SanDisk 2012 Annual Report Download - page 64

exercisable for twelve (12) months following termination, subject to the maximum term of the option); and
(ii) executive outplacement benefits for twelve (12) months following termination (including resume assistance,
career evaluation and assessment, individual career counseling, access to one or more on-line employment
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 in January 2011, 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.
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 2013 and based on the factors discussed above
under “Base Salaries,” the Compensation Committee set the fiscal year 2013 base salaries of the Named
Executive Officers who are currently employees of the Company as follows: Mr. Mehrotra, $950,000;
Ms. Bruner, $595,500; Mr. Sadana, $496,000; and Dr. Quader, $400,000. These base salary adjustments,
effective as of February 25, 2013, reflect increases from the most recent salaries for each of these Named
Executive Officers of 5.6%, 5.0%, 4.4% and 11.1%, respectively.
In February 2013, the Compensation Committee also established performance targets and a maximum
individual bonus payout amount in connection with the Company’s fiscal year 2013 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 year 2013 annual cash
incentive program relate to an EPS goal and certain strategic objectives, the attainment of which the
Compensation Committee will evaluate following the end of fiscal year 2013.
Stock Ownership Guidelines
Each Director and executive officer is required to beneficially own Common Stock (within the meaning of
Rule 13d-3 under the Exchange Act), with a minimum stock ownership requirement, if any, as determined by the
Board from time to time. Each Director and executive officer is required to beneficially own 1,000 shares of
Common Stock upon his or her one-year anniversary of service, increasing by 1,000 shares upon each
anniversary of service as a Director up to a maximum of 5,000 shares after five years of service. The Company’s
stock ownership guidelines are set forth in the Company’s Corporate Governance Principles, which are available
on the Company’s website.
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