SanDisk 2005 Annual Report Download - page 60

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Termination, and the shares subject to those terminated repurchase rights shall accordingly vest in full at that
time.
G. The Plan Administrator shall have the discretionary authority to structure one or more outstanding
options or stock appreciation rights under the Discretionary Grant Program so that those options or stock
appreciation rights shall, immediately prior to the effective date of a Hostile Take-Over, become exercisable
as to all the shares of Common Stock at the time subject to those options or stock appreciation rights and may
be exercised as to any or all of those shares as fully vested shares of Common Stock. In addition, the Plan
Administrator shall have the discretionary authority to structure one or more of the Corporation's repurchase
rights under the Discretionary Grant Program so that those rights shall terminate automatically upon the
consummation of such Hostile Take-Over, and the shares subject to those terminated rights shall thereupon
vest in full. Alternatively, the Plan Administrator may condition the automatic acceleration of one or more
outstanding options or stock appreciation rights under the Discretionary Grant Program and the termination of
one or more of the Corporation's outstanding repurchase rights under such program upon the subsequent
termination of the Optionee's Service by reason of an Involuntary Termination within a designated period
following the effective date of such Hostile Take-Over.
H. The portion of any Incentive Option accelerated in connection with a Change in Control or Hostile
Take-Over shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred
Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar limitation is exceeded, the
accelerated portion of such option shall be exercisable as a Non-statutory Option under the Federal tax laws.
V. PROHIBITION ON REPRICING PROGRAMS
The Plan Administrator shall not (i) implement any cancellation/regrant program pursuant to which
outstanding options or stock appreciation rights under the Plan are cancelled and new options or stock
appreciation rights are granted in replacement with a lower exercise price per share, (ii) cancel outstanding
options or stock appreciation rights under the Plan with exercise prices per share in excess of the then current
Fair Market Value per share of Common Stock for consideration payable in equity securities of the
Corporation or (iii) otherwise directly reduce the exercise price in effect for outstanding options or stock
appreciation rights under the Plan, without in each such instance obtaining stockholder approval.
ARTICLE THREE
STOCK ISSUANCE AND CASH BONUS PROGRAM
I. STOCK ISSUANCE AND CASH BONUS TERMS
Shares of Common Stock may be issued under the Stock Issuance and Cash Bonus Program, either as
vested or unvested shares, through direct and immediate issuances without any intervening option grants. Each
such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms
specified below. Shares of Common Stock may also be issued under the Stock Issuance and Cash Bonus
Program pursuant to share right awards or restricted stock units which entitle the recipients to receive the
shares underlying those awards or units upon the attainment of designated performance goals or the
satisfaction of specified Service requirements or upon the expiration of a designated time period following the
vesting of those awards or units.
The grant, vesting or payment of cash awards under the Stock Issuance and Cash Bonus Program may
depend on the degree of achievement of one or more performance goals relative to a pre-established targeted
level or levels using one or more of the criteria set forth in Section I.B.2. of this Article Three.
The maximum number of shares of Common Stock which may be issued without cash consideration
under the Stock Issuance and Cash Bonus Program (whether as direct stock issuances or pursuant to
restricted stock units or other share-right awards) may not exceed ten percent (10%) of the total number of
shares of Common Stock from time to time authorized for issuance under the Plan, including (without
limitation): (i) any shares added to the Plan reserve by reason of the expiration or termination of outstanding
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