SanDisk 2014 Annual Report Download - page 176

SANDISK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Share-based Benefit Plans
2013 Incentive Plan. On June 12, 2013, the Company’s stockholders approved the 2013 Incentive Plan
(‘‘2013 Plan’’). Shares of the Company’s common stock may be issued under the 2013 Plan pursuant to two
separate equity incentive programs: (i) the discretionary grant program under which stock options and
stock appreciation rights (‘‘SARs’’) 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 and the 2013 Plan
expire, terminate or lapse, of which 762,444 shares of common stock as of December 28, 2014 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 as of December 28, 2014 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. This plan 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 as of
December 28, 2014 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 originally
approved by the stockholders on May 27, 2005 and amended and restated with approval by the
stockholders on June 19, 2014. 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
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