SanDisk 2005 Annual Report Download - page 54

Proxy StatementProxy Statement
number of shares of Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares issuable under the exercised stock option or stock appreciation right or the gross number of
fully-vested shares issuable under the Stock Issuance and Cash Bonus Program, calculated in each instance
prior to any such share withholding.
E. If any change is made to the Common Stock by reason of any stock split, stock dividend,
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, appropriate adjustments shall be made by
the Plan Administrator to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the
maximum number and/or class of securities by which the share under the Plan may increase by reason of the
expiration or termination of unexercised options under the Predecessor Plans, (iii) the maximum number
and/or class of securities which may be issued without cash consideration under the Stock Issuance and Cash
Bonus Program, (iv) the maximum number and/or class of securities for which any one person may be
granted stock options, stand-alone stock appreciation rights, direct stock issuances and other stock-based
awards under the Plan per calendar year, (v) the maximum number and/or class of securities for which grants
may subsequently be made under the Automatic Grant Program to new and continuing non-employee Board
members, (vi) the number and/or class of securities and the exercise or base price per share in effect under
each outstanding option or stock appreciation right under the Plan and (vii) the number and/or class of
securities subject to each outstanding restricted stock unit or other stock-based award under the Plan and the
issue price (if any) payable per share. Such adjustments to the outstanding options, stock appreciation rights
or other stock-based awards are to be effected in a manner which shall preclude the enlargement or dilution of
rights and benefits under those options, stock appreciation rights or other stock-based awards. The
adjustments determined by the Plan Administrator shall be final, binding and conclusive.
F. Outstanding awards granted pursuant to the Plan shall in no way affect the right of the Corporation to
adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.
ARTICLE TWO
DISCRETIONARY GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply with the terms specified below.
Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
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
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