SanDisk 2005 Annual Report Download - page 62

Proxy StatementProxy Statement
Performance targets shall be adjusted to mitigate the unbudgeted impact of material, unusual or nonrecurring
gains and losses, accounting changes or other extraordinary events not foreseen at the time the targets were set
unless the Plan Administrator provides otherwise at the time of establishing the targets. The applicable
performance measurement period may not be less than three months nor more than 10 years.
3. Any new, substituted or additional securities or other property (including money paid other than as a
regular cash dividend) which the Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration shall be issued subject to (i) the same vesting requirements applicable
to the Participant's unvested shares of Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.
4. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued
to the Participant under the Stock Issuance and Cash Bonus Program, whether or not the Participant's interest
in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive
any dividends paid on such shares, subject to any applicable vesting requirements. The Participant shall not
have any stockholder rights with respect to the shares of Common Stock subject to a restricted stock unit or
share right award until that award vests and the shares of Common Stock are actually issued thereunder.
However, dividend-equivalent units may be paid or credited, either in cash or in actual or phantom shares of
Common Stock, on outstanding restricted stock unit or share right awards, subject to such terms and
conditions as the Plan Administrator may deem appropriate.
5. Should the Participant cease to remain in Service while holding one or more unvested shares of
Common Stock issued under the Stock Issuance and Cash Bonus Program or should the performance
objectives not be attained with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and the Participant shall have no
further stockholder rights with respect to those shares. To the extent the surrendered shares were previously
issued to the Participant for consideration paid in cash or cash equivalent, the Corporation shall repay to the
Participant the lower of (i) the cash consideration paid for the surrendered shares or (ii) the Fair Market
Value of those shares at the time of cancellation.
6. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more
unvested shares of Common Stock which would otherwise occur upon the cessation of the Participant's
Service or the non-attainment of the performance objectives applicable to those shares. Any such waiver shall
result in the immediate vesting of the Participant's interest in the shares of Common Stock as to which the
waiver applies. Such waiver may be effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance objectives. However, no vesting
requirements tied to the attainment of performance objectives may be waived with respect to shares which
were intended at the time of issuance to qualify as performance-based compensation under Code Sec-
tion 162(m), except in the event of the Participant's Involuntary Termination or as otherwise provided in
Section II of this Article Three.
7. Outstanding share right awards, restricted stock units or cash bonus awards under the Stock Issuance
and Cash Bonus Program shall automatically terminate, and no shares of Common Stock or cash shall
actually be issued or paid in satisfaction of those awards or units, if the performance goals or Service
requirements established for such awards or units are not attained or satisfied. The Plan Administrator,
however, shall have the discretionary authority to (i) issue vested shares of Common Stock under one or
more outstanding share right awards or restricted stock units as to which the designated performance goals or
Service requirements have not been attained or satisfied, and (ii) award cash bonus payments that are not
intended to qualify as performance-based compensation under Section 162(m) of the Code.
However, no vesting or payment requirements tied to the attainment of performance goals may be waived
with respect to awards or units which were intended, at the time those awards or units were granted, to qualify
as performance-based compensation under Code Section 162(m), except in the event of the Participant's
Involuntary Termination or as otherwise provided in Section II of this Article Three.
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