SanDisk 2011 Annual Report Download - page 49

Proxy Statement
databases, and administrative support). Similar to cash severance benefits, the Company believes these other
severance benefits are consistent with the severance arrangements of the Company’s peer companies and provide
the Named Executive Officers with financial and personal security during a period of time when they are likely
to be unemployed.
Severance Benefits Agreement Upon Termination of Employment. In connection with his promotion to Chief
Executive Officer, Mr. Mehrotra and the Company also entered into a separate severance agreement not related
to a change in control of the Company, pursuant to which Mr. Mehrotra is entitled to severance benefits upon his
termination without “cause” or voluntary resignation for “good reason” (as those terms are defined in the
severance agreement) without regard to whether a change in control has occurred. The benefits payable to
Mr. Mehrotra under his severance agreement are generally the same as provided for under his change in control
agreement with the exception that the severance payment is two times the base salary (without a multiple of
bonus) and he is still entitled to a pro-rata cash incentive bonus for the year in which his termination of
employment has occurred. Only the equity awards which would vest over the twenty-four (24) months following
Mr. Mehrotra’s termination of employment would accelerate upon his termination of employment (instead of all
of Mr. Mehrotra’s then outstanding equity awards as provided for under his change in control agreement). In the
event that Mr. Mehrotra is eligible to receive severance benefits under both his severance agreement and his
change in control agreement, he will be entitled only to the severance benefits provided under his change in
control agreement.
Separation Agreement with Mr. Cedar. Mr. Cedar resigned from his position as Executive Vice President
and Chief Technology Officer, effective December 31, 2011. Pursuant to the separation agreement with
Mr. Cedar, Mr. Cedar received a payment of $485,000, which is equivalent to one (1) year of his fiscal 2011 base
salary, and a payment of $436,500, which is equivalent to 100% of his fiscal 2011 target bonus. In addition,
Mr. Cedar received accelerated vesting of his unvested stock options and restricted stock units that would have
vested on or within fifteen (15) months of December 31, 2011. For further detail of the severance benefits
provided to Mr. Cedar, please see “Potential Payments Upon Termination or Change in Control” below.
Please see “Potential Payments Upon Termination or Change in Control” below for a description of the
potential payments that may be made to the Named Executive Officers in connection with their termination of
employment or a change in control.
Subsequent Committee Actions
In connection with its annual base salary review in February 2012 and based on the factors discussed above
under “Base Salaries,” the Compensation Committee set the fiscal 2012 base salaries of the Named Executive
Officers who are currently employees of the Company as follows: Mr. Mehrotra, $900,000; Ms. Bruner,
$567,000; Mr. Brelsford, $409,500; and Mr. Sadana, $425,000. These base salary adjustments reflect increases
from the most recent salaries for each of these Named Executive Officers of 12.5%, 5.0%, 4.0% and 10.4%,
respectively.
In February 2012, the Compensation Committee also established performance targets and a maximum
individual bonus payout amount in connection with the Company’s fiscal 2012 annual cash incentive program for
the Named Executive Officers who are currently employees of the Company which are intended to comply with
Section 162(m) of the Code. The performance targets under the fiscal 2012 annual cash incentive program relate
to a non-GAAP EPS goal and certain strategic objectives, the attainment of which the Compensation Committee
will evaluate following the end of fiscal 2012.
37