SanDisk 2005 Annual Report Download - page 46
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Proxy Statement
The agreements further provide that if a covered officer is subject to excise taxes under Section 4999 of
the Internal Revenue Code of 1986, the officer will be entitled to receive an additional payment (net of
income, employment and excise taxes) to compensate the executive for any such excise tax.
The agreements will each be effective until either mutually terminated by the officer and the Company or
upon a termination of the officer's employment that does not constitute a Change of Control Termination (as
defined in the agreement) subject to a maximum of 10 years from the effective date.
Change of Control Benefits Agreement with Dr. Eli Harari
The Company entered into a Change of Control Benefits Agreement with Dr. Eli Harari, its Chief
Executive Officer and President, effective as of May 20, 2004, as amended in August 2005. The Company's
agreement with Dr. Harari is substantially identical to the Change of Control Benefits Agreements with its
executive officers as described above, except that Dr. Harari's agreement provides that the cash payment
component of the severance benefits is equal to the sum of (A) two times his annual base compensation at the
time of the Change of Control or the time of termination, whichever annual base salary amount is greater, plus
(B) 200% of his annual target bonus in effect for the year of the termination.
2005 Plan
In addition, the 2005 Plan provides that the outstanding awards held by the Chief Executive Officer and
the Company's other executive officers will immediately accelerate in full, and all unvested shares of Common
Stock at the time held by such individuals under the 2005 Plan will immediately vest, in the event their
employment is to be terminated (whether involuntarily or through a forced resignation) within
twelve (12) months after any acquisition of the Company by merger or asset sale in which these options and
shares do not otherwise vest. The Compensation Committee of the Board of Directors also has the authority as
plan administrator of the 2005 Plan to provide for the accelerated vesting of the outstanding awards under the
2005 Plan held by the Chief Executive Officer and the Company's other executive officers and the immediate
vesting of all unvested shares of Common Stock at the time held by such individuals under the 2005 Plan, in
the event their employment is to be terminated (whether involuntarily or through a forced resignation)
following a successful tender offer for more than fifty percent (50%) of the Company's outstanding Common
Stock or a change in the majority of the Board as a result of one or more contested elections for Board
membership.
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