SanDisk 2010 Annual Report Download - page 73

Proxy Statement
Dr. Harari served as the Chairman of the Board of Directors until December 31, 2010. As an employee-
director, Dr. Harari did not receive additional compensation for his services as a director in fiscal 2010.
Mr. Mehrotra served as a member of the Board of Directors beginning as of July 21, 2010. As an employee-
director, Mr. Mehrotra did not receive additional compensation for his services as a director in fiscal 2010.
Compensation of Named Executive Officers
The Summary Compensation Table—Fiscal 2008—2010 above quantifies the value of the different forms of
compensation earned by or awarded to the Named Executive Officers in fiscal 2010, 2009 and 2008. The primary
elements of each Named Executive Officer’s total compensation reported in the table are base salary, an annual
cash incentive award in the form of either a bonus or a non-equity incentive plan compensation award and long-
term equity incentives consisting of stock options and restricted stock units. The Named Executive Officers also
earned or were paid the other benefits listed in column (i) of the Summary Compensation Table—Fiscal 2008—
2010, as further described in footnote (4) to the table.
The Summary Compensation Table—Fiscal 2008—2010 should be read in conjunction with the tables and
narrative descriptions that follow. A description of the material terms of each Named Executive Officer’s base
salary and annual bonus is provided immediately following this paragraph. The table of Grants of Plan-Based
Awards in Fiscal 2010, and the description of the material terms of the stock and stock options granted in fiscal
2010 that follows the table, provides information regarding the long-term equity incentives awarded to the
Named Executive Officers in fiscal 2010. The tables of “Outstanding Equity Awards at Fiscal 2010 Year-End”
and “Option Exercises and Stock Vested in Fiscal 2010” provide further information on the Named Executive
Officers’ potential realizable value and actual value realized with respect to their equity awards. The discussion
of the potential payments due upon a termination of employment or change in control that follows is intended to
further explain the potential future payments that are, or may become, payable to the Named Executive Officers
under certain circumstances.
Description of Employment Agreements, Salary and Bonus Amounts
As indicated above, none of the Named Executive Officers is employed pursuant to an employment
agreement. As a result, their base salary and bonus opportunities are not fixed by contract. Instead, generally in
the first quarter of each fiscal year, the Compensation Committee establishes the base salary level for each of the
Named Executive Officers. In making its determination, the Compensation Committee considers the factors
discussed above under “Current Executive Compensation Program Elements—Base Salaries.” After the
completion of fiscal 2010, the Compensation Committee evaluated the performance of the Company and the
individual performance of each Named Executive Officer during the year, and made bonus payments in March
2011 to each of the Named Executive Officers with respect to fiscal 2010. The material terms of the bonuses paid
with respect to fiscal 2010 are described above under “Current Executive Compensation Program Elements—
Annual Cash Incentive Award.”
Consistent with the Company’s philosophy that a substantial portion of compensation should be contingent
on the Company’s performance, equity and non-equity incentive compensation, including bonus amounts, for
Named Executive Officers in fiscal 2010, the value of which, as described below under “Description of Plan-
Based Awards,” is significantly dependent upon Company performance, comprised a large percentage of total
compensation. The Company believes this allocation of base salary and incentive compensation in proportion to
total compensation is appropriate to balance the Company’s dual goals of aligning the interests of executives and
stockholders and providing predictable benefit amounts that reward an executive’s continued service.
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