SanDisk 2005 Annual Report Download - page 55

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
income and employment taxes required to be withheld by the Corporation by reason of such exercise 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.
2. The Plan Administrator shall have complete discretion, exercisable either at the time an option is
granted or at any time while the option remains outstanding, to:
(i) extend the period of time for which the option is to remain exercisable following the Optionee's
cessation of Service from the limited exercise period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of
the option term,
(ii) include an automatic extension provision whereby the specified post-Service exercise period in
effect for any option granted under this Article Two shall automatically be extended by an additional
period of time equal in duration to any interval within the specified post-Service exercise period during
which the exercise of that option or the immediate sale of the shares acquired under such option could
not be effected in compliance with applicable federal and state securities laws, but in no event shall such
an extension result in the continuation of such option beyond the expiration date of the term of that
option, and/or
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