SanDisk 2006 Annual Report Download - page 21

Recommendation of the Board of Directors
The Board believes that Proposal No. 1 is in the Company’s best interests and in the best interests of its
stockholders and recommends a vote FOR the election of all of the above nominees.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed Ernst & Young LLP as the Company’s
independent registered public accounting firm for the fiscal year ending December 30, 2007, and is asking the
Company’s stockholders to ratify this appointment. The affirmative vote of the holders of a majority of the shares
present or represented by proxy at the meeting and entitled to vote on this Proposal No. 2 will be required to ratify
the selection of Ernst & Young LLP.
In the event the stockholders fail to ratify the appointment, the Audit Committee of the Board of Directors will
reconsider its appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm
for the fiscal year ending December 30, 2007. Even if this appointment is ratified, the Audit Committee, in its
discretion, may direct the appointment of a different independent registered public accounting firm at any time
during the year if the Audit Committee determines that such a change would be in the best interest of the Company
and its stockholders.
Ernst & Young LLP has audited the Company’s financial statements annually since 1991. Its representatives
are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions.
Principal Accountant Fees and Services
The following is a summary of the Ernst & Young LLP fees incurred by the Company for professional services
rendered during the 2006 and 2005 fiscal years:
2006 2005
(a) Audit Fees ............................................ $3,424,000 $1,546,000
(b) Audit-Related Fees ...................................... 178,000 101,000
(c) Tax Fees ............................................. 474,000 230,000
(d) All Other Fees ......................................... 6,000 5,000
(a) Audit fees consist of professional services provided in connection with the integrated audit of the Company’s
financial statements and review of the Company’s quarterly financial statements that include professional
services provided in connection with the annual audit of the Company’s internal control over financial
reporting. The fees for fiscal 2006 include professional services provided in connection with the msystems and
Matrix acquisitions, the convertible debt offering, and new and existing statutory audits of subsidiaries or
affiliates of the Company.
(b) Audit-related fees consist primarily of accounting consultations, services provided in connection with reg-
ulatory filings, technical accounting guidance and other attestation services.
(c) For fiscal years 2006 and 2005, tax fees principally included tax compliance fees, including expatriate
compliance services. Total compliance fees were $302,000 and $221,000 for 2006 and 2005, respectively. Tax
fees also include tax advice and tax planning fees of $172,000 and $9,000 for fiscal 2006 and 2005, respectively.
(d) All other fees includes online research tools and other services.
All of the 2006 services described above were pre-approved by the Audit Committee to the extent required by
Section 10A of the Securities Exchange Act of 1934, as amended, which requires audit committee pre-approval of
audit and non-audit services provided by the Company’s independent auditors. In accordance with Section 10A
under the Securities Exchange Act of 1934, as amended, the Audit Committee may delegate to any member of the
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