Charter of the Compensation Committee of the Board of Directors of SanDisk Corporation (Adopted March 19, 2015)

Transcription

1 Charter of the Compensation Committee of the Board of Directors of () Purposes. The primary purposes of the Compensation Committee (the Committee ) of SanDisk Corporation ( SanDisk ) are to (1) discharge SanDisk s Board of Directors (the Board ) responsibilities relating to compensation of SanDisk s executive officers, as defined by the listing standards of the Nasdaq Stock Market, as the same may be amended from time to time (the listing standards ), including all officers as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the Act ) (such executive officers, the executive officers ), and SanDisk s directors, and (2) review and approve the disclosures on executive officer compensation for inclusion in SanDisk s proxy statement for each annual meeting of stockholders and SanDisk s annual report on Form 10-K. Composition of the Committee. At Least Three Members. There shall be at least three directors serving on the Committee, with a chair appointed by the Board. Independence. All Committee members shall be independent as defined in the listing standards and applicable laws, rules and regulations. In addition, all Committee members shall also qualify as non-employee directors within the meaning of Rule 16b-3 of the Act ( Section 16(b) ) and outside directors within the applicable regulations under Section 162(m) of the Internal Revenue Code of 1986, as amended ( Section 162(m) ). Appointment. Subject to the requirements of the listing standards, the Board may appoint and remove Committee members and the Committee s chair in accordance with SanDisk s bylaws. Committee members shall serve for such terms as may be fixed by the Board, or at the will of the Board if no specific term is fixed. Upon expiration of any term or to fill any vacancy on the Committee, the members of the Committee shall be appointed by the Board upon the recommendation of the Nominating and Governance Committee. If the Board does not designate a Committee chair, the Committee members may designate the chair by a majority vote of the Committee members. Committee Functions. The Committee will: Executive Officer Compensation: review and approve the corporate goals and objectives relevant to the compensation of SanDisk s chief executive officer (the CEO ); in consultation with the CEO, review the corporate goals and objectives relevant to the compensation of SanDisk s executive officers other than the CEO and approve such goals;

2 evaluate the CEO s performance in light of the Committee s approved goals and objectives; in consultation with the CEO, evaluate the other executive officers performance in light of the Committee s approved goals and objectives; in each case, set the CEO s and other executive officers compensation levels after taking into consideration the aforementioned evaluations; and such CEO s and other executive officers compensation may (a) include performance criteria which may include, without limitation, SanDisk s performance and relative stockholder return or (b) take into account the value of incentive awards to executive officers at comparable companies and the awards given SanDisk s officers in past years. Significant Officer Contracts: review and approve significant employment agreements, separation and severance agreements, arrangements or transactions with executive officers, including any arrangements having any compensatory effect or purpose. Succession Planning: review and assist the Board in developing succession plans for the CEO, other executive officers (in consultation with the CEO), other Board members and other appropriate management personnel. Non-Employee Director Compensation: review and recommend to the Board appropriate director compensation programs for non-employee directors, Committee chairs, and Committee members, consistent with any applicable requirements of the listing standards and applicable laws for independent directors and including consideration of cash and equity components. Compensation Policies and Performance Criteria: develop and periodically assess the Committee s compensation policies applicable to SanDisk s executive officers and directors, including the relationship of corporate performance to executive officer compensation, and periodically review SanDisk s performance criteria and assess and make recommendations to the Board concerning SanDisk s stock and incentive compensation plans, including the impact of stock compensation plans on stockholder value and the impact of dilution from SanDisk stock plans. Compensation Plan Awards: approve stock option grants and other equity-based or executive officer incentive awards under SanDisk s stock and incentive compensation plans, including any performance criteria relating to the plans or awards, and otherwise assist the Board in administering awards under these plans. Subject to applicable legal requirements and the terms of applicable plans, one or more secondary Committees of one or more directors or executive officers may additionally be appointed by the Board to have authority specified by the Board to grant stock options and other discretionary awards under SanDisk s stock-based and other incentive compensation plans to all eligible individuals other than directors and executive officers.

3 Say-On-Pay Results: consider the results of the most recent shareholder advisory vote on executive compensation as required by Section 14A of the Exchange Act and, to the extent the Committee determines it appropriate to do so, take such results into consideration in connection with the review and approval of executive officer compensation. Annual Disclosures: timely review and approve management s Compensation Discussion & Analysis and prepare an annual Compensation Committee Report to the Board recommending that such disclosures be included in SanDisk s annual report on Form 10-K or, as applicable, SanDisk s proxy statement for each annual meeting of stockholders in accordance with applicable SEC rules. Risk Assessment: periodically assess SanDisk s compensation policies and practices as they relate to the Company s risk management. Clawback Policies: to the extent it deems necessary, review and approve the terms of any compensation clawback or similar policy or agreement between SanDisk and SanDisk s executive officers or other employees subject to Section 16 of the Exchange Act. Other Functions: perform any other activities consistent with the Committee s purpose, this charter, the bylaws and applicable listing standards and laws as the Committee or the Board considers appropriate. Notwithstanding anything to the contrary in the foregoing, the Committee shall have sole discretion and authority with respect to any action regarding compensation payable to the CEO or other executive officers of SanDisk that the Committee intends to constitute qualified performance-based compensation for purposes of Section 162(m) and the Treasury Regulations promulgated thereunder. Meetings, Reports and Resources of the Committee. Meetings. The Committee will meet from time to time as appropriate to carry out its responsibilities and duties. The Committee may also hold special meetings or act by unanimous written consent (which may be provided in writing or by electronic transmission) as the Committee may decide. Notwithstanding the foregoing, grants of awards under stock or incentive plans must be made in accordance with equity grant procedures adopted by the Board. The Committee, as it may determine to be appropriate, may meet in separate executive sessions with other directors, the CEO and other SanDisk employees, agents or representatives invited by the Committee; provided, that the CEO may not be present during the portions of a Committee meeting during which any deliberation or vote regarding his or her compensation occurs. Procedures. The Committee may establish its own procedures, including the formation and delegation of authority to subcommittees, in a manner not inconsistent with this charter, the bylaws, the requirements of Section 162(m) or Section 16(b) or applicable listing standards. The chairperson or majority of the Committee members may call meetings of the Committee. Unless the Committee or the Board adopts other procedures, the provisions of the bylaws applicable to meetings of Board Committees will govern meetings of the Committee. A majority of the

4 authorized number of Committee members shall constitute a quorum for the transaction of Committee business, and the vote of a majority of the Committee members present at a meeting at which a quorum is present shall be the act of the Committee, unless in either case a greater number is required by this charter, the bylaws or the listing standards. The Committee shall keep written minutes of its meetings and deliver copies of the minutes to the corporate secretary for inclusion in the corporate records. The Committee will report on activities of the Committee to the full Board as appropriate and will make such recommendations with respect to its responsibilities and other matters as it deems necessary or appropriate. Committee Access and Resources. The Committee is at all times authorized to have direct, independent access to SanDisk s other directors, management and personnel as well as books, records and facilities to carry out the Committee s purposes. The Committee is authorized to communicate in confidence with any of these individuals. SanDisk will provide for appropriate funding, as determined by the Committee, for payment of compensation to any compensation consultant, legal counsel or other advisor retained by the Committee, as well as for payment of ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. Investigations and Studies; Outside Advisors. The Committee may conduct or authorize investigations into or studies of matters within the Committee s scope of responsibilities, and may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel or other adviser retained by the Committee, the expense of which shall be borne by SanDisk. The Committee may select a compensation consultant, legal counsel or other adviser to the Committee only after taking into consideration all factors relevant to that person s independence from management, including the following: (a) (b) (c) (d) (e) The provision of other services to SanDisk by the person that employs the compensation consultant, legal counsel or other adviser; The amount of fees received from SanDisk by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser; The policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest; Any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the Committee; Any stock of SanDisk owned by the compensation consultant, legal counsel or other adviser; and

5 (f) Any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of SanDisk. The Committee shall conduct the independence assessment with respect to any compensation consultant, legal counsel or other adviser that provides advice to the Committee, other than: (i) in-house legal counsel; and (ii) any compensation consultant, legal counsel or other adviser whose role is limited to the following activities: consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of SanDisk, and that is available generally to all salaried employees; or providing information that either is not customized for SanDisk or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice. Nothing herein requires a compensation consultant, legal counsel or other compensation adviser to be independent, only that the Committee consider the enumerated independence factors before selecting or receiving advice from a compensation consultant, legal counsel or other compensation adviser. The Committee may select or receive advice from any compensation consultant, legal counsel or other compensation adviser it prefers, including ones that are not independent, after considering the six independence factors outlined above. Nothing herein shall be construed: (1) to require the Committee to implement or act consistently with the advice or recommendations of the compensation consultant, legal counsel or other adviser to the Committee; or (2) to affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of its duties. Annual Review of this Charter. The Committee will review and reassess the adequacy of this charter annually and recommend any proposed changes to the Board. Nothing in this charter is intended to preclude or impair the protection provided in Section 141(e) of the Delaware General Corporation Law for good faith reliance by members of the Committee on reports or other information provided by others.