SanDisk 2003 Annual Report Download - page 85

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
January each calendar year, beginning with calendar year 2002 and continuing over the remaining term of the
plan, by an amount equal to approximately 4% of the total number of shares outstanding on the last trading
day in December in the immediately preceding calendar year, but in no event will any such annual increase
exceed 8,000,000 shares. The automatic share increase for 2003 was 6,030,388 shares.
1995 Non-Employee Directors Stock Option Plan
In August 1995, the Company adopted the 1995 Non-Employee Directors Stock Option Plan. Under this
plan, automatic option grants are made at periodic intervals to eligible non-employee members of the Board of
Directors. Initial option grants vest over a four-year period. Subsequent annual grants vest one year after date
of grant. All options granted under the Non-Employee Directors Stock Option Plan expire ten years after the
date of grant. In May 1999, the stockholders increased the shares available for future issuance under the 1995
Non-Employee Directors Stock Option Plan by 800,000 and approved an automatic share increase feature
pursuant to which the number of shares available for issuance under the plan will automatically increase on
the Ñrst trading day in January each calendar year, beginning with calendar year 2002 and continuing over the
remaining term of the plan, by an amount equal to 0.2% of the total number of shares outstanding on the last
trading day in December in the immediately preceding calendar year, but in no event will any such annual
increase exceed 400,000 shares. The automatic share increase for 2003 was 276,622 shares. At December 28,
2003, the Company had reserved 2,150,478 shares for issuance under the Non-Employee Directors Stock
Option Plan and a total of 1,568,000 options had been granted. Outstanding shares are at exercise prices
ranging from $6.215 to $35.031 per share.
Special Stock Option Plan
The Special Stock Option Plan provides for the issuance of nonqualiÑed options to newly hired
employees. Under this plan, a committee appointed by the Board of Directors determines the vesting and
exercise provisions of option grants. 4,000,000 shares have been reserved for issuance under the Special Stock
Option Plan, of which no shares are subject to outstanding options.
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