SanDisk 2005 Annual Report Download - page 53

D. The individuals who shall be eligible to participate in the Automatic Grant Program shall be limited
to (i) those individuals who first become non-employee Board members on or after the Plan Effective Date,
whether through appointment by the Board or election by the Corporation's stockholders, and (ii) those
individuals who continue to serve as non-employee Board members on or after the Plan Effective Date. A non-
employee Board member who has previously been in the employ of the Corporation (or any Parent or
Subsidiary) shall not be eligible to receive a grant under the Automatic Grant Program at the time he or she
first becomes a non-employee Board member, but shall be eligible to receive periodic grants under the
Automatic Grant Program while he or she continues to serve as a non-employee Board member.
V. STOCK SUBJECT TO THE PLAN; ANNUAL CASH LIMITATION
A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common
Stock, including shares repurchased by the Corporation on the open market. The number of shares of
Common Stock reserved for issuance over the term of the Plan shall be limited to twenty million seven
hundred thousand (20,700,000) shares. The Plan shall serve as the successor to the two Predecessor Plans,
and no further stock option grants shall be made under those Predecessor Plans on or after the Plan Effective
Date. However, all options outstanding under the Predecessor Plans on the Plan Effective Date shall continue
in full force and effect in accordance with their terms, and no provision of this Plan shall be deemed to affect
or otherwise modify the rights or obligations of the holders of those options with respect to their acquisition of
shares of Common Stock thereunder. To the extent any options outstanding under the Predecessor Plans on
the Plan Effective Date expire or terminate unexercised, the number of shares of Common Stock subject to
those expired or terminated options at the time of expiration or termination shall be added to the share reserve
under this Plan and shall accordingly be available for issuance hereunder, up to a maximum of an additional
ten million (10,000,000) shares.
B. Notwithstanding the foregoing, the maximum number of shares of Common Stock which may be
issued without cash consideration pursuant to the Stock Issuance and Cash Bonus Program shall not exceed
ten percent (10%) of the total number of shares of Common Stock from time to time authorized for issuance
under the Plan, including (without limitation): (i) any shares added to the Plan reserve by reason of the
expiration or termination of outstanding options under the Predecessor Plans prior to exercise, (ii) any
increases to the Plan reserve from time to time approved by the Corporation's stockholders and (iii) any
adjustments to the authorized share reserve effected in accordance with Section V.E. of this Article One.
C. No one person participating in the Plan may receive stock options, stand-alone stock appreciation
rights, direct stock issuances (whether vested or unvested) or other stock-based awards (whether in the form
of restricted stock units or other share-right awards) for more than one million (1,000,000) shares of Common
Stock in the aggregate per calendar year. In addition, the aggregate amount of compensation to be paid to any
one participant in respect of all performance-based awards under the Stock Issuance and Cash Bonus Program
payable only in cash and not related to shares of Common Stock and granted to that participant in any one
calendar year shall not exceed five million dollars ($5,000,000).
D. Shares of Common Stock subject to outstanding options or other awards made under the Plan shall
be available for subsequent issuance under the Plan to the extent those options or awards expire or terminate
for any reason prior to the issuance of the shares of Common Stock subject to those options or awards.
Unvested shares issued under the Plan and subsequently forfeited or repurchased by the Corporation, at a
price per share not greater than the original issue price paid per share, pursuant to the Corporation's
repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved for
issuance under the Plan and shall accordingly be available for subsequent reissuance. Should the exercise price
of an option under the Plan be paid with shares of Common Stock, then the authorized reserve of Common
Stock under the Plan shall be reduced by the gross number of shares for which that option is exercised, and
not by the net number of shares issued under the exercised stock option.
If shares of Common Stock otherwise issuable under the Plan are withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise of an option or stock appreciation
right or the issuance of fully-vested shares under the Stock Issuance and Cash Bonus Program, then the
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