SanDisk 2010 Annual Report Download - page 39

Proxy Statement
in the event the individual’s service with the Company or the successor entity is terminated (actually or
constructively) within a designated period following a change in control transaction in which those
options or stock appreciation rights are assumed or otherwise continued in effect. The vesting of
outstanding shares and the vesting and issuance of the shares of Common Stock subject to outstanding
restricted stock units or other stock-based awards under the stock issuance program may also be
structured to accelerate upon similar terms and conditions.
(iv) The plan administrator will have the discretion to structure one or more option grants or stock
appreciation rights under the discretionary grant program so that those options or stock appreciation
rights will immediately vest upon a change in control, whether or not the options or stock appreciation
rights are to be assumed or otherwise continued in effect. The plan administrator may also structure
unvested stock issuances or restricted stock units or other share rights awards under the stock issuance
program so that those issuances or awards will in all events vest immediately upon a change in control.
(v) A change in control will be deemed to occur in the event (a) the Company is acquired by merger or
asset sale, (b) there occurs a stockholder-approved sale, transfer or other disposition (including in
whole or in part through one or more licensing arrangements) of all or substantially all of the
Company’s assets, or (c) there occurs any transaction or series of related transactions pursuant to which
any person or group of related persons becomes directly or indirectly the beneficial owner of securities
possessing (or convertible into or exercisable for securities possessing) more than fifty percent
(50%) of the total combined voting power of the Company’s securities outstanding immediately after
the consummation of such transaction or series of related transactions, whether such transaction
involves a direct issuance from the Company or the acquisition of outstanding securities held by one or
more of the Company’s stockholders.
(vi) The plan administrator will also 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 will, immediately prior to the effective date of a hostile take-over, vest and become
exercisable as to all the shares of Common Stock at the time subject to those options or stock
appreciation rights. In addition, the plan administrator will have the authority to structure one or more
awards under the stock issuance program so that the shares of Common Stock subject to those awards
will immediately vest upon the consummation of a hostile take-over. Alternatively, the plan
administrator may condition such vesting acceleration upon the subsequent termination of the
individual’s service within a designated period following the effective date of such hostile take-over.
(vii) A hostile take-over will be deemed to occur if (a) there is a change in the majority of the Company’s
Board of Directors as a result of one or more contested elections for board membership or (b) securities
possessing more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are acquired pursuant to a hostile tender offer.
The acceleration of vesting in the event of a change in the ownership or control may be seen as an anti-
takeover provision and may have the effect of discouraging a merger proposal, a takeover attempt or other efforts
to gain control of the Company.
Changes in Capitalization. In the event any change is made to the outstanding shares of Common Stock by
reason of any recapitalization, stock dividend, stock split, combination of shares, exchange of shares or other
change in corporate structure effected without the Company’s receipt of consideration, appropriate adjustments
will be made to: (i) the maximum number and/or class of securities issuable under the 2005 Plan; (ii) the
maximum number and/or class of securities by which the share reserve may increase by reason of the expiration
or termination of unexercised options under the Predecessor Plans; (iii) the maximum number and/or class of
securities which may be issued without cash consideration under the stock issuance program; (iv) the maximum
number and/or class of securities for which any one person may be granted stock options, stand-alone stock
appreciation rights, direct stock issuances (whether vested or unvested) and other stock-based awards under the
2005 Plan per calendar year; (v) the number and/or class of securities and the exercise price or base price per
27