SanDisk 2012 Annual Report Download - page 96

or qualifications or launches or achievements of research and development milestones; (16) the formation of
joint ventures, research or development collaborations, or the completion of other corporate transactions
intended to increase the Corporation’s revenue or profitability or enhance its customer base; (17) measures
of employee satisfaction; (18) measures of improvements in product quality; (19) price of Common Stock;
(20) design wins; (21) on-time delivery metrics; and (22) any combination of, or a specified increase in, any
of the foregoing. Any of the performance goals may be based on either a GAAP or a non-GAAP measure, as
determined by the Compensation Committee; provided that such non-GAAP measures comply with the
requirements of Section 162(m) of the Code. In addition, such performance goals may be based upon the
attainment of specified levels of the Corporation’s performance under one or more of the measures
described above relative to the performance of other entities and may also be based on the performance of
any of the Corporation’s business units or divisions or any Parent or Subsidiary. Performance goals may
include a minimum threshold level of performance below which no award will be earned, levels of
performance at which specified portions of an award will be earned and a maximum level of performance at
which an award will be fully earned. To qualify awards as performance-based under Section 162(m), the
applicable criterion (or criteria, as the case may be) and specific performance goal or goals (“targets”) must
be established and approved by the Plan Administrator during the first 90 days of the performance period
(and, in the case of performance periods of less than one year, in no event after 25% or more of the
performance period has elapsed) and while performance relating to such target(s) remains substantially
uncertain within the meaning of Section 162(m) of the Code. Performance targets shall be adjusted to
mitigate the unbudgeted impact of material, unusual or nonrecurring gains and losses, accounting changes or
other extraordinary events not foreseen at the time the targets were set unless the Plan Administrator
provides otherwise at the time of establishing the targets. The applicable performance measurement period
may not be less than three months nor more than 10 years.
3. Any new, substituted or additional securities or other property (including money paid other than as a
regular cash dividend) which the Participant may have the right to receive with respect to the Participant’s
unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation’s receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant’s unvested shares of Common Stock and (ii) such escrow
arrangements as the Plan Administrator shall deem appropriate.
4. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued
to the Participant under the Stock Issuance and Cash Bonus Program, whether or not the Participant’s
interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to
receive any dividends paid on such shares, subject to any applicable vesting requirements. The Participant
shall not have any stockholder rights with respect to the shares of Common Stock subject to a restricted
stock unit or share right award until that award vests and the shares of Common Stock are actually issued
thereunder. However, dividend-equivalent units may be paid or credited, either in cash or in actual or
phantom shares of Common Stock, on outstanding restricted stock unit or share right awards, subject to such
terms and conditions as the Plan Administrator may deem appropriate.
5. Should the Participant cease to remain in Service while holding one or more unvested shares of
Common Stock issued under the Stock Issuance and Cash Bonus Program or should the performance
objectives not be attained with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and the Participant shall have
no further stockholder rights with respect to those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration paid in cash or cash equivalent, the Corporation shall
repay to the Participant the lower of (i) the cash consideration paid for the surrendered shares or (ii) the Fair
Market Value of those shares at the time of cancellation.
6. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more
unvested shares of Common Stock which would otherwise occur upon the cessation of the Participant’s
Service or the non-attainment of the performance objectives applicable to those shares. Any such waiver
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