a Participant
hereunder from designating one or more beneficiaries to receive any amount that
may be payable to the Participant after his or her death and shall not preclude
the legal representatives of the Participant's estate from assigning any right
hereunder to the person or persons entitled thereto under his or her will, or,
in the case of intestacy, to the person or persons entitled thereto under the
laws of intestacy applicable to his or her estate.

12.      No Right to Continued Board Membership.

         The grant of Restricted Stock Units shall not be construed as giving a
Participant the right to be retained as a director of the Company. The Board may
at any time fail or refuse to nominate a Participant for election to the Board,
the stockholders of the Company may at any election fail or refuse to elect any
Participant to the Board, or a Participant may be subject to Removal, in each
case, free from any liability or claim under the Plan or any Restricted Stock
Unit except as expressly set forth herein.

13.      Effective Date and Duration of the Plan.

         The Plan shall be effective March 28, 2003. The Plan shall terminate
upon the approval of the Board. Deferral elections pursuant to Section 5(f) may
be made under the Plan prior to its effectiveness, but no issuances under the
Plan shall be made before its effectiveness or after its termination.

14.      Invalid Provisions.

         If any provision of the Plan is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of the
Plan, such provision shall be fully severable; the Plan shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never been a
part of the Plan; and the remaining provisions of the Plan shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or severance from the Plan. Furthermore, in lieu of such
illegal, invalid or unenforceable provision there shall be added automatically
as part of the Plan a provision as similar in terms to such illegal, invalid or
unenforceable provision as is possible and still be legal, valid and
enforceable.

15.      Governing Laws.

         The Plan and all rights and obligations under the Plan shall be
construed in accordance with and governed by the laws of the State of
California, excluding its conflicts of laws principles.

                                       7



                                                                   Exhibit 10.58

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.



              SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF
                             SEMICONDUCTOR PRODUCTS

                                 BY AND BETWEEN

                          MARVELL SEMICONDUCTOR, INC.,

                              MARVELL ASIA PTE LTD
                                       and

                       WESTERN DIGITAL TECHNOLOGIES, INC.



Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.




              SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF
                             SEMICONDUCTOR PRODUCTS



Section                                                   Page
- -------                                                  ------
                                                  
1.0     Definitions                                      Page 3
2.0     Term of Agreement                                Page 4
3.0     [*]                                              Page 4
4.0     Forecast of Product Purchases                    Page 5
5.0     Purchase Orders                                  Page 5
6.0     Supplier's [*] Obligation and
               Buyer's [*] Obligations                   Page 6
7.0     Rescheduling Shipment Dates                      Page 7
8.0     Cancellation of Purchase Orders                  Page 8
9.0     Pull Signals                                     Page 8
10.0    [*] Program                                      Page 9
11.0    Quarterly Business Review                        Page 9
12.0    Invoicing, Payment Terms, Taxes                  Page 9
13.0    Termination                                      Page 10
14.0    Engineering Changes                              Page 11
15.0    Quality Standards                                Page 11
16.0    Product Warranty                                 Page 11
17.0    Supplier's Indemnity                             Page 12
18.0    Confidential Information                         Page 13
19.0    Supplier Engineering Support                     Page 13
20.0    Notice                                           Page 13
21.0    General Provisions                               Page 14



Exhibit A
Exhibit B
Exhibit C


                                       2

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

              SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF
                             SEMICONDUCTOR PRODUCTS

        THIS SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF SEMICONDUCTOR
PRODUCTS (this "Agreement"), dated June 13, 2002, is made and entered into by
and among WESTERN DIGITAL TECHNOLOGIES, INC. ("Buyer"), MARVELL SEMICONDUCTOR,
INC., ("MSI"), MARVELL ASIA PTE LTD ("MAPL")(MSI AND MAPL are collectively the
"Supplier"). Buyer and Supplier are each a "party" and, collectively, are the
"parties" to this Agreement.

        Buyer agrees to purchase from Supplier, and Supplier agrees to supply to
Buyer, Buyer's read channel supply requirements in accordance with the terms and
conditions stated in this Agreement and in any written exhibits agreed to by the
parties, attached to this Agreement and incorporated herein.

1.0     DEFINITIONS

1.1     Commencement Date: June 13, 2002.

1.2     Engineering Change: A mechanical or electrical change to a Product which
        may effect the form, fit, function or maintainability of the Product

1.3     Plant of Manufacture: Buyer's manufacturing facility or assigned JIT
        hubs.

1.4     Product(s): For the purposes of this Agreement, Product or Products, as
        the case shall be, shall mean Supplier's [*] series read channel
        integrated circuit devices. The parties agree that from time to time,
        the parties may amend the definition of Products hereunder, but only if
        both parties agree to do so in writing. The parties agree that, until
        amended, the prices for each Product shall be as set forth in Exhibit A.

1.5     Purchase Order: An order submitted by Buyer for the purchase of Products
        under this Agreement.

1.6     Purchase Order Lead Time: The required minimum amount of time between
        Supplier's receipt of a Purchase Order issued by Buyer and the requested
        Shipment Date necessary to complete Seller's entire manufacturing cycle
        time, including Front End Manufacturing Cycle Time and Back End
        Manufacturing Cycle Time. Purchase Order Lead Time shall be jointly
        determined by Buyer and Supplier [*].

1.7     Front End Manufacturing Cycle Time: Lead-time from wafer start through
        probe and shipping.

1.8     Back End Manufacturing Cycle Time: Lead-time from probe, die bank,
        assembly, test and shipping.

1.9     Shipment Date: Date for shipment of Products specified by Buyer in a
        Purchase Order or Pull Signal accepted by Supplier.

1.10    Related Company: A corporation, company or other entity which controls
        or is controlled by a party hereunder or any another Related Company of
        such party,


                                       3

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

        where control means ownership or control, direct or indirect, of more
        than fifty (50) percent of: (i) the outstanding voting shares or
        securities (representing the right to vote for the election of directors
        or managing authority), or (ii) the ownership interests representing the
        right to make decisions for such a corporation, company or other entity
        (as the case may be in a partnership, joint venture or unincorporated
        association having no outstanding shares or securities). However, any
        such corporation, company or other entity shall be deemed to be a
        Related Company of such party only so long as such ownership or control
        exists.

1.11    Unit(s): A single unit of the Product.

1.12    Phase out: Supplier's determination to exit the ASIC business as defined
        in this Agreement.

1.13    LCBI: Lot Control Burn In.

1.14    Epidemic Failure: In the case of: (i) customer line integration, any
        component-related failure resulting in a DPPM level of [*]; (ii) a field
        failure, any component-related failure resulting in a DPPM level or [*]
        measured over a [*] day period; or, (iii) at an end user site, a higher
        than expected failure rate as measured against the installed base and
        the root cause of such failure is attributable to a single component,
        the root cause of which is directly attributable to Supplier's
        integrated circuit design or an integrated circuit fabrication issue.

1.15    Field Recall: Buyer-initiated recall of shipped units of Buyer's
        products directly resulting from a failure of Supplier's Products
        directly attributable to Supplier's integrated circuit design or an
        integrated circuit fabrication issue. Field Recall shall not include
        normal warranty returns over time.

1.16    QBR: Quarterly Business Review conducted by the parties hereto during
        the term of this Agreement.

1.17    SQR: Supplier Quality Rating.

1.18    SSR: Supplier Service Rating.

1.19    SDR: Supplier Development Rating.

2.0     TERM OF AGREEMENT

The term of this Agreement shall commence on the Commencement Date and shall
expire five (5) years thereafter, unless otherwise terminated by either of the
parties in accordance with the provisions of this Agreement.

3.0     [*]

No later than June 24, 2002, Supplier shall [*]


                                       4

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

[*]

4.0     FORECAST OF PRODUCT PURCHASES

4.1     Buyer shall issue to Supplier a forecast covering a period of [*] to [*]
        months (current fiscal quarter and [*] subsequent quarters) on the first
        week of every Buyer fiscal quarter or more regularly as Buyer deems
        necessary. Seller shall acknowledge receipt and acceptance of Buyer's
        forecast by return facsimile or e-mail within forty-eight (48) hours of
        Buyer's issuing such forecast. If Supplier fails to respond to Buyer's
        forecast within forty-eight (48) hours, such forecast shall be deemed
        accepted by Buyer. Both Supplier and Buyer agree that forecasts
        constitute good faith estimates of Buyer's anticipated requirements of
        Products for the periods indicated based on current market conditions,
        and Supplier's acceptance shall constitute Supplier's agreement that it
        will exercise good faith efforts to quote and supply the requirements
        set forth in such forecast if finally ordered by Buyer in accordance
        with applicable provisions of this Agreement.

4.2     If Supplier cannot meet Buyer's requirements as set forth in a forecast
        or Buyer greatly reduces its forecast, Supplier and Buyer agree to
        engage in good faith discussions to resolve the issue on terms
        satisfactory to both parties.

5.0     PURCHASE ORDERS

5.1     Buyer shall submit a Purchase Order to Supplier on a quarterly basis.
        The Purchase Order shall specify [*] for the Products [*] covered by the
        Purchase Order and shall be based on [*] as of the date of the Purchase
        Order.

5.2     Subject to the rescheduling and cancellation provisions herein, Buyer
        agrees that it shall [*]. Supplier will ship Products during the quarter
        by the Shipment Dates specified in the Purchase Order or, if Buyer
        chooses, by Shipment Dates specified in Pull Signals issued by Buyer
        throughout the quarter. Any [*], unless Buyer informs Supplier otherwise
        in advance and in writing.

5.3     Supplier will acknowledge receipt and acceptance of Buyer's Purchase
        Orders within 48 hours of receipt. If Supplier fails to respond to
        Buyer's Purchase Order within forty-eight (48) hours, such Purchase
        Order will be deemed accepted by Supplier. Purchase Orders must be
        placed in advance, with at least the Purchase Order Lead Time agreed to
        by the Parties, to allow Supplier to meet Buyer's requested Shipment
        Date. Buyer may request, without incurring any liability


                                       5

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.


        hereunder, improved Shipment Dates, and Supplier will [*].

5.4     Purchase Order Lead Times shall be [*]. Purchase Order Lead Times may
        not increase above [*] weeks during the term of this Agreement. Supplier
        shall undertake [*] to reduce Purchase Order Lead Times during the Term
        of this Agreement to [*] lead times of [*] weeks.

5.5     Purchase Orders and acknowledgements thereof exchanged by the parties
        will be used to convey Product order information only. If the terms of a
        Purchase Order conflict with the terms of this Agreement, the terms of
        this Agreement shall govern.

5.6     Supplier shall supply [*] the Products at the prices set forth in
        Exhibit A attached hereto [*].

5.7     Buyer's Purchase Orders issued hereunder shall specify and include the
        following information:

        a) Buyer's [*] for the Product being purchased;

        b) Quantity of Product requested;

        c) Product price agreed to by the parties per the applicable exhibit to
           this Agreement;

        d) Location to which the Buyer specifies the Products shall be shipped
           and the Shipment Date specified by the Buyer; and

        e) Reference to this Agreement.

6.0     SUPPLIER'S [*] OBLIGATION AND BUYER'S [*] OBLIGATIONS.

6.1     [*], Supplier shall [*] in accordance with EXHIBIT B from [*] through
        [*] and shall [*] supply Buyer with up to [*] Product units per month
        beginning in [*] and


                                       6

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.


        continuing through the life of the Buyer hard drive products
        incorporating Supplier's Products.

6.2     In consideration of (i) Supplier [*] on Buyer's behalf as set forth
        above, (ii) Supplier [*] and (iii) [*] contemplated in Section [*] below
        and Supplier's performance thereon, Buyer agrees that Buyer shall
        [*] during the Term of this Agreement.

6.3     Buyer and Supplier agree to work in good-faith to mutually define the
        development and design milestones, pricing, delivery and other
        reasonable requirements of all Products supplied hereunder.
        Notwithstanding the contrary provisions of this section, Buyer's
        obligation to [*].

6.4     Buyer agrees to work in good faith to complete [*]. Buyer agrees to [*]
        to complete the [*], and agrees to work [*].

7.0     RESCHEDULING SHIPMENT DATES

7.1     Buyer may reschedule, without incurring any charge or liability to
        Seller, the Shipment Date for up to 100% of the amount of the Products
        specified in a Purchase Order accepted by Supplier, provided that Buyer
        has provided to Supplier written notice of such rescheduled Shipment
        Date within the time periods specified in the table below. Buyer may
        reschedule each shipment of Products a single time for up to ninety (90)
        days without incurring any charge or liability to Supplier.



                                                          Maximum amount of
                                                          days a reschedule
           Number of Calendar      Amount of Purchase     quantity can be
           Days' Notice Prior to   Order Subject to       moved from original
           Shipment Date           Reschedule             ship date
           ---------------------------------------------------------------------
                                                    
           0 to [*] days               0
           ---------------------------------------------------------------------
           [*] to [*] days             [*]                      [*] days
           ---------------------------------------------------------------------



                                       7

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.


           ---------------------------------------------------------------------
                                                    
           [*] to [*] days             [*]                      [*] days
           ---------------------------------------------------------------------
           [*] days or more            [*]                      [*] days
           ---------------------------------------------------------------------



8.0     CANCELLATION OF PURCHASE ORDERS

8.1     Buyer may cancel a Purchase Order upon written notice to Supplier only
        in accordance with the terms of this Agreement. Once Supplier has
        received Buyer's notice of cancellation, Supplier will immediately cease
        all work assembling Products in support of such canceled Purchase Order
        and will provide a status report of the works in progress ("WIP") to
        assess Buyer's liability for such WIP. Buyer shall have the right to
        inspect the WIP to verify the accuracy of Supplier's status report.
        Buyer agrees that upon notifying Supplier that a Purchase Order is
        cancelled, Buyer shall assume liability for such WIP according to the
        following schedule based on the Purchase Order Price (POP) for each
        outstanding Purchase Order

               Finished Goods         [*] of (POP)
               Final Test             [*] of POP
               Assembly               [*] of POP
               Die Bank               [*] of POP
               Wafer Fab              [*] of POP

8.2     No cancellation charges will be due if:

        a)  [*] a Purchase Order because of a [*] of more than [*] from a
            designated Shipment Date due [*];

        b)  Buyer cancels a Purchase Order because Supplier executes an
            unauthorized Engineering Change or an unauthorized change to the
            Product qualification plan of record agreed to by the parties (i.e.
            change of fabrication site, assembly site, and or test site); or

        c)  [*] a Purchase Order because [*].

9.0     PULL SIGNALS

9.1     Each week during the term hereof, Buyer shall issue to Seller a Pull
        Signal which shall cover a [*] week period commencing on the day
        Supplier receives such Pull Signal and continuing through the subsequent
        calendar week. Such Pull Signal shall specify the amount of Products and
        the Shipment Dates by which Products are to be delivered during such [*]
        week period.

9.2     Supplier shall acknowledge, by return facsimile or e-mail, its receipt
        and acceptance of each Pull Signal within [*] of Buyer's issuing such
        Pull Signal. Any Pull Signal not so accepted will be deemed rejected.


                                       8

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

9.3     If the Pull Signal is or is deemed rejected by Supplier, Supplier shall
        notify Buyer within [*] of receiving the Pull Signal and provide Buyer
        with an alternative to the Product amounts and Shipment Dates contained
        in the Pull Signal. If Buyer is not satisfied with Supplier's response,
        both Buyer and Supplier agree to immediately hold discussions to resolve
        their disagreement.

10.     [*] PROGRAM

Supplier will maintain a [*] approximately [*] remaining in such [*]. The [*]
will consist of [*] designated by Buyer [*] designated by Supplier but
acceptable to Buyer. Any change [*] set forth above must be mutually agreed upon
between Buyer and Supplier. Supplier will have [*] Product ramp and, thereafter,
shall [*] for the term of this Agreement. Buyer and Supplier will monitor
Buyer's demand for Products quarter to quarter with the intent of [*] the [*]
that there is no further requirement for the Product.

11.     QUARTERLY BUSINESS REVIEW

Buyer and Supplier shall meet on a quarterly basis for a QBR. The QBR shall
focus on the SDR, SQR and SSR that Supplier has earned for the preceding
quarter. The parties shall review the Supplier's performance during the
preceding quarter, identify areas for improvement and recommend actions to be
taken by either Supplier or Buyer or both Supplier and Buyer to satisfy the
parties' business goals.

12.0    INVOICING, PAYMENT TERMS, TAXES

12.1    Supplier shall invoice Buyer for all Products shipped to Buyer's JIT Hub
        located in Malaysia or to such other location, as Buyer shall designate
        from time to time hereunder. Supplier shall ship all Products [*] from
        Supplier's facility. Supplier will invoice Buyer once the Product is
        pulled from Buyer's JIT Hub, and Buyer shall complete full and final
        payment of such invoice within [*] of the date of Supplier's invoice.
        Buyer will maintain good-faith efforts [*]. In the event that Buyer does
        not pay Supplier's invoice within [*] days of the date of the invoice,
        Buyer shall pay subsequent Supplier invoices no later than [*] days
        after the date of Supplier's invoice. If Buyer thereafter pays all
        invoices within [*] days of the date of Supplier's invoice for three
        successive


                                       9

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

        months, Buyer shall again be permitted to pay subsequent invoices from
        Supplier within [*] days of the date of such invoices [*].

12.2    Buyer agrees to pay any taxes resulting from the transactions
        contemplated under this Agreement unless Buyer can provide appropriate
        exemption certificates.

12.3    Buyer represents that it holds a valid Reseller's exemption certificate
        for Products purchased for resale in each applicable taxing
        jurisdiction. Based on this representation, Supplier shall, where the
        law permits, treat Buyer as exempt from applicable state and/or local
        sales tax for Products purchased hereunder.

12.4    Buyer shall promptly notify Supplier in writing of any modification or
        revocation of Buyer's exempt status. Buyer shall reimburse Supplier for
        any and all assessments resulting from a refusal by a taxing
        jurisdiction to recognize any Buyer exemption certificates, or from
        Buyer's failure to have a valid certificate.

13.     TERMINATION

13.1    If either party is in default of any material provision of this
        Agreement and such default is not corrected within [*] days of receipt
        of written notice, this Agreement may be terminated by the party not in
        default. If the default is such that is cannot be reasonably cured
        within [*] days, then the defaulting party must commence cure within
        [*] days and proceed to cure [*]. These provisions shall not affect
        Supplier's obligations to Buyer set forth below in this Section 13, in
        the event of Supplier's breach of a material provision of this
        Agreement.

13.2    If Buyer terminates this Agreement due to Supplier's default, all
        outstanding Purchase Orders shall be [*].

13.3    If Supplier terminates this Agreement due to Buyer's default, at
        Supplier's discretion, all outstanding Purchase Orders shall be
        automatically cancelled and the cancellation charges set forth in this
        Agreement shall apply [*].

13.4    If Supplier (i) decides to [*] or (ii) Supplier is unable to [*], then
        Supplier agrees to do the following:


                                       10

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

        [*].

14.     ENGINEERING CHANGES

Supplier shall not make any Engineering Changes to Products under this Agreement
once final production level Product is qualified unless such Engineering Change
is specified in writing and expressly accepted by Buyer.

15.     QUALITY STANDARDS

Supplier agrees to make [*] to achieve all quality and reliability requirements
to be set forth in a Statement of Quality (the "SOQ"), in substantially the same
form as Exhibit C hereto, to be mutually agreed upon by the parties. Supplier
agrees that the requirements set forth in the SOQ shall apply to all Products
that Supplier supplies to Buyer hereunder.

16.     PRODUCT WARRANTY

16.1    Notwithstanding any other provision of this Agreement, Supplier warrants
        that for a period of [*] each unit of Product delivered will comply with
        each part of the [*] including all changes to and iterations of [*] and
        that such Product will be [*] provided, that, such use is in conformance
        with the [*]. All [*] are provided [*].

16.2    If Buyer determines during the warranty period that a Product does not
        conform to the [*], Supplier's obligation shall be limited to (i)
        replacing such Product with a new Product that conforms to Seller's
        warranty or (ii) issuing Buyer a credit equal to the amount that Buyer
        paid for the Product, at Supplier's option.

16.3    In addition to Supplier's obligations under Section 16.2, in the event
        of an [*] of a Product during Supplier's warranty term or


                                       11

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.


        Buyer's warranty term, whichever is shorter, Buyer and Supplier shall
        meet and attempt to develop a mutually satisfactory resolution regarding
        liability resulting from [*]. In the event that the parties are unable
        to reach a mutually satisfactory resolution, each party reserves all
        claims and defenses available to it, at law or in equity, regarding such
        [*].

16.4    Subject to the confidentiality provisions of this Agreement, Buyer
        agrees to provide Supplier with Buyer's [*] that Buyer generates [*] of
        manufacturing its hard drive products that incorporate the Products.

17.0    SUPPLIER'S INDEMNITY

17.1    Supplier agrees to indemnify, defend and hold harmless Buyer and its
        Related Companies and their respective directors, officers, employees,
        representatives, agents, successors and assigns, from and against any
        claims, losses, damages, liabilities, causes of action, suits, costs and
        expenses, including all reasonable attorneys' fees and disbursements of
        counsel and expenses of investigation, finally awarded against Buyer or
        its Related Companies arising out of or related to (a) any claims,
        actions, suits or proceedings alleging that any Products that Buyer
        purchases or otherwise receives from Supplier infringe any patent, trade
        secret, copyright or other intellectual property rights of any third
        party and (b) any claims, actions, suits or proceedings whether in tort,
        contract or otherwise alleging personal injury or death, or any damage
        to any property, caused or allegedly caused by any negligent act or
        omission by Supplier or any defect in any Products that Buyer purchases
        or otherwise receives from Supplier. Notwithstanding the foregoing,
        Supplier is not obligated to defend or settle any such suit and is not
        obligated to pay any such damages or costs, if such claim arises out of
        (i) a combination of the Supplier's technology with technology not
        supplied by the Supplier or (ii) a modification, alteration or amendment
        of the Supplier's Technology. In the event that any Products are alleged
        to be infringing, Supplier agrees, in its sole discretion and at its own
        expense, to (i) procure for Buyer the right to continue to use such
        Products, (ii) replace such Products with noninfringing products that
        comply with Section 16.1 above, or (iii) modify such Products so that
        they become noninfringing and continue to comply with Section 16.1
        above.

17.2    Buyer agrees to indemnify, defend and hold harmless Supplier and its
        Related Companies and their respective directors, officers, employees,
        representatives, agents, successors and assigns from and against any
        claims, losses, damages, liabilities, causes of action, suits, costs and
        expenses, including all reasonable attorneys' fees and disbursements of
        counsel and expenses of investigation, finally awarded against Supplier
        or its Related Companies arising out of or related to any claims,
        actions, suits or proceedings alleging that any specification, design or
        implementation detail that Supplier receives from Buyer or that Supplier
        is


                                       12

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

        required to incorporate into any Products as a result of Buyer's
        requirements or technical specifications infringes any patent, trade
        secret, copyright or other intellectual property right of a third party.

18.     CONFIDENTIAL INFORMATION

18.1    Except as set forth below, all information exchanged under this
        Agreement will be deemed to be non-confidential. If either party
        determines that it becomes necessary to exchange confidential
        information in order to perform under this Agreement, the exchange of
        such confidential information will be made under a separate written
        nondisclosure agreement.

18.2    Each party (i) will keep the existence of this Agreement confidential
        until the first Unit is shipped by Supplier to Buyer, (ii) will keep the
        contents of this Agreement confidential during the term of the Agreement
        and for a period of [*] thereafter, and (iii) will not, without first
        obtaining the written consent of the other party, disclose any portion
        of this Agreement or any information contained herein to any third party
        except as may be required to enforce this Agreement or as may be
        required by applicable statute, regulation or court order. In the event
        such disclosure is required, the party making such disclosure will
        provide the other party sufficient notice for the other party to seek
        appropriate protection, in court if necessary. In the event of
        disclosure thereafter, the party making the disclosure will keep such
        disclosure to a minimum and protect the information so disclosed by a
        protective order or the like unless otherwise agreed by the parties.

        The parties agree that each party may be required to file this Agreement
        as an exhibit to filings each party makes with the U.S. Securities and
        Exchange Commission (the "SEC"). In connection with any such filing,
        each party agrees to seek confidential treatment of the terms of the
        Agreement from the SEC, and each party further agrees to notify the
        other party in advance of such filing and to work cooperatively with the
        other party regarding the form and content of such confidential
        treatment request.

19.     SUPPLIER ENGINEERING SUPPORT

Supplier agrees to support [*] for the Products and any other [*] covered by
this Agreement. Support to include [*] all of which [*] shall be subject to the
provisions of the NDA.

20.     NOTICES

Any notices or other communications given by either party under this Agreement
shall be in writing and shall be (a) delivered personally, (b) transmitted by
facsimile machine with


                                       13

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

confirmation in writing mailed first class, (c) sent by a nationally recognized
overnight courier or overnight mail service that guarantees overnight delivery
or (d) sent by registered certified United States mail with return receipt
requested, postage prepaid, addressed as follows:

        If to Buyer:         Western Digital Technologies, Inc.
                             20511 Lake Forest Drive
                             Lake Forest, CA 92630
                             Attn: General Counsel
                             Tel: (949) 672-7000
                             Fax: [*]

        If to Supplier:      Marvell Asia Pte Ltd
                             151 Lorong Chuan #02-05
                             New Tech Park
                             Singapore 556741
                             Attn: General Manager
                             Tel: (65) 756-1600
                             Fax: [*]

        With a copy to:      Marvell Semiconductor, Inc.
                             700 First Avenue
                             Sunnyvale, CA 94089
                             Attn: Vice President of Business Affairs
                             and General Counsel
                             Tel: (408) 222-2500
                             Fax: [*]

        Any such notice shall be effective (a) upon receipt if personally
        delivered, (b) on the date of the facsimile transmission (which date is
        indicated by the facsimile machine of the party) if sent by facsimile
        and confirmed by mail, (c) on the first business day if sent by a
        nationally recognized overnight courier or overnight mail that
        guarantees overnight delivery and (d) on the third business day
        following the date of mailing if sent by registered or certified mail.
        Each party may change the address to which notices are to be delivered
        by giving notice as provided in this section.

21.     GENERAL PROVISIONS

21.1    Subject to the confidentiality and intellectual property provisions
        contained herein, neither this Agreement nor any activities hereunder
        will impair any right of Supplier or Buyer to design, develop,
        manufacture, market, service, or otherwise deal in, directly or
        indirectly, products or services including those which are competitive
        with those offered by Supplier or Buyer.


                                       14

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

21.2    This Agreement may be modified only by a written amendment signed by
        authorized representatives of the Buyer and the Supplier.

21.3    All obligations and duties which by their nature survive the expiration
        or termination of this Agreement shall remain in effect beyond any such
        expiration or termination.

21.4    Except for the obligation to pay any monetary sums due, neither party
        shall be responsible for failure to fulfill its obligations under this
        Agreement due to fire, flood, war or other such cause beyond its control
        and without its fault or negligence provided it promptly notifies the
        other party.

21.5    Neither party shall assign this Agreement or any rights hereunder
        without the prior written consent of the other party, except that
        Supplier's rights to payments under the Agreement are freely assignable.
        In the event that Buyer merges with or into, or is acquired by, another
        entity such that Buyer is not the surviving entity of such merger or
        acquisition (the "Successor Entity"), the rights and obligations of
        Buyer under this Agreement shall automatically become the rights and
        obligations of the Successor Entity. A sale by Buyer of all or
        substantially all of its assets to a third party shall be deemed to be a
        merger with or into, or an acquisition by, such party for purposes of
        this provision. In the event any Successor Entity is unable or unwilling
        to assume the rights and obligations of this Agreement, then such
        Successor Entity shall immediately [*].

21.6    The waiver by either party of an instance of the other party's
        noncompliance with any obligation or responsibility herein shall not be
        deemed a waiver of subsequent instances or of either party's remedies
        for such noncompliance.

21.7    Each party will comply with all applicable federal, state and local
        laws, regulations and ordinances including, but not limited to, the
        regulations of the U.S. Government relating to the export or re-export
        of machines, commodities, software and technical date insofar as they
        relate to the activities under this agreement. Buyer agrees that
        machines, commodities, software and technical data provided under this
        Agreement may be subject to restrictions under the export control laws
        and regulations of the United States of America, including, but not
        limited to, the U.S. Export Administration act and the U.S. Export
        Administration Regulations. Buyer hereby agrees that neither machines,
        commodities, software or technical data provided by Supplier under this
        Agreement, nor the direct product thereof, is intended to be shipped,
        directly or indirectly, to prohibited countries or nationals thereof.
        Buyer agrees it is responsible for obtaining required government
        documents and approvals to export any machine, commodity, software or
        technical data.


                                       15

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

21.8    This Agreement may be executed in counterparts, each of which shall be
        deemed an original but all of which taken together shall constitute one
        and the same instrument. Facsimile signatures shall be deemed to be
        originals.



                                       16

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

SUPPLIER                                    BUYER

Marvell Semiconductor, Inc.                 Western Digital Technologies, Inc.
700 First Avenue                            20511 Lake Forest Drive
Sunnyvale, CA 94089                         Lake Forest, CA 92630


By: /s/ Sehat Sutardja                      By: /s/ WILLIAM JOHNS
   -------------------------------             ---------------------------------
        Dr. SEHAT SUTARDJA,
        PRESIDENT and CEO
                                            Title: VP Worldwide Matls.
                                                  ------------------------------

Marvell Asia Pte Ltd
151 Lorong Chuan #02-05
Singapore 556741.

By: /s/ Dr. H. Kuong
   -------------------------------
           Dr. H. KUONG,
          GENERAL MANAGER


                                       17

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

                                    EXHIBIT A

                                 PRODUCT PRICES

[*]

[*]

[*]

[*]

[*]

[*]



Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

                                    EXHIBIT B



   TIME PERIOD            [*]                       COMMENT
   -----------            ---          -----------------------------------
                                
     July 02              [*]            Deliveries starting July 15th
    August 02             [*]               Actual quantity needed
   September 02           [*]               Actual quantity needed
     Q3 TOTAL             [*]
    October 02            [*]                Finalize by July 1st
   November 02            [*]               Finalize by August 1st
   December 02            [*]              Finalize by September 1st
     Q4 TOTAL             [*]
2003 QUARTERLY [*]        [*]         [*], Finalize January by October 1st





Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.
[WESTERN DIGITAL LOGO] [MARVELL LOGO]
                                                                   [*]
                                                            Statement of Quality

- --------------------------------------------------------------------------------






                                      [*]

                                      [*]

                              STATEMENT OF QUALITY


                                                                     Page 1 of 5


Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

[WESTERN DIGITAL LOGO] [MARVELL LOGO]
                                                                   [*]
                                                            Statement of Quality
- --------------------------------------------------------------------------------


                     [*] STATEMENT OF QUALITY (REVISION 1.0)


This Statement of Quality (this "SoQ") is agreed to as of June 24, 2002 by and
between Western Digital TECHNOLOGIES ("WD") and Marvell asia pte ltd ("MAPL").

1.   PURPOSE

     The purpose of this document is to specify the quality and reliability
     requirements for the [*] and to document the processes and procedures MAPL
     shall employ to attain those requirements.

2.   OVERVIEW OF [*] PROGRAM

     [*] is the first generation of a family [*]. The intent of [*] and
     follow-on versions is to take advantage of cost reduction opportunities.
     The [*] is targeted for use in the WD [*] line of hard disk drive products.

2.1  Description of [*]

     [*] is an [*] product for WD that integrates MAPL's proven technology
     cores. [*] wafer fabrication uses the [*] process technology [*] and is
     packaged in [*] body outline [*] package. Approximate die size for [*] is
     [*].

2.2  Description of [*] Manufacturing Flow

     Wafer fab is [*]. Wafer probe is performed at [*]. Package assembly
     subcontractor is [*] Final test [*]. Parts are finished, packed and shipped
     from [*].


                                                                     Page 2 of 5


Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.


[WESTERN DIGITAL LOGO] [MARVELL LOGO]
                                                                     [*]
                                                            Statement of Quality
- --------------------------------------------------------------------------------

3.   QUALITY REQUIREMENTS

     It is central to WD's mission to provide best-in-class quality and
     reliability product to our customers. Consequently, components used in WD
     HDD products must meet stringent levels of quality and reliability in terms
     of expected fitness-for-use and failure during PCBA assembly and test, HDD
     assembly and test, end customer integration, and field use. These
     requirements are subject to review and change as the business situation
     warrants, but no less than annually. MAPL understands and agrees that
     failure to meet these quality levels will require immediate and resolute
     actions to rectify in the most expeditious manner possible [*]. WD will
     cooperate fully in these efforts. It is not WD's intention to reject
     component shipments based upon occasional and marginal failure to meet
     these quality levels. However, sustained quality excursions and/or
     inability to correct quality problems to meet these requirements will
     affect WD's ability to integrate said components and may be cause for
     business interruptions, such as stop-ship orders (MSSO).

     Current requirements as stated below should be viewed as minimum acceptable
     criteria for[*]:

3.1  [*]

3.2  [*]

3.3  [*]

3.4  [*]

3.5  [*]

3.6  [*]

4.   COMPONENT QUALIFICATION

     WD has a comprehensive process in place to qualify components for
     integration into our products. This process involves Engineering teams in
     the US and in our factories and our suppliers, and concludes when the
     component is listed unfettered on our Approved Vendor List (AVL). It must
     be demonstrated that the component in question can achieve the quality
     requirements listed above through direct measurement as well as artifices
     such as accelerated life tests. The [*] attached hereto as Exhibit 1 lists
     related actions required of the supplier in detail. It is incumbent upon
     both parties to schedule this work such that the successful conclusion of
     these tests occurs well before WD builds and ships products containing said
     components.


                                                                     Page 3 of 5



Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

[WESTERN DIGITAL LOGO] [MARVELL LOGO]
                                                                   [*]
                                                            Statement of Quality
- --------------------------------------------------------------------------------

4.1  [*] qualification summary



     Activity                                     [*]         Who     ECD
     --------                                     ---        -----    ---
                                                             
     Wafer-level reliability 1st  wafer lot       [*]        Marv
       2nd wafer lot                                         Marv
       3rd wafer lot                                         Marv
     Device construction analysis                 [*]         WD
                                                             Marv

     High temperature operating life              [*]        Marv
        [*]                                                  Marv
        [*]                                                  Marv
        [*]                                                  Marv
     High temp storage [*]                        [*]        Marv
     Corner lot characterization                  [*]        Marv
     Rogue lot screening program                  [*]        Marv
     CPCP reporting program                       [*]        Marv
     Latch-up sensitivity                         [*]        Marv
     ESD sensitivity                              [*]        Marv
     JEDEC precondition                           [*]        Marv
     Pkg thermal cycle [*]                        [*]        Marv
     Pkg pressure cooker ([*]                     [*]        Marv
     Pkg construction analysis                    [*]        Marv


5.   QUALITY PROCESSES

     Western Digital firmly believes that high quality products germinate from
     high quality processes. In order to assure visibility into the quality of
     our suppliers' processes, we request certain manufacturing data be made
     available on a routine basis. This data is often expressed as process
     capability measurements, wherein [*] is viewed as a minimum to assure
     consistent product attributes. The following is a list of typical critical
     manufacturing parameters for [*]:



     Parameter                 Frequency
     ---------                 ---------
                            
     [*]                          [*]
     [*]                          [*]
     [*]                          [*]
     [*]                          [*]
     [*]                          [*]
     [*]                          [*]
     [*]                          [*]



                                                                     Page 4 of 5

Certain confidential information has been omitted from this Exhibit 10.58
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.58 where the omitted information
appeared in the original.

[WESTERN DIGITAL LOGO] [MARVELL LOGO]
                                                                   [*]
                                                            Statement of Quality
- --------------------------------------------------------------------------------

5.   Quality Processes (con't)
                           
     [*]                       [*]
     [*]                       [*]
     [*]                       [*]
     [*]                       [*]
     [*]                       [*]
     [*]                       [*]
     [*]                       [*]
     [*]                       [*]
     [*]                       [*]



6.   SUPPLIER QUALITY MEASUREMENT

     Suppliers of significant components are measured by WD in a formal ongoing
     process, culminating in the Quarterly Business Review (QBR) meeting. [*]%
     of the QBR rating is the Supplier Quality Rating (SQR), a method of rating
     and ranking suppliers according to achieving the required quality and
     reliability metrics. The most heavily-weighted elements of the SQR are [*].

7.   SIGNATURES FOR STATEMENT OF QUALITY

WESTERN DIGITAL TECHNOLOGIES                MARVELL  ASIA PTE LTD

/s/ DOUGLAS BLACKE                          /s/ DR. H. KUONG
- ------------------------------------        ------------------------------
Douglas Blacke                              Dr. H. Kuong
Sr. Director, Supplier Engineering          General Manager


/s/ MARTY FINKBEINER
- ----------------------------------          ------------------------------
Marty Finkbeiner
Vice President,  HDS Quality



                                                                     Page 5 of 5

exv99w1

EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in his capacity as Chief Executive Officer of Western Digital Corporation (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

• the Quarterly Report of the Company on Form 10-Q for the period ended March 28, 2003 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2003

/s/ Matthew E. Massengill

Matthew E. Massengill
Chief Executive Officer

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

exv99w2

EXHIBIT 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in his capacity as Chief Financial Officer of Western Digital Corporation (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

• the Quarterly Report of the Company on Form 10-Q for the period ended March 28, 2003 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2003

/s/ Scott Mercer

D. Scott Mercer
Chief Financial Officer

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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	•		the Quarterly Report of the Company on Form 10-Q for the period ended March 28, 2003 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

	•		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


	/s/ Matthew E. Massengill

	Matthew E. Massengill Chief Executive Officer