SanDisk 2010 Annual Report Download - page 101

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Proxy Statement
consummation of the Change in Control, each automatic option grant shall terminate and cease to be outstanding,
except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in effect
pursuant to the terms of the Change in Control transaction.
B. Should a Hostile Take-Over occur prior to the Optionee’s cessation of Service, then the shares of
Common Stock at the time subject to each outstanding option held by such Optionee under this Automatic Grant
Program but not otherwise vested shall automatically vest in full so that each such option shall, immediately prior
to the effective date of the Hostile Take-Over, become exercisable for all the option shares as fully vested shares
of Common Stock and may be exercised for any or all of those vested shares. Each such option shall remain
exercisable for such fully vested option shares until the expiration or sooner termination of the option term.
C. All outstanding repurchase rights under this under this Automatic Grant Program shall automatically
terminate, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, in
the event of any Change in Control or Hostile Take-Over.
D. Each option which is assumed in connection with a Change in Control or otherwise continued in effect
shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of
securities which would have been issuable to the Optionee in consummation of such Change in Control had the
option been exercised immediately prior to such Change in Control. Appropriate adjustments shall also be made
to the exercise price payable per share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same. To the extent the actual holders of the Corporation’s
outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change
in Control, the successor corporation may, in connection with the assumption or continuation of the outstanding
options under the Automatic Grant Program, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control
transaction.
III. REMAINING TERMS
The remaining terms of each grant shall be the same as the terms in effect for option grants made under the
Discretionary Grant Program.
IV. ALTERNATIVE AWARDS
The Compensation Committee shall have full power and authority to award, in lieu of one or more initial or
annual automatic option grants under this Article Four, unvested shares of Common Stock or restricted stock
units which in each instance have an aggregate Fair Market Value substantially equal to the fair value (as
determined for financial reporting purposes in accordance with Financial Accounting Standard 123R or any
successor standard) of the automatic option grant which such award replaces. Any such alternative award shall be
made at the same time the automatic option grant which it replaces would have been made, and the vesting
provisions (including vesting acceleration) applicable to such award shall be substantially the same as in effect
for the automatic option grant so replaced.
ARTICLE FIVE
MISCELLANEOUS
I. TAX WITHHOLDING
A. The Corporation’s obligation to deliver shares of Common Stock upon the exercise of options or stock
appreciation rights or the issuance or vesting of such shares under the Plan, or to make any other payment in
respect of any award granted under the Plan, shall be subject to the satisfaction of all applicable income and
employment tax withholding requirements.
A-17