SanDisk 2012 Annual Report Download - page 37

Proxy Statement
Incentive Programs. The 2013 Plan consists of two separate equity incentive programs: (i) the
Discretionary Grant Program and (ii) the Stock Issuance and Cash Bonus Program. The principal features of each
program are described below.
Administration. The Compensation Committee will have the exclusive authority to administer the
Discretionary Grant and Stock Issuance and Cash Bonus Programs with respect to option grants, stock issuances,
other share-based awards and cash bonuses for the Company’s Section 16 Officers and Board members and will
also have the authority to make grants, awards and issuances under those programs to all other eligible
individuals. Administration of the Discretionary Grant Program and Stock Issuance and Cash Bonus Program
with respect to all other persons eligible to participate in those programs may, at the Board’s discretion, be vested
in the Compensation Committee or a Secondary Board Committee, or the Board may retain the power to
administer those programs with respect to all such persons. However, any discretionary option grants, stock
appreciation rights, stock issuances or other share-based awards for members of the Compensation Committee
must be authorized by a disinterested majority of the Board. Furthermore, the authority to grant options pursuant
to the Discretionary Grant Program with respect to employees other than Section 16 Officers may, at the Board’s
discretion, be vested in a Secondary Executive Committee to the extent permitted by Section 157(c) of the
Delaware General Corporation Law. The term “plan administrator,” as used in this summary, will mean the
Company’s Compensation Committee and any secondary committee, to the extent each such entity is acting
within the scope of its administrative authority under the 2013 Plan.
Eligibility. Executive officers and employees, as well as independent consultants and contractors, in our
employ or in the employ of our parent or subsidiary companies (whether now existing or subsequently
established) will be eligible to participate in the Discretionary Grant and Stock Issuance and Cash Bonus
Programs. The Non-Employee Directors will also be eligible to participate in these programs. In addition, we
have established internal compensation guidelines, which are subject to change from time to time, pursuant to
which only employees who meet certain requirements would be eligible to be considered for a share-based
award. As of March 15, 2013, approximately 7,600 persons (including four (4) executive officers and seven
(7) Non-Employee Directors) were eligible to participate in the Discretionary Grant and Stock Issuance and Cash
Bonus Programs pursuant to the terms of the 2013 Plan, of which approximately 3,900 persons (including four
(4) executive officers and seven (7) Non-Employee Directors) were eligible to be considered for share-based
awards under those programs pursuant to our internal guidelines in effect as of such date.
Securities Subject to 2013 Plan. If the 2013 Plan is approved by our stockholders, 20,000,000 shares of our
Common Stock will initially be reserved for issuance over the term of the plan. As indicated above, the share
reserve may be increased by up to an additional 10,000,000 shares of Common Stock, to the extent any options
outstanding under the Predecessor Plans at the time of the Annual Meeting subsequently expire or terminate
unexercised prior to vesting. As of March 15, 2013, approximately 14.9 million shares were subject to awards
outstanding under the Predecessor Plans and an additional approximately 9.7 million shares remained available
for future grant under the 2005 Plan. Additionally, approximately 0.6 million shares were subject to awards
granted and outstanding under the Assumed Plans and an additional 61,688 shares remained available for future
grant under the Assumed Plans.
If our stockholders approve the 2013 Plan at the Annual Meeting, other than automatic Non-Employee
Director grants under the 2005 Plan, which will take effect immediately upon the election of the Non-Employee
Directors to the Board of Directors at the Annual Meeting, and other than awards established under the
Company’s annual cash incentive program for fiscal year 2013, no further awards will be made under the 2005
Plan or the Assumed Plans and the portion of the share reserve under the 2005 Plan and the Assumed Plans
which is in excess of the then-outstanding awards under the 2005 Plan and the Assumed Plans will be cancelled
upon such stockholder approval. Stockholder approval of the 2013 Plan will not affect any awards outstanding
under the Predecessor Plans, and those awards will remain outstanding in accordance with their terms.
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