SanDisk 2005 Annual Report Download - page 71

L. Fair Market Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:
(i) If the Common Stock is at the time traded on the NASDAQ National Market, then the
Fair Market Value shall be the closing selling price per share of Common Stock at the close of
regular hours trading (i.e., before after- hours trading begins) on the NASDAQ National Market on
the date in question, as such price is reported by the National Association of Securities Dealers. If
there is no closing selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market
Value shall be the closing selling price per share of Common Stock at the close of regular hours
trading (i.e., before after-hours trading begins) on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such exchange. If there is no
closing selling price for the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such quotation exists.
M. Family Member means, with respect to a particular Optionee or Participant, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, bother-in-law or sister-in-law.
N. Hostile Take-Over shall mean a change in ownership or control of the Corporation effected
through either of the following transactions:
(i) a change in the composition of the Board over a period of thirty-six (36) consecutive
months or less such that a majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time the Board approved such election or
nomination, or
(ii) the acquisition, directly or indirectly, by any person or related group of persons (other than
the Corporation or a person that directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such stockholders to accept.
O. Incentive Option shall mean an option which satisfies the requirements of Code Section 422.
P. Involuntary Termination shall mean the termination of the Service of any individual which
occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the Corporation (or any Parent or
Subsidiary) for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a change in his or her position with
the Corporation (or any Parent or Subsidiary) which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports, (B) a reduction in his or her
level of compensation (including base salary, fringe benefits and target bonus under any corporate-
performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a
relocation of such individual's place of employment by more than fifty (50) miles, provided and only
if such change, reduction or relocation is effected by the Corporation (or any Parent or Subsidiary)
without the individual's consent.
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