SanDisk 2010 Annual Report Download - page 89

Proxy Statement
ARTICLE TWO
DISCRETIONARY GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator;
provided, however, that each such document shall comply with the terms specified below. Each document
evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such
options.
A. Exercise Price.
1. The exercise price per share shall be fixed by the Plan Administrator; provided, however, that such
exercise price shall not be less than one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the grant date.
2. The exercise price shall become immediately due upon exercise of the option and shall, subject to
the provisions of the documents evidencing the option, be payable in one or more of the forms specified
below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period (if any) necessary to avoid any resulting
charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value
on the Exercise Date, or
(iii) to the extent the option is exercised for vested shares, through a special sale and remittance
procedure pursuant to which the Optionee shall concurrently provide instructions to (a) a brokerage
firm (reasonably satisfactory to the Corporation for purposes of administering such procedure in
compliance with the Corporation’s pre-clearance/pre-notification policies) to effect the immediate sale
of the purchased shares and remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares
plus all applicable income and employment taxes required to be withheld by the Corporation by reason
of such exercise and (b) the Corporation to deliver the certificates for the purchased shares directly to
such brokerage firm on such settlement date in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized, payment of the exercise price
for the purchased shares must be made on the Exercise Date.
B. Exercise and Term of Options. Each option shall be exercisable at such time or times, during such
period and for such number of shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing the option. However, no option shall have a term in excess of seven (7) years measured
from the option grant date.
C. Effect of Termination of Service.
1. The following provisions shall govern the exercise of any options granted pursuant to the
Discretionary Grant Program that are outstanding at the time of the Optionee’s cessation of Service or death:
(i) Any option outstanding at the time of the Optionee’s cessation of Service for any reason shall
remain exercisable for such period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option shall be exercisable after the
expiration of the option term.
(ii) Any option held by the Optionee at the time of the Optionee’s death and exercisable in whole
or in part at that time may be subsequently exercised by the personal representative of the Optionee’s
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