SanDisk 1999 Annual Report Download - page 44

Had compensation cost for the Company’s stock-based compensation
plans been determined based on the fair value at the grant dates for
awards under those plans consistent with the method of SFAS 123,
the Company’s net income and earnings per share would have been
reduced to the pro forma amounts indicated below:
Because SFAS 123 is applicable only to options granted subsequent
to December 31, 1994, its pro forma effect was not fully reflected
until 1999.
SHAREHOLDER RIGHTS PLAN
On April 21, 1997, the Company adopted a shareholder rights plan
(the Rights Agreement). Under the Rights Agreement, rights were
distributed as a dividend at the rate of one right for each share of
common stock of the Company held by stockholders of record as of
the close of business on April 28, 1997. The rights will expire on
April 28, 2007 unless redeemed or exchanged. Under the Rights
Agreement, each right will initially entitle the registered holder to buy
one one-fiftieth of a share of Series A Junior Participating Preferred
Stock for $250.00. The rights will become exercisable only if a per-
son or group (other than Seagate Technology, Inc., which is permitted
to own up to 25 percent of outstanding common stock of the
Company) acquires beneficial ownership of 15 percent or more of the
Company’s common stock or commences a tender offer or exchange
offer upon consummation of which such person or group would bene-
ficially own 15 percent or more of the Company’s common stock.
WARRANTS
The Company has periodically granted warrants in connection with
the sale of its stock and certain lease and bank agreements. The
Company had no warrants outstanding at December 31, 1999.
During 1999, the Company issued 59,340 shares of common stock
for no proceeds in the net issuance of shares upon the exercise of
64,246 warrants with an exercise price of $1.65 per share.
STOCK SPLIT
On January 26, 2000, the Company’s board of directors approved a
2-for-1 stock split, in the form of a 100% stock dividend, payable to
stockholders of record as of February 8, 2000. The dividend was paid
and the split was effected on February 22, 2000. Shares, per share
amounts, common stock at par value and additional paid in capital
have been restated to reflect the stock split for all periods presented.
NOTE 5:
Retirement Plan
Effective January 1, 1992, the Company adopted a tax-deferred
savings plan, the SanDisk 401(k) Plan, for the benefit of qualified
employees. The plan is designed to provide employees with an accu-
mulation of funds at retirement. Qualified employees may elect to
make contributions to the plan on a monthly basis. The Company
may make annual contributions to the plan at the discretion of the
Board of Directors. The Company contributed $105,000 for the
plan year ended December 31, 1999. No contributions were made
by the Company for the years ended December 31, 1998 and 1997
NOTE 6:
Income Taxes
The provision for income taxes consists of the following:
The tax benefits associated with stock options reduces taxes cur-
rently payable as shown above by $9,809,000, $1,761,000 and
$2,498,000 in 1999, 1998 and 1997, respectively. Such benefits
are credited to capital in excess of par when realized.
41
SanDisk Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 1999 1998 1997
(in thousands, except per share amounts)
Pro forma net income $ 16 ,213 $ 5,178 $ 17,156
Pro forma net income
per share
Basic $ 0.29 $ 0.10 $ 0.37
Diluted $ 0.26 $ 0.09 $ 0.34
December 31, 1999 1998 1997
(In thousands)
Current:
Federal $ 10,354 $ 1,413 $ 12,131
State 2,117 651 2,662
Foreign 4,105 2,936 5,263
16,576 5,000 20,056
Deferred:
Federal ( 2 ,600 ) 1,305 ( 13,205 )
State ( 40 0 ) 350 ( 3,350 )
Foreign ( 500 ) ——
( 3 ,500 ) 1,655 ( 16,555 )
Provision for income taxes $ 13,076 $ 6,655 $ 3,501