SanDisk 2013 Annual Report Download - page 201

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
stock appreciation rights may be granted to officers and other employees, non-employee board members
and independent consultants, and (ii) the stock issuance and cash bonus program under which eligible
persons may, at the discretion of the plan administrator, be issued shares of the Company’s common stock
pursuant to restricted stock awards, restricted stock units (‘‘RSUs’’) or other share-based awards which
vest upon the completion of a designated service period or the attainment of pre-established performance
milestones, be awarded cash bonus opportunities which are earned through the attainment of
pre-established performance milestones, or be issued shares of the Company’s common stock through
direct purchase or as a bonus for services rendered to the Company. Options eligible for exercise may be
exercised for shares of the Company’s common stock at any time prior to the expiration of the seven-year
option term or any earlier termination of those options in connection with the optionee’s cessation of
service with the Company. Outstanding RSU awards under the 2013 Plan have dividend equivalent rights
which entitle holders of RSUs to the same dividend value per share as holders of common stock. Dividend
equivalent rights are subject to the same vesting and other terms and conditions as the corresponding
unvested RSUs. Dividend equivalent rights are accumulated and paid when the underlying shares vest. A
total of 20,000,000 shares of the Company’s common stock have initially been reserved for issuance under
the 2013 Plan. The 2013 Plan share reserve may be increased by up to 10,000,000 shares of common stock
to the extent that outstanding share-based awards under the 1995 Stock Option Plan, the 1995
Non-Employee Directors Stock Option Plan, and the 2005 Incentive Plan expire, terminate or lapse, of
which 349,675 shares of common stock as of December 29, 2013 had been added to the 2013 Plan share
reserve. All options granted under the 2013 Plan are granted with an exercise price equal to the fair market
value of the common stock on the date of grant and will expire seven years from the date of grant.
2005 Incentive Plan. The 2005 Incentive Plan terminated on June 12, 2013 and no further share-based
awards were made under this plan after that date. Share-based awards that were outstanding under this
plan on December 29, 2013 continue to be governed by their existing terms. Options eligible for exercise
may be exercised for shares of the Company’s common stock at any time prior to the expiration of the
seven-year option term or any earlier termination of those options in connection with the optionee’s
cessation of service with the Company. Outstanding RSU awards under this plan have dividend equivalent
rights which entitle holders of RSUs to the same dividend value per share as holders of common stock.
Dividend equivalent rights are subject to the same vesting and other terms and conditions as the
corresponding unvested RSUs.
1995 Stock Option Plan and 1995 Non-Employee Directors Stock Option Plan. Both of these plans
terminated on May 27, 2005 and no further option grants were made under the plans after that date.
Options eligible for exercise that were outstanding under these plans on December 29, 2013 continue to be
governed by their existing terms and may be exercised for shares of the Company’s common stock at any
time prior to the expiration of the ten-year option term or any earlier termination of those options in
connection with the optionee’s cessation of service with the Company.
2005 Employee Stock Purchase Plan. The 2005 Employee Stock Purchase Plan (‘‘ESPP’’) was approved
by the stockholders on May 27, 2005. The ESPP allows eligible employees to purchase shares of the
Company’s common stock at the end of each six-month offering period at a purchase price equal to 85% of
the lower of the fair market value per share on the start date of the offering period or the fair market value
per share on the purchase date. The ESPP has 10,000,000 shares reserved for issuance, of which 4,345,666
shares were available to be issued as of December 29, 2013. In fiscal years 2013, 2012 and 2011, a total of
623,887 shares, 684,646 shares and 613,452 shares of common stock, respectively, were issued under this
plan.
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Annual Report