SanDisk 2006 Annual Report Download - page 29

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FORM 10-K
The Company filed an Annual Report on Form 10-K with the SEC on February 28, 2007. Stockholders
may obtain a copy of this report, without charge, by writing to Investor Relations at the Company’s principal
executive offices located at 601 McCarthy Boulevard, Milpitas, California 95035. The Annual Report on
Form 10-K is also available on the Company’s website at www.sandisk.com.
AUDIT COMMITTEE REPORT
The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with
the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future
filings with the Securities and Exchange Commission, or subject to the liabilities of Section 18 of the Securities
Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference
into a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.
The following is the report of the Audit Committee with respect to the Company’s audited financial statements
for the fiscal year ended December 31, 2006 included in the Company’s Annual Report on Form 10-K for that year.
The Audit Committee has reviewed and discussed the audited financial statements with management of the
Company.
The Audit Committee has discussed with the Company’s independent registered accounting firm, Ernst &
Young LLP, the matters required to be discussed by SAS 61 (“Codification of Statements on Auditing Standards,
AU Section 380”), as amended, which include, among other items, matters related to the conduct of the audit of the
Company’s financial statements.
The Audit Committee has received the written disclosures and the letter from Ernst & Young LLP required by
Independence Standards Board Standard No. 1 (“Independence Discussions with Audit Committees”), as amended,
and has discussed with Ernst & Young LLP the independence of Ernst & Young LLP from the Company.
Based on the review and discussions referred to above in this report, the Audit Committee recommended to the
Company’s Board of Directors that the audited financial statements be included in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2006 for filing with the Securities and Exchange Commission.
Submitted by the Audit Committee
of the Board of Directors
Catherine P. Lego (Chair)
Irwin Federman
Steven J. Gomo
COMPENSATION DISCUSSION AND ANALYSIS
This section contains a discussion of the material elements of compensation awarded to, earned by or paid to
the principal executive and principal financial officers of the Company, our three other most highly compensated
individuals who were serving as executive officers as of December 31, 2006, and Nelson Chan, who would have
been among our three other most highly compensated individuals but for the fact that he was not serving as an
executive officer as of December 31, 2006. These individuals are referred to as the “Named Executive Officers” in
this Proxy Statement.
The Company’s current executive compensation programs are determined and approved by the Compensation
Committee of the Board. None of the Named Executive Officers is a member of the Compensation Committee. As
contemplated by the Charter of the Compensation Committee, the Company’s Chief Executive Officer recommends
to the Compensation Committee the base salary, annual bonus and long-term compensation levels for the other
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