SanDisk 2009 Annual Report Download - page 140

Notes To Consolidated Financial Statements
2,224,938 shares of common stock had been added to the 2005 Plan reserve. All options granted under the 2005
Plan were 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.
1995 Stock Option Plan and 1995 Non-Employee Directors Stock Option Plan. Both of these plans
terminated on May 27, 2005, and no further option grants were made under the plans after that date. However,
options that were outstanding under these plans on May 27, 2005 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. Grants and awards under these plans generally vest as follows: 25% of the shares will
vest on the first anniversary of the vesting commencement date and the remaining 75% will vest proportionately
each quarter over the next 36 months of continued service.
2005 Employee Stock Purchase Plan. The 2005 Employee Stock Purchase Plan (“ESPP”) was approved by
the stockholders on May 27, 2005. The ESPP consists of two components: a component for employees residing
in the U.S. and an international component for employees who are non-U.S. residents. 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 on the purchase date. The ESPP had an original authorization of 5,000,000
shares to be issued, of which 2,233,939 shares were available to be issued as of January 3, 2010. In the fiscal
years ended January 3, 2010, December 28, 2008 and December 30, 2007, a total of 1,158,909, 956,187 and
385,989 shares of common stock, respectively, have been issued under this plan.
msystems Ltd. 1996 Section 102 Stock Option/Stock Purchase Plan and 2003 Stock Option and Restricted
Stock Incentive Plan. The msystems Ltd. 1996 Section 102 Stock Option/Stock Purchase Plan and 2003 Stock
Option and Restricted Stock Incentive Plan acquired through the Company’s acquisition of msystems, were
terminated on November 19, 2006, and no further grants were made under these plans after that date. However,
award grants that were outstanding under these plans on November 19, 2006 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. Awards granted under these plans generally vest as follows:
50% of the shares will vest on the second anniversary of the vesting commencement date and the remaining 50%
will vest proportionately each quarter over the next 24 months of continued service.
Matrix Semiconductor, Inc. 2005 Stock Incentive Plan, 1999 Stock Plan and 1998 Long-term Incentive
Plan. The Matrix Semiconductor, Inc. 2005 Stock Incentive Plan, 1999 Stock Plan and the Rhombus, Inc. 1998
Long-term Incentive Plan (“Matrix Stock Plans”), acquired through SanDisk’s acquisition of Matrix
Semiconductor, Inc. (“Matrix”), were terminated on January 13, 2006, and no further option grants were made
under these plans after that date. However, award grants that were outstanding under these plans on
January 13, 2006 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. Awards
granted under these plans generally vest as follows: 1/48 of the shares will vest proportionately each month over
the next 48 months of continued service or 1/60 of the shares will vest proportionately each month over the next
60 months of continued service.
Accounting for Share-Based Compensation Expense
For share-based awards expected to vest, compensation cost includes the following: (a) compensation cost,
based on the grant-date estimated fair value and expense attribution method related to any share-based awards
granted through, but not yet vested as of January 1, 2006, and (b) compensation cost for any share-based awards
F-28