SanDisk 2012 Annual Report Download - page 31

Proxy Statement
PROPOSAL NO. 2
APPROVAL OF THE SANDISK CORPORATION 2013 INCENTIVE PLAN
Overview
The Company’s stockholders are being asked to vote on a proposal to approve the SanDisk Corporation
2013 Incentive Plan (the “2013 Plan”), which is attached as Annex A to this Proxy Statement, under which
20,000,000 shares of the Company’s Common Stock will initially be reserved for issuance, to be used by the
Company over multiple years. The 2013 Plan was approved by the Board, based on the recommendation of the
Company’s Compensation Committee, on March 14, 2013, subject to stockholder approval at the Annual
Meeting. The 2013 Plan is intended to serve as a successor to and replacement for our 2005 Plan, which is
expected to expire pursuant to its terms on March 15, 2015. In addition, the 2013 Plan will replace any shares
available for future grant under plans assumed by SanDisk in connection with acquisitions (the “Assumed
Plans”). If approved, the 2013 Plan will take effect on June 13, 2013, the day after the 2013 Annual Meeting, and
will expire on March 14, 2023. If the Company’s stockholders do not approve the 2013 Plan, then the term,
conditions and current share limits of the 2005 Plan will continue in effect, and the Company will continue to
make awards under the 2005 Plan, subject to such terms, conditions and share limits.
The following table sets forth information regarding outstanding grants as of March 15, 2013 under the 2005
Plan, as well as the Company’s 1995 Stock Option Plan (the “1995 Plan”) and 1995 Non-Employee Directors
Stock Option Plan (the “Directors Plan” and collectively with the 2005 Plan and the 1995 Plan, the “Predecessor
Plans”), both of which expired in 2005, and the Assumed Plans. Awards other than options and stock
appreciation rights are referred to as full value awards in the table below.
Plan
Options
and Stock
Appreciation
Rights
Outstanding
(# of Shares)
Weighted-
Average
Exercise Price
($ per Share)
Weighted-
Average
Remaining
Term (Years)
Full Value
Awards
Outstanding
(# of Shares)
Shares
Available for
Future Grant
(# of Shares)
2005 Plan ........................ 10,001,508 $41.22 4.22 4,115,630 9,748,206
Other Predecessor Plans ............. 739,912 $27.55 1.42 — —
Assumed Plans .................... 565,038 $37.42 3.88 46,390 61,688
Total ........................ 11,306,458 $40.14 4.02 4,162,020 9,809,894
Stockholder approval of the 2013 Plan will not affect any awards outstanding under the Predecessor Plans or
the Assumed Plans at the time of the Annual Meeting. Other than automatic Non-Employee Director grants under
the 2005 Plan, which will take effect immediately upon the election of the Non-Employee Directors to the Board
at the Annual Meeting, and other than awards established under the Company’s annual cash incentive program
for fiscal year 2013, no further awards will be made under the 2005 Plan or the Assumed Plans following
stockholder approval of the 2013 Plan at the Annual Meeting and the portion of the share reserves under the 2005
Plan and the Assumed Plans which are in excess of the then-outstanding awards under the 2005 Plan and the
Assumed Plans will be cancelled upon such stockholder approval. However, to the extent any awards outstanding
under the Predecessor Plans subsequently expire, terminate or lapse, the number of shares of Common Stock
subject to those expired, terminated or lapsed awards will be added to the share reserve available for issuance
under the 2013 Plan, up to a maximum of 10,000,000 additional shares.
Why Stockholders Should Vote for the Adoption of the 2013 Plan
For the following principal reasons, the Company requests that the stockholders approve the 2013 Plan and
the initial reservation of 20,000,000 shares for issuance under the 2013 Plan. The Company anticipates such
number of shares to be sufficient for multiple years of awards. If the 2013 Plan is not approved, the Company
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