SanDisk 2007 Annual Report Download - page 44

Change of Control Benefits Agreements with Named Executive Officers
As indicated above, the Company has entered into a change of control agreement with each Named Executive
Officer. The agreements are substantially identical (except as noted below with respect to Dr. Harari) and provide
for certain benefits to be paid to the Named Executive Officer in connection with a change of control and/or
termination of employment with the Company under the circumstances described below.
Change of Control Benefits. Upon a “Change of Control” (as defined in the change in control agreement) of
the Company, for purposes of the Named Executive Officer’s vesting in then outstanding and unvested equity
awards, the Named Executive Officer will be treated as having completed one additional year of vesting service as
of the date of the Change of Control. The remaining unvested portions of the equity awards will continue to vest in
accordance with their normal terms, but subject to the Named Executive Officer’s additional year of deemed vesting
service. If a Change in Control of the Company had occurred on December 31, 2007, the Company estimates that
the value of the one year acceleration of equity awards for each Named Executive Officer with a change in control
agreement would have been as follows: Dr. Harari ($1,632,750), Ms. Bruner ($1,429,625), Mr. Mehrotra
($2,376,837), Dr. Thakur ($0) and Mr. Cedar ($656,750). The Company estimates that this acceleration of vesting
by itself would not trigger excise taxes under Section 280G for any Named Executive Officer.
Severance Benefits — Termination of Employment in Connection with Change in Control. In the event a
Named Executive Officer’s employment is terminated by the Company (or a successor) without “Cause” (and not
on account of the Named Executive Officer’s death or disability) or by the Named Executive Officer for “Good
Reason” (as those terms are defined in the change in control agreement) within twelve months following a Change
of Control of the Company, the Named Executive Officer will be entitled to severance pay that includes: (i) a lump
sum cash payment equal to one (1) times (two (2) times for Dr. Harari) the sum of (A) the Named Executive
Officer’s annual base salary as of the Change of Control or termination of employment, whichever is greater, plus
(B) the Named Executive Officer’s target annual bonus for the year of termination; (ii) for a period of 24 months
following the termination date, continuation of the same or equivalent life, health, disability, vision, dental and other
insurance coverage for the Named Executive Officer and his or her spouse and eligible dependents as the Named
Executive Officer was receiving immediately prior to the Change of Control; (iii) accelerated vesting of the Named
Executive Officer’s equity awards to the extent outstanding on the termination date and not otherwise vested, with
accelerated options to remain exercisable for twelve months following the termination (subject to the maximum
term of the option); (iv) for a period of twelve months following the termination, executive-level outplacement
benefits (which shall include at least resume assistance, career evaluation and assessment, individual career
counseling, financial counseling, access to one or more on-line employment databases, private office and office
support); and (v) in the event that the Named Executive Officer’s benefits are subject to the excise tax imposed
under Section 280G, a gross-up payment so that the net amount of such payment (after taxes) he or she receives is
sufficient to pay the excise tax due.
The following table lists the Named Executive Officers and the estimated amounts they would have become
entitled to under their change of control agreement had their employment with the Company terminated on
December 31, 2007 under circumstances described above.
Name
(a)
Estimated Total
Value of Cash
Payment
($)
(b)
Estimated Total
Value of Health
Coverage
Continuation
($)
(c)
Estimated Total
Value of Equity
Acceleration
($)
(d)
Estimated Value of
Outplacement
Benefits
($)
(e)
Estimated Total
Value of Excise Tax
“Gross-Up”
($)
(f)
Dr. Eli Harari .............. 3,816,000 23,100 3,580,625 50,000 —
Sanjay Mehrotra ............ 994,500 32,500 5,033,150 50,000 —
Judy Bruner ............... 832,500 32,500 2,329,114 50,000 —
Dr. Randhir Thakur.......... 674,888 32,500 0 50,000 —
Yoram Cedar .............. 674,888 32,500 1,155,656 50,000 —
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