SanDisk 2010 Annual Report Download - page 91

Proxy Statement
that the option may be assigned in whole or in part during the Optionee’s lifetime to one or more Family
Members of the Optionee or to a trust established exclusively for one or more such Family Members, to the
extent such assignment is in connection with the Optionee’s estate plan or pursuant to a domestic relations
order. The assigned portion may only be exercised by the person or persons who acquire a proprietary
interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the
same as those in effect for the option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Plan Administrator may deem appropriate.
(iii) Beneficiary Designations. Notwithstanding the foregoing, the Optionee may designate one or more
persons as the beneficiary or beneficiaries of his or her outstanding options under this Article Two (whether
Incentive Options or Non-Statutory Options), and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding
those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised following the Optionee’s
death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions
of this Section II, all the provisions of Articles One, Two and Five shall be applicable to Incentive Options.
Options which are specifically designated as Non-Statutory Options when issued under the Plan shall not be
subject to the terms of this Section II.
A. Eligibility. Incentive Options may only be granted to Employees.
B. Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock (determined as of
the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or
any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable
as Incentive Options during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000).
To the extent the Employee holds two (2) or more such options which become exercisable for the first time
in the same calendar year, then for purposes of the foregoing limitations on the exercisability of those options as
Incentive Options, such options shall be deemed to become first exercisable in that calendar year on the basis of
the chronological order in which they were granted, except to the extent otherwise provided under applicable law
or regulation.
C. 10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then
the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date, and the option term shall not exceed five (5) years measured
from the option grant date.
III. STOCK APPRECIATION RIGHTS
A. Authority. The Plan Administrator shall have full power and authority, exercisable in its sole discretion,
to grant stock appreciation rights in accordance with this Section III to selected Optionees or other individuals
eligible to receive option grants under the Discretionary Grant Program.
B. Types. Two types of stock appreciation rights shall be authorized for issuance under this Section III:
(i) tandem stock appreciation rights (“Tandem Rights”) and (ii) stand-alone stock appreciation rights (“Stand-
alone Rights”).
A-7