SanDisk 2012 Annual Report Download - page 89

Proxy Statement
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 Withholding Taxes 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
estate or by the person or persons to whom the option is transferred pursuant to the Optionee’s will or
the laws of inheritance or by the Optionee’s designated beneficiary or beneficiaries of that option.
(iii) Should the Optionee’s Service be terminated for Misconduct or should the Optionee
otherwise engage in Misconduct while holding one or more outstanding options granted under this
Article Two, then all of those options shall terminate immediately and cease to be outstanding.
(iv) During the applicable post-Service exercise period, the option may not be exercised for more
than the number of vested shares for which the option is at the time exercisable. No additional shares
shall vest under the option following the Optionee’s cessation of Service, except to the extent (if any)
specifically authorized by the Plan Administrator in its sole discretion pursuant to an express written
agreement with the Optionee. Upon the expiration of the applicable exercise period or (if earlier) upon
the expiration of the option term, the option shall terminate and cease to be outstanding for any shares
for which the option has not been exercised.
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