SanDisk 2009 Annual Report Download - page 52

Change of Control Benefits Agreements with Named Executive Officers
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 Mr. Mehrotra) 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 (other than the performance-based restricted stock unit awards granted in fiscal 2008), 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.
Fifty percent of the performance-based restricted stock unit awards granted in fiscal 2008 may become vested
upon a change of control, as described above under Grants of Plan Based Awards in Fiscal 2009—Restricted
Stock Units. If a Change in Control of the Company had occurred on January 3, 2010, the Company estimates
that the aggregate value of the one year acceleration of equity awards and acceleration of 50% of the
performance-based restricted stock unit awards for each Named Executive Officer with a change in control
agreement would have been as follows: Dr. Harari ($2,785,560), Mr. Mehrotra ($1,884,298), Ms. Bruner
($1,048,872) and Mr. Cedar ($933,928). 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 (one and one-half (1.5) times for Mr. Mehrotra and 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.
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