SanDisk 2005 Annual Report Download - page 52

Proxy StatementProxy Statement
of those programs and any outstanding options, stock appreciation rights, stock issuances, other stock-based
awards or cash bonus opportunities thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions under the Plan shall be final and binding on all
parties who have an interest in the Discretionary Grant Program and Stock Issuance and Cash Bonus Program
under its jurisdiction or any stock option, stock appreciation right, stock issuance or other award thereunder.
D. Service as a Plan Administrator by the members of the Compensation Committee or the Secondary
Board Committee shall constitute service as Board members, and the members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board members for their service on such
committee. No member of the Compensation Committee or the Secondary Board Committee shall be liable
for any act or omission made in good faith with respect to the Plan or any option grant, stock appreciation
right, stock issuance or other award under the Plan.
E. Administration of the Automatic Grant Program shall be self-executing in accordance with the terms
of that program, and no Plan Administrator shall exercise any discretionary functions with respect to any
option grants or stock issuances made under that program, except that the Compensation Committee shall
have the express authority to establish from time to time the specific number of shares to be subject to the
initial and annual grants made to the non-employee Board members under such program.
F. Awards to Employees who are ""covered employees'' under Section 162(m) of the Code of (i) options
or stock appreciation rights, or (ii) shares or cash subject to the achievement of pre-established criteria as
described in Section I.B.2 of Article Three of the Stock Issuance and Cash Bonus Program, shall be deemed
to be intended as performance-based compensation within the meaning of Section 162(m) of the Code unless
the Compensation Committee provides otherwise at the time such an award is granted.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Grant Program and Stock Issuance and Cash
Bonus Program are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide services to the Corporation (or any
Parent or Subsidiary).
Notwithstanding the foregoing, only Employees are eligible to receive awards intended to constitute
performance-based compensation under Code Section 162(m).
B. The Plan Administrator shall have full authority to determine, (i) with respect to the grant of options
or stock appreciation rights under the Discretionary Grant Program, which eligible persons are to receive such
grants, the time or times when those grants are to be made, the number of shares to be covered by each such
grant, the time or times when the grant is to become exercisable, the vesting schedule (if any) applicable to
the granted option or stock appreciation right, the maximum term for which such option or stock appreciation
right is to remain outstanding and the status of a granted option as either an Incentive Option or a Non-
Statutory Option and (ii) with respect to stock issuances, other stock-based awards or cash bonus
opportunities under the Stock Issuance and Cash Bonus Program, which eligible persons are to receive such
issuances, awards or opportunities, the time or times when the issuances, awards or opportunities are to be
made, the number of shares subject to each such issuance, award or opportunity, the vesting and issuance
schedules applicable to the shares which are the subject of such issuance or award, the consideration for those
shares and the performance criteria and other terms with respect to such cash bonus opportunities.
C. The Plan Administrator shall have the absolute discretion either to grant options or stock appreciation
rights in accordance with the Discretionary Grant Program or to effect stock issuances, other stock-based
awards and bonus opportunities in accordance with the Stock Issuance and Cash Bonus Program.
A-3