If the effective closing price of a share of WDC’s common stock on May 31, 2016 is higher than your current enrollment price, then you will remain enrolled in your current offering period for the next purchase period at the same enrollment price. Your total contributions during the current 6-month purchase period will be used to purchase a number of shares of WDC’s common stock on May 31, 2016, determined by dividing your total contributions by your enrollment price (less a 5% discount), subject to the maximum amount permitted by applicable tax law and the 2005 ESPP Plan.
If the effective closing price of a share of WDC’s common stock on May 31, 2016 is lower than your current enrollment price, then your total contributions during the current 6-month purchase period will still be used to purchase shares of WDC’s common stock on May 31, 2016. The number of shares purchased will be determined by dividing your total contributions by the effective closing price of a share of WDC’s common stock on May 31, 2016 (less a 5% discount), subject to the maximum amount permitted by applicable tax law and the 2005 ESPP Plan. In addition, following your purchase, you will be automatically terminated from your current offering period and reenrolled in a new 24-month offering period beginning on June 1, 2016 with a new enrollment price equal to the closing price of a share of WDC’s common stock on June 1, 2016. This automatic termination and reenrollment is referred to as the ESPP’s “automatic reset feature” and is designed to give participants the benefit of a lower enrollment price without forfeiting a purchase for the current purchase period.