Governance Committee Charter

I. Purposes

The purposes of the Governance Committee (the “Committee”) are to (a) develop and recommend to the Board of Directors (the “Board”) a set of corporate governance principles applicable to the Company, (b) identify individuals qualified to become members of the Board and, consistent with criteria approved by the Board, recommend that the Board select the Director nominees for the next annual meeting of stockholders, and (c) oversee the evaluation of the Board and management.

II. Membership

The Committee shall be composed of three or more Directors, all of whom shall be independent Directors as determined by the Board pursuant to the rules of The NASDAQ Stock Market LLC (“Applicable Listing Rules”) (subject to any exceptions allowed by such rules and any waivers granted by such authorities). The Chair and members of the Committee shall be appointed annually by the Board. Vacancies shall be filled by election by the Board, and any member of the Committee may be removed by the Board. The Committee shall have the power and authority to delegate any of its duties or responsibilities herein to a subcommittee comprised of one or more members of the Committee.

III. Meetings

  1. The Committee shall meet in accordance with the annual meeting schedule or at the call of the Chair or a majority of the members. A majority of the members of the Committee shall constitute a quorum for the transaction of business.
  2. Procedures fixed by the Committee shall be subject to any applicable provision of the Company’s By-laws. Written minutes of each meeting shall be duly filed in the Company records, and reports of meetings of the Committee shall be made to the Board at its next regularly scheduled meeting following the Committee meeting and shall be accompanied by any recommendations to the Board approved by the Committee.

IV. Key Responsibilities

  1. Evaluate and recommend to the Board the size and composition of the Board and the size, composition and functions of the Board committees.
  2. Develop and recommend for approval by the Board a set of criteria for Board membership. Identify, evaluate and attract qualified individuals to become Directors who satisfy such criteria. Make recommendations to the Board regarding Director candidates for membership on the Board, including the slate of Director nominees to be proposed by the Board for election by the stockholders at the annual meeting of stockholders and any director nominees to be elected by the Board to fill interim director vacancies. Establish and follow procedures for the recommendation of Director candidates by the Company’s stockholders and the consideration by the Governance Committee of Director candidates so recommended.
  3. Assess the contributions and independence of incumbent Directors in determining whether to recommend them for re-election to the Board at the annual meeting of stockholders.
  4. Make recommendations to the Board on such matters as the retirement age, tenure and removal of Directors.
  5. Manage the Board performance review process and review the results with the Board on an annual basis.
  6. Develop and recommend to the Board a set of corporate governance principles and review and recommend changes to these principles, as necessary.
  7. Review and make recommendations to the Board regarding proposals of stockholders that relate to corporate governance.
  8. Recommend to the Board candidates for appointment to Board committees and consider periodically rotating Directors among the committees.
  9. Review directorships in other public or private companies (excluding charitable or non-profit organizations) held by or offered to Directors and executive officers of the Company.
  10. Review and assess the channels through which the Board receives information and the quality and timeliness of information received.
  11. Take such steps as the Committee deems necessary or appropriate with respect to assessments of the performance of the Board, each other Board committee, and itself, at least annually. Review and reassess the adequacy of this Charter at least annually.
  12. Oversee the evaluation of the Chief Executive Officer by the Board and the Compensation Committee.
  13. Develop and oversee the Chief Executive Officer succession planning process.
  14. Perform such other duties and responsibilities as are consistent with the purpose of the Committee and as the Board or the Committee deems appropriate.

V. Outside Advisors

The Committee shall have the authority to retain such outside counsel, experts and other advisors as it determines appropriate to assist it in the full performance of its functions, including the sole authority to retain and terminate search firms used to identify Director candidates, and to approve any such search firm’s fees and other retention terms.

Approved by Board of Directors: May 4, 2016

Executive Committee Charter

I. Purpose

The purpose of the Executive Committee (the "Committee") is to act on behalf of the Board of Directors (the "Board") between Board meetings.

II. Membership

The Committee shall be composed of three or more Directors, a majority of whom shall be independent Directors as determined by the Board pursuant to The NASDAQ Stock Market LLC ("NASDAQ") definition of independence. The Chief Executive Officer shall be the Chair of the Committee. The other members of the Committee shall be appointed annually by the Board on the recommendation of the Governance Committee. Vacancies shall be filled by approval of the Board on the recommendation of the Governance Committee, and any member of the Committee may be removed by the Board.

III. Meetings

  1. The Committee shall meet at the call of the Chair or a majority of the members. A majority of the members of the Committee shall constitute a quorum for the transaction of business. The passage of any resolution of the Committee shall require the affirmative vote of a majority of Committee members present and voting on such resolution who are not employees of the Company.
  2. Procedures fixed by the Committee shall be subject to any applicable provision of the Company's By-laws. Written minutes of each meeting shall be duly filed in the Company records, and reports of meetings of the Committee shall be made to the Board at its next regularly scheduled meeting following the Committee meeting. Actions taken by the Committee shall be promptly communicated to the Directors who are not members of the Committee.

IV. Key Responsibilities

The Committee shall have all the authority of the Board, except that it shall not have authority to:

  1. approve or adopt, or make a recommendation to the stockholders with respect to, any action or matter that is required under the Delaware General Corporation Law to be submitted to the stockholders;
  2. appoint any other committee of the Board or the members thereof;
  3. fill vacancies in the Board or in any committee thereof;
  4. amend or repeal the By-Laws, or adopt new By-Laws;
  5. amend or repeal any resolution of the Board that, by its express terms, shall not be so amended or repealed;
  6. fix the compensation of Directors for serving on the Board or any committee thereof;
  7. fix or amend the compensation, benefits or perquisites of the Chief Executive Officer;
  8. authorize a distribution to the stockholders of the Company except at a rate or in a periodic amount or within a price range determined by the Board;
  9. take any action that the Delaware General Corporation Law or the Company's By-Laws prohibit the Board from delegating to a committee; or
  10. take any action required by the rules or regulations of the Securities and Exchange Commission or NASDAQ to be approved by the full Board or by another committee of the Board.

Approved by Board of Directors: February 4, 2015

Compensation Committee Charter

I. Purposes

The purposes of the Compensation Committee (the “Committee”) are to (a) carry out responsibilities of the Board of Directors (the “Board”) relating to compensation of the Company’s executives and (b) produce the Compensation Committee Report for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations. The Committee shall communicate to the Company’s stockholders the Company’s compensation philosophy, policy and programs.

II. Membership

The Committee shall be composed of three or more Directors, all of whom, in the business judgment of the Board, shall (1) be independent directors as determined pursuant to the rules of The NASDAQ Stock Market LLC (“Applicable Listing Rules”) (subject to any exceptions allowed by such rules and any waivers granted by such authorities), (2) satisfy such additional eligibility requirements for membership on the Committee as may be required from time to time by the Applicable Listing Rules and (3) qualify as “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Act”). In order to qualify any compensation as “performance-based” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), at least two members of the Committee must qualify as “outside directors” within the meaning of Section 162(m) of the Code. The Chair and members of the Committee shall be appointed annually by the Board on recommendation of the Governance Committee. Vacancies shall be filled by approval of the Board on recommendation of the Governance Committee, and any member of the Committee may be removed by the Board.

The Committee shall have the power and authority to delegate any of its duties or responsibilities herein to a subcommittee comprised of one or more members of the Committee.

III. Meetings

  1. The Committee shall meet in accordance with the annual meeting schedule or at the call of the Chair or a majority of the members. A majority of the members of the Committee shall constitute a quorum for the transaction of business.
  2. Procedures fixed by the Committee shall be subject to any applicable provision of the Company’s By-laws. Written minutes of each meeting shall be duly filed in the Company records, and reports of meetings of the Committee shall be made to the Board at its next regularly scheduled meeting following the Committee meeting and shall be accompanied by any recommendations to the Board approved by the Committee.

IV. Key Responsibilities

  1. In consultation with management and the Board, define an executive compensation policy that is designed to (a) attract, retain and appropriately reward key executives of the Company, (b) link compensation with achievement of the Company’s business objectives and (c) align the interests of key executives with the goal of long-term stockholder value creation.
  2. Annually (or, in the case of bonus amounts, such other measurement period, as applicable) review and approve corporate goals and objectives relevant to the base salary, bonus amount and other compensation of the Chief Executive Officer (“CEO”) and the Company’s other officers (as defined in Rule 16a-1(f) of the Act).
  3. Evaluate the performance of each of the CEO and the Company’s other officers (as defined in Rule 16a-1(f) of the Act) in light of those goals and objectives, and determine and approve the compensation level, including base salary, bonus amount and other compensation, if any, of each such officer based on this evaluation and other relevant factors. Evaluation of the CEO’s performance shall be made in consultation with the Governance Committee. The CEO shall not be present during voting or deliberations on the CEO’s compensation.
  4. Make recommendations to the Board with respect to incentive compensation plans and equity-based plans that require Board approval, including overseeing the development of new compensation plans and the revision of old plans.
  5. Administer the Company’s equity-based plans, and serve as the committee of the Board authorized to approve restricted stock awards, stock option grants and other equity-based or incentive awards under these plans, including any performance criteria relating to these plans or any awards.
  6. Where required by the terms of the plans, review the Company’s employee benefit plans and, if Board approval is required to amend any such plans, either recommend plan changes to the Board or amend such plans, subject to stockholder approval where required.
  7. Recommend to the Board retainer, other compensation, and attendance fees, including Board committee attendance fees, for non-employee Directors.
  8. Annually (a) review and discuss with the Company’s management the Compensation Disclosure and Analysis (CD&A) to be included in the Company’s annual proxy statement and determine whether to recommend to the Board of Directors that the CD&A be included in the proxy statement and (b) produce the Compensation Committee Report for inclusion in the Company’s proxy statement as required by and in compliance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The Committee’s review may include, to the extent the Committee deems appropriate and without limiting other factors the Committee may consider relevant in the circumstances, the results of say-on-pay advisory votes by the Company’s stockholders.
  9. Periodically review and approve any compensation clawback policy or stock ownership guidelines of the Company, or any amendment thereto, that is applicable to the Company’s executive officers.
  10. Periodically review the Company’s compensation policies and practices in order to assess whether such policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. In connection with such review, the Committee may, as it considers appropriate, consult with, or receive a report from, the Company’s management concerning compensation practices and policies for the Company’s non-executive officers.
  11. Evaluate annually the performance of the Committee and the adequacy of this Charter.
  12. Perform such other duties and responsibilities as are consistent with the purpose of the Committee and as the Board or the Committee deems appropriate.

The foregoing does not limit any authority conferred on the Committee pursuant to the terms of any compensation or benefit plan or, to the extent the Committee is the administrator of any compensation or benefit plan, as the administrator of such plan in accordance with the terms of the plan.

V. Outside Advisors

The Committee may, in its sole discretion after considering such independence factors as may be required by the Applicable Listing Rules or applicable SEC rules, retain or obtain the advice of a compensation consultant, legal counsel or other advisor as it determines necessary or appropriate to assist it in the full performance of its functions, including the sole authority to retain and terminate compensation consultants to assist in the evaluation of Director, CEO or other senior executive compensation. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel or other advisor retained by the Committee, including sole authority to approve the consultant’s, legal counsel’s or advisor’s fees and other retention terms. The Company shall provide appropriate funding, as determined by the Committee, for payment of reasonable compensation to any consultant, legal counsel or other advisor retained by the Committee.

Approved by Board of Directors: February 11, 2016

Audit Committee Charter

I. Purposes

The purposes of the Audit Committee (the “Committee”) shall be to:

  • assist the Company’s Board of Directors (the “Board”) in discharging its oversight responsibility relating to: (i) the accounting and financial reporting processes of the Company and its subsidiaries and the audit of the Company’s financial statements; (ii) the Company’s compliance with legal and regulatory requirements; (iii) the independent accountants’ qualifications and independence; and (iv) the performance of the Company’s internal audit function and the Company’s independent accountants; and
  • prepare the report required by the rules of the Securities and Exchange Commission (the “SEC”) to be included in the Company’s annual proxy statement.

 

II. Membership

  1. The Committee shall be composed of three or more directors, all of whom shall be independent Directors, as defined by the rules of The NASDAQ Stock Market LLC (“Applicable Listing Rules”) and applicable rules of the SEC in effect from time to time (subject to any exceptions allowed by such rules and any waivers granted by such authorities). The Chair and members of the Committee shall be appointed annually by the Board on recommendation of the Governance Committee. Vacancies shall be filled by approval of the Board on recommendation of the Governance Committee, and any member of the Committee may be removed by the Board.
  2. Each member of the Committee must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement and cash flow statement, and at least one member shall be an “audit committee financial expert,” as determined by the Board pursuant to rules promulgated by the SEC. Additionally, no member of the Committee shall have participated in the preparation of the financial statements of the Company in the past three years.
  3. No member of the Committee shall serve simultaneously on the audit committee of more than three public companies (including the Company) except with the prior approval of the Board.

 

III. Meetings

  1. The Committee shall meet at least four times a year in accordance with the annual meeting schedule or at the call of the Chair or a majority of the members. A majority of the members of the Committee shall constitute a quorum for the transaction of business.
  2. The Committee shall meet separately in executive session, periodically, with management, the Company’s principal internal auditor (or other personnel responsible for the internal audit function) and the independent accountants.
  3. Procedures fixed by the Committee shall be subject to any applicable provision of the Company’s By-laws. Written minutes of each meeting shall be duly filed in the Company records, and reports of meetings of the Committee shall be made to the Board no later than the next regularly scheduled Board meeting following the Committee meeting and shall be accompanied by any recommendations to the Board approved by the Committee.

 

IV. Key Responsibilities

1. Independent Accountants

  • Be solely and directly responsible for the appointment, compensation, retention and oversight of the work of the independent accountants (including resolution of disagreements between management and the independent accountants regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company and, where appropriate, the termination and replacement of the independent accountants. The independent accountants shall report directly to the Committee.
  • At least annually, evaluate the independent accountants’ qualifications, performance and independence, including a review and evaluation of the lead partner of the independent accountant. Confirm that the lead or coordinating audit partner having primary responsibility for the audit or review and the concurring or reviewing audit partner of the independent accountants are rotated at least every five years and that other audit partners (as defined by the SEC) are rotated at least every seven years in accordance with rules promulgated by the SEC. Consider whether there should also be a regular rotation of the independent accountants.  As part of the Committee’s annual evaluation of the independent accountants, discuss with the Company’s principal internal auditor (or other personnel responsible for the internal audit function) and management their views as to the competence, performance and independence of the independent accountant.
  • Review, evaluate and approve the annual engagement proposal of the independent accountants (including the proposed scope, procedures and timing of the annual audit).
  • Pre-approve all auditing services and all non-audit services permitted to be performed by the independent accountants. Such pre-approval may be given as part of the Committee’s approval of the scope of the engagement of the independent accountants or on an engagement-by-engagement basis or pursuant to pre-established policies. In accordance with Section 5 of this Charter, the Chairman of the Audit Committee is hereby delegated authority to pre-approve audit and permitted non-audit and tax services and associated fees up to a maximum for any one audit or non-audit service of $50,000. The Chairman shall report such approval decisions to the full Committee at its next regularly scheduled meeting.
  • Obtain and review, at least annually, a report by the independent accountants describing:  (i) the independent accountants’ internal quality-control procedures; and (ii) any material issues raised by the most recent internal quality-control review, or peer review, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, with respect to one or more independent audits carried out by the independent accountants, and any steps taken to deal with any such issues.
  • Ensure the independence of the independent accountants pursuant to all applicable laws and regulations.   Be responsible for (i) ensuring the Committee’s receipt from the independent accountants of a formal written statement delineating all relationships between the independent accountants and the Company, consistent with the applicable requirements of the Public Company Accounting Oversight Board, (ii) actively engaging in a dialogue with the independent accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent accountants and (iii) taking, or recommending that the full Board take, appropriate action to oversee the independence of the independent accountants.
  • Obtain and review prior to the filing of any audit report by the Company’s independent accountants a report from the independent accountants regarding: (i) all critical accounting policies and procedures to be used by the Company; (ii) all alternative treatments within generally accepted accounting principles (“GAAP”) for policies and practices related to material items that have been discussed with the Company’s management, including ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent accountants; and (iii) all other material written communications between the independent accountants and management, including any management letter or schedule of unadjusted differences.
  • Review and discuss with the independent accountants any difficulties the independent accountants encountered in the course of their audit work, including any restrictions on the scope of the independent accountants’ activities or on access to requested information, and any significant disagreements with management and management’s response to such problems or difficulties.
  • Establish policies for the hiring of any current or former employee of the independent accountants to ensure the independence of the independent accountants pursuant to all applicable laws and regulations.

 

2. Financial Reporting and Reporting Processes

  • Review and discuss with management and the independent accountants the annual audited and quarterly financial statements of the Company and the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” prior to filing such financial statements with the SEC or public distribution thereof, including (as appropriate): (i) major issues regarding accounting principles and financial statement presentations, any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies; (ii) analyses prepared by management and/or the independent accountants setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative accounting methods on the financial statements in accordance with GAAP; and (iii) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company.
  • Discuss with the independent accountants the independent accountants’ judgment about the quality, not just acceptability, of the accounting principles applied in the Company’s financial reporting.
  • Review and discuss generally with management the general types of information to be disclosed and the type of presentation to be made in the Company’s earnings press releases, including a review of the use of any “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance, if any, provided to analysts and ratings agencies.
  • Review periodically the adequacy of the Company’s accounting and financial personnel resources, including the budget, organization and quality of personnel within the Company’s finance function.
  • Periodically review and discuss with the principal internal auditor of the Company the scope and results of internal audit program.
  • Periodically review and discuss with management, the principal internal auditor and the independent accountants the Company’s internal control over financial reporting, including:  (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize, and report financial information; (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls; and (iii) any changes in internal controls that could materially affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
  • Periodically review and discuss with the independent accountants the performance of the internal audit function and the responsibilities, budget, activities, organizational structure and qualifications of the personnel of the internal audit function.
  • Review and consult with management regarding the appointment, reassignment, replacement, compensation or dismissal of the Company’s principal internal auditor.
  • Review and discuss with the Company’s independent accountants any other matters required to be communicated to the Committee by the independent accountants pursuant to applicable rules of the Public Company Accounting Oversight Board.
  • Review reports to management prepared by the independent accountants or the principal internal auditor (or other personnel responsible for the internal audit function) and any responses to the same by management.
  • Review and consider any other matters relative to the audit of the Company’s accounts and the preparation of its financial statements and reports that the Committee, in its discretion, deems appropriate.
  • Make a recommendation to the Board as to whether the annual audited financial statements should be included in the Company’s Annual Report on Form 10-K.

 

3. Legal and Regulatory Compliance

  • Review and discuss the Company’s policies with respect to risk assessment and risk management.
  • Prepare an audit committee report as required by the SEC to be included in the Company’s annual proxy statement.
  • Provide oversight of the Company’s Ethics and Compliance Program. Regularly receive reports from the Chief Compliance Officer detailing the activities of the Ethics and Compliance Program and reporting on significant allegations of misconduct, violations of law, and any significant investigations that may involve the Company.
  • Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting and auditing matters.
  • Review material pending legal proceedings involving the Company and other material contingent liabilities.
  • Review reports and disclosures of significant conflicts of interest and related-party transactions, and consider for waiver, ratification or approval, as applicable, any such conflicts of interest or related party transactions, to the extent required by the Company’s Code of Business Ethics, Global Code of Conduct or Related Person Transactions Policy.
  • Periodically review and discuss with management the Company's policies and procedures for and use of swaps or other derivative instruments for hedging risks and for other purposes and, in connection with such responsibility, review and approve, at least annually, decisions by the Company and its subsidiaries to enter into swaps that are subject to clearing and exchange trading and execution requirements in reliance on the “end-user exception” under the Commodity Exchange Act or regulations of the Commodity Futures Trading Commission promulgated thereunder; provided, however, that such review and approval may occur annually on a general basis and need not occur on a swap-by-swap basis.

 

4. Evaluations; Investigations; Advisers

  • Evaluate annually the performance of the Committee and the adequacy of this Charter, and recommend to the Board any proposed changes to this Charter.
  • The Committee may also, from time to time or as directed by the Board, direct and review special investigations, receive periodic reports on legal and tax matters, review the Company’s legal compliance policies and practices, including its Global Code of Conduct, and report to the Board as appropriate concerning these reviews, investigations and reports.
  • The Committee shall have the authority to retain such outside counsel, accountants, experts and other advisors as it determines appropriate to assist the Committee in the performance of its functions. The Committee is specifically empowered to retain these advisors without seeking approval from the Board, and in connection therewith to receive appropriate funding, determined by it, from the Company.
  • The Committee has the power to determine the level and cost of ordinary administrative expenses necessary or appropriate in carrying out its duties, with such costs to be borne by the Company.

 

5. Delegation of Authority

The Committee may form and delegate authority to subcommittees consisting of one or more members when it deems appropriate, including the authority to grant pre-approvals of audit and permitted non-audit and tax services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Committee at its next regularly scheduled meeting. 

Approved by Board of Directors: February 2, 2017

Contact WD Board

Write The Board

*Michael Ray, Secretary
Western Digital Corporation
3355 Michelson Drive, Suite 100
Irvine, CA 92612

*The name of any specific intended Board recipient should be noted in the communication, including whether the communication is intended only for the Company's lead director or non-management directors.