SanDisk 2003 Annual Report Download - page 87

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
outstanding on the last trading day in December in the immediately preceding calendar year, but in no event
will any such annual increase exceed 800,000 shares. Under the Purchase Plan, qualiÑed employees are
entitled to purchase shares through payroll deductions at 85% of the fair market value at the beginning or end
of the oÅering period, whichever is lower. As of December 28, 2003, the Company had reserved
5,916,864 shares of common stock for issuance in the aggregate under the Purchase Plan and the Company's
International Employee Stock Purchase Plan, a comparable stock purchase plan for employees of the
Company's foreign subsidiaries who are not residing in the U.S., and a total of 3,451,914 shares had been
issued through December 28, 2003.
Shareholder Rights Plan
On September 15, 2003, the Company amended its existing shareholder rights plan to terminate the
rights issued under that rights plan, and the Company adopted a new rights plan. Under the new rights plan,
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 September 25, 2003. The rights will expire on
April 28, 2007 unless redeemed or exchanged. Under the new Rights Agreement and after giving eÅect to the
Company's stock dividend eÅected on February 18, 2004, each right will, under the circumstances described
below, entitle the registered holder to buy one two-hundredths of a share of Series A Junior Participating
Preferred Stock for $225.00. The rights will become exercisable only if a person or group acquires beneÑcial
ownership of 15 percent or more of the Company's common stock or commences a tender oÅer or exchange
oÅer upon consummation of which such person or group would beneÑcially own 15 percent or more of the
Company's common stock.
Note 6: Retirement Plan
The Company maintains a tax-deferred savings plan, the SanDisk 401(k) Plan, for the beneÑt of
qualiÑed employees. The plan is designed to provide employees with an accumulation of funds at retirement.
QualiÑed 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
$1.2 million; $1.0 million and $1.1 million for the plan years ended December 28, 2003, December 29, 2002,
and December 30, 2001, respectively
Note 7: Income Taxes
The provision for (beneÑt from) income taxes consists of the following (in thousands):
December 28, December 29, December 30,
2003 2002 2001
Current:
Federal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 96,399 $(2,717) $ (28,455)
State ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,296 432 38
Foreign ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,025 13,753 6,845
130,720 11,468 (21,572)
Deferred:
Federal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (50,467) (7,729) (97,388)
State ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (7,231) Ì (25,040)
Foreign ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì
(57,698) (7,729) (122,428)
Provision for (beneÑt from) income taxes ÏÏÏÏÏÏÏÏÏÏÏ $ 73,022 $ 3,739 $(144,000)
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