SanDisk 2005 Annual Report Download - page 61

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 Article One.
A. Issue Price.
1. The issue price per share shall be fixed by the Plan Administrator, but shall not be less than one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the issuance date.
2. Shares of Common Stock may be issued under the Stock Issuance and Cash Bonus Program for
any of the following items of consideration which the Plan Administrator may deem appropriate in each
individual instance:
(i) cash or check made payable to the Corporation,
(ii) past services rendered to the Corporation (or any Parent or Subsidiary); or
(iii) any other valid consideration under the Delaware General Corporation Law.
B. Vesting Provisions.
1. Shares of Common Stock issued under the Stock Issuance and Cash Bonus Program may, in the
discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or
more installments over the Participant's period of Service or upon the attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested shares of Common Stock issued
under the Stock Issuance and Cash Bonus Program shall be determined by the Plan Administrator and
incorporated into the Stock Issuance Agreement. Shares of Common Stock may also be issued under the
Stock Issuance and Cash Bonus Program pursuant to share right awards or restricted stock units which entitle
the recipients to receive the shares underlying those awards or units upon the attainment of designated
performance goals or the satisfaction of specified Service requirements or upon the expiration of a designated
time period following the vesting of those awards or units, including (without limitation) a deferred
distribution date following the termination of the Participant's Service.
2. The Plan Administrator shall also have the discretionary authority, consistent with Code Sec-
tion 162(m), to structure one or more stock issuances, or restricted stock unit or share right awards or cash
bonus awards so that the shares of Common Stock or cash subject to those issuances or awards shall vest (or
vest and become issuable or payable) upon the achievement of certain pre-established corporate performance
goals based on one or more of the following criteria: (1) return on total stockholder equity; (2) earnings per
share of Common Stock; (3) net income or operating income (before or after taxes); (4) earnings before
interest, taxes, depreciation and amortization; (5) earnings before interest, taxes, depreciation, amortization
and charges for stock-based compensation, (6) sales or revenue targets; (7) return on assets, capital or
investment; (8) cash flow; (9) market share; (10) cost reduction goals; (11) budget comparisons;
(12) measures of customer satisfaction; (13) any combination of, or a specified increase in, any of the
foregoing; (14) new product development or successful completion of research and development projects; and
(15) the formation of joint ventures, research or development collaborations, or the completion of other
corporate transactions intended to enhance the Corporation's revenue or profitability or enhance its customer
base. 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.
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