SanDisk 2009 Annual Report Download - page 51

Proxy Statement
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2009
The following table presents information regarding the exercise of stock options by Named Executive
Officers during fiscal 2009, and on the vesting during fiscal 2009 of stock awards previously granted to the
Named Executive Officers.
Option Awards Stock Awards
Name
(a)
Number of Shares
Acquired on
Exercise
(#)
(b)
Value Realized on
Exercise
($) (1)
(c)
Number of Shares
Acquired on
Vesting
(#)
(d)
Value Realized on
Vesting
($) (1)
(e)
Dr. Eli Harari ...................... 50,000 421,899 25,000 268,000
Sanjay Mehrotra .................... — — 31,250 327,875
Judy Bruner ....................... — — 12,500 134,000
Yoram Cedar ...................... 40,000 140,889 6,250 67,000
(1) The dollar amounts shown in column (c) above for option awards are determined by multiplying (i) the
number of shares of Common Stock to which the exercise of the option related, by (ii) the difference
between the per-share closing price of our Common Stock on the date of exercise and the exercise price of
the options. The dollar amounts shown in column (e) above for stock awards are determined by multiplying
the number of shares or units, as applicable, that vested by the per-share closing price of Common Stock on
the vesting date.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following section describes the benefits that may become payable to Named Executive Officers in
connection with certain terminations of their employment with the Company and/or a change in control of the
Company. As prescribed by the SEC’s disclosure rules, in calculating the amount of any potential payments to
these Named Executive Officers, we have assumed that the applicable triggering event (i.e., termination of
employment or change in control) occurred on December 31, 2009 and that the price per share of Common Stock
is equal to the closing price per share on December 31, 2009, the last trading day in fiscal 2009.
In addition to the change in control and termination benefits described below, outstanding share-based
awards held by our Named Executive Officers may also be subject to accelerated vesting in connection with
certain changes in control of the Company under the terms of our equity incentive plans as noted under “Grants
of Plan-Based Awards” and “Outstanding Equity Awards at Fiscal 2009 Year-End” above. The estimated value
of accelerated vesting under the Company’s equity incentive plans is covered below under the description of
these Named Executive Officers’ severance arrangements.
As described below, if the benefits payable to a Named Executive Officer in connection with a change in
control of the Company would be subject to the excise tax imposed under Section 280G of the Internal Revenue
Code of 1986 (“Section 280G”), the Company will make an additional payment (a “gross-up payment”) to the
executive so that the net amount of such payment (after taxes) he or she receives is sufficient to pay the excise
tax due. For purposes of calculating the Section 280G excise tax, we have assumed that the Named Executive
Officer’s outstanding equity awards would be accelerated and terminated in exchange for a cash payment upon
the change in control. Based on this assumption, and as indicated in the chart below, had the Named Executive
Officers terminated employment under their respective change in control agreements on January 3, 2010, the
Company estimates that no gross-up payment would have been payable to the Named Executive Officers. The
value of this acceleration of vesting would be higher if the accelerated awards were assumed by the acquiring
company rather than terminated upon the transaction; however, the Company estimates that this increase in value
would not have been significant enough to trigger a gross-up payment. For purposes other than calculating the
Section 280G excise tax, we have calculated the value of any option or stock award that may be accelerated in
connection with a change in control of the Company to be the full value of such award (i.e., the full “spread”
value for option awards and the full price per share of Common Stock for stock awards).
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