SanDisk 2005 Annual Report Download - page 63

8. Before any performance-based award under the Stock Issuance and Cash Bonus Program is paid and
to the extent required to qualify the award as performance-based compensation within the meaning of
Section 162(m) of the Code, the Plan Administrator must certify in writing that the performance target(s)
and any other material terms of the performance-based award were in fact timely satisfied.
9. The Plan Administrator will have the discretion to determine the restrictions or other limitations of the
individual awards granted under the Stock Issuance and Cash Bonus Program including the authority to
reduce awards, payouts or vesting or to pay no awards, in its sole discretion, if the Plan Administrator
preserves such authority at the time of grant by language to this effect in its authorizing resolutions or
otherwise.
II. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. All of the Corporation's outstanding repurchase rights under the Stock Issuance and Cash Bonus
Program shall terminate automatically, and all the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Change in Control, except to the extent (i) those repurchase
rights are to be assigned to the successor corporation (or parent thereof) or are otherwise to continue in full
force and effect pursuant to the terms of the Change in Control transaction or (ii) such accelerated vesting is
precluded by other limitations imposed in the Stock Issuance Agreement.
B. Each outstanding restricted stock unit or share right award assumed in connection with a Change in
Control or otherwise continued in effect shall be adjusted immediately after the consummation of that Change
in Control so as to apply to the number and class of securities into which the shares of Common Stock subject
to the award immediately prior to the Change in Control would have been converted in consummation of such
Change in Control had those shares actually been outstanding at that time, and appropriate adjustments shall
also be made to the consideration (if any) payable per share thereunder, provided the aggregate amount of
such consideration shall remain the same. To the extent the actual holders of the Corporation's outstanding
Common Stock receive cash consideration for their Common Stock in consummation of the Change in
Control, the successor corporation may, in connection with the assumption or continuation of the outstanding
restricted stock units or share right awards, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control
transaction.
C. If any such restricted stock unit or share right award is not assumed or otherwise continued in effect
or replaced with a cash incentive program of the successor corporation which preserves the Fair Market Value
of the underlying shares of Common Stock at the time of the Change in Control and provides for the
subsequent payout of that value in accordance with the same vesting schedule applicable to those shares, then
such unit or award shall vest, and the shares of Common Stock subject to that unit or award shall be issued as
fully-vested shares, immediately prior to the consummation of the Change in Control.
D. The Plan Administrator shall have the discretionary authority to structure one or more unvested stock
issuances, one or more restricted stock unit or other share right awards or one or more cash bonus awards
under the Stock Issuance and Cash Bonus Program so that the shares of Common Stock or cash subject to
those issuances or awards shall automatically vest (or vest and become issuable or payable) in whole or in part
immediately upon the occurrence of a Change in Control or upon the subsequent termination of the
Participant's Service by reason of an Involuntary Termination within a designated period following the
effective date of that Change in Control transaction.
E. The Plan Administrator shall also have the discretionary authority to structure one or more unvested
stock issuances, one or more restricted stock unit or other share right awards or one or more cash bonus
awards under the Stock Issuance and Cash Bonus Program so that the shares of Common Stock or cash
subject to those issuances or awards shall automatically vest (or vest and become issuable or payable) in
whole or in part immediately upon the occurrence of a Hostile Take-Over or upon the subsequent termination
of the Participant's Service by reason of an Involuntary Termination within a designated period following the
effective date of that Hostile Take-Over.
A-14