SanDisk 2009 Annual Report Download - page 47

Proxy Statement
Description of Employment Agreements, Salary and Bonus Amounts
As indicated above, none of the Named Executive Officers is employed pursuant to an employment
agreement. As a result, their base salary and bonus opportunities are not fixed by contract. Instead, generally in
the first quarter of each fiscal year, the Compensation Committee establishes the base salary level for each of our
Named Executive Officers. In making its determination, the Compensation Committee considers the factors
discussed above under “Current Executive Compensation Program Elements—Base Salaries.” After the
completion of fiscal 2009, the Compensation Committee evaluated the performance of the Company and the
individual performance of each Named Executive Officer during the year, and made bonus payments in March
2010 to each of the Named Executive Officers with respect to fiscal 2009. The material terms of the bonuses paid
with respect to fiscal 2009 are described above under “Current Executive Compensation Program Elements—
Annual Cash Incentive Award.”
Consistent with the Company’s philosophy that a substantial portion of compensation should be contingent
on the Company’s performance, base salary for Named Executive Officers in fiscal 2009 comprised a relatively
low percentage (estimated between 21% and 30%) of total compensation. Equity and non-equity incentive
compensation, including bonus amounts, for Named Executive Officers in fiscal 2009, the value of which, as
described below under “Description of Plan-Based Awards,” is significantly dependent upon Company
performance, comprised a much larger percentage (estimated between 70% and 79%) of total compensation. The
Company believes this allocation of base salary and incentive compensation in proportion to total compensation
is appropriate to balance the Company’s dual goals of aligning the interests of executives and stockholders and
providing predictable benefit amounts that reward an executive’s continued service.
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2009
The following table presents information regarding the equity incentive awards granted to the Named
Executive Officers during fiscal 2009 under the 2005 Plan. The material terms of each grant are described below
under “Description of Plan-Based Awards.”
Name(a)
Grant
Date
(b)
All Stock
Awards:
Number of
Shares of Stock
or Units
(#)
(c)
All Option
Awards:
Number of
Securities
Underlying
Options
(#)
(d)
Exercise
or Base
Price of
Option
Awards
($/Sh)
(e)
Grant Date
Fair Value of
Stock and
Option
Awards
($)
(f)
Dr. Eli Harari ............................... 3/5/09 — 250,000 8.16 1,520,075
Sanjay Mehrotra ............................. 3/5/09 — 120,000 8.16 575,772
Judy Bruner ................................. 3/5/09 — 85,000 8.16 407,839
Yoram Cedar ................................ 3/5/09 — 75,000 8.16 359,858
Description of Plan-Based Awards
During fiscal 2009, each Named Executive Officer was awarded a time-based stock option award. Each of
these awards was granted under, and is subject to the terms of, the 2005 Plan. The plan is administered by the
Compensation Committee. The Compensation Committee has authority to interpret the plan provisions and make
all required determinations under the plan. This authority includes making required proportionate adjustments to
outstanding awards upon the occurrence of certain corporate events such as reorganizations, mergers and stock
splits, and making provision to ensure that any tax withholding obligations incurred in respect of awards are
satisfied. Awards granted under the plan are generally only transferable to a beneficiary of a Named Executive
Officer upon his or her death. However, the Compensation Committee may establish procedures for the transfer
of awards to other persons or entities, provided that such transfers comply with applicable securities laws and,
with limited exceptions set forth in the plan document, are not made for value.
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