SanDisk 2010 Annual Report Download - page 92

C. Tandem Rights. The following terms and conditions shall govern the grant and exercise of Tandem
Rights.
1. One or more Optionees may be granted a Tandem Right, exercisable upon such terms and conditions
as the Plan Administrator may establish, to elect between the exercise of the underlying option for shares of
Common Stock or the surrender of that option in exchange for a distribution from the Corporation in an
amount equal to the excess of (i) the Fair Market Value (on the option surrender date) of the number of
shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion
thereof) over (ii) the aggregate exercise price payable for such vested shares.
2. No such option surrender shall be effective unless it is approved by the Plan Administrator, either at
the time of the actual option surrender or at any earlier time. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this Section III shall be made in
shares of Common Stock valued at Fair Market Value on the option surrender date.
3. If the surrender of an option is not approved by the Plan Administrator, then the Optionee shall
retain whatever rights the Optionee had under the surrendered option (or surrendered portion thereof) on the
option surrender date and may exercise such rights at any time prior to the later of (i) five (5) business days
after the receipt of the rejection notice or (ii) the last day on which the option is otherwise exercisable in
accordance with the terms of the instrument evidencing such option, but in no event may such rights be
exercised more than seven (7) years after the date of the option grant.
D. Stand-Alone Rights. The following terms and conditions shall govern the grant and exercise of Stand-
alone Rights:
1. One or more individuals eligible to participate in the Discretionary Grant Program may be granted a
Stand-alone Right not tied to any underlying option under this Discretionary Grant Program. The Stand-
alone Right shall relate to a specified number of shares of Common Stock and shall be exercisable upon
such terms and conditions as the Plan Administrator may establish. In no event, however, may the Stand-
alone Right have a maximum term in excess of seven (7) years measured from the grant date. Upon exercise
of the Stand-alone Right, the holder shall be entitled to receive a distribution from the Corporation in an
amount equal to the excess of (i) the aggregate Fair Market Value (on the exercise date) of the shares of
Common Stock underlying the exercised right over (ii) the aggregate base price in effect for those shares.
2. The number of shares of Common Stock underlying each Stand-alone Right and the base price in
effect for those shares shall be determined by the Plan Administrator in its sole discretion at the time the
Stand-alone Right is granted. In no event, however, may the base price per share be less than the Fair
Market Value per underlying share of Common Stock on the grant date. In the event outstanding Stand-
alone Rights are to be assumed in connection with a Change in Control transaction or otherwise continued in
effect, the shares of Common Stock underlying each such Stand-alone Right shall be adjusted immediately
after such Change in Control so as to apply to the number and class of securities into which those shares of
Common Stock would have been converted in consummation of such Change in Control had those shares
actually been outstanding at that time. Appropriate adjustments to reflect such Change in Control shall also
be made to the base price per share in effect under each outstanding Stand-alone Right, provided the
aggregate base price 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 Stand-alone Rights under the Discretionary Grant Program, substitute, for the securities
underlying those assumed rights, 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 the Change in Control transaction.
3. Stand-alone Rights shall be subject to the same transferability restrictions applicable to
Non-Statutory Options and may not be transferred during the holder’s lifetime, except if such assignment is
in connection with the holder’s estate plan and is to one or more Family Members of the holder or to a trust
established for the holder and/or one or more such Family Members or pursuant to a domestic relations
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