SanDisk 2010 Annual Report Download - page 40

share in effect under each outstanding option or stock appreciation right; (vi) the number and/or class of
securities subject to each outstanding restricted stock unit or other stock-based award and the cash consideration
(if any) payable per share; and (vii) 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.
Such adjustments will be designed to preclude any dilution or enlargement of benefits under the 2005 Plan or the
outstanding awards thereunder.
Valuation. The fair market value per share of the Company’s Common Stock on any relevant date under the
2005 Plan will be deemed to be equal to the closing selling price per share on that date on the NASDAQ. On
February 25, 2011, the fair market value per share of Common Stock determined on such basis was $50.18.
Stockholder Rights and Transferability. No optionee will have any stockholder rights with respect to the
option shares until such optionee has exercised the option and paid the exercise price for the purchased shares.
The holder of a stock appreciation right will not have any stockholder rights with respect to the shares subject to
that right unless and until such person exercises the right and becomes the holder of record of any shares of the
Company’s Common Stock distributed upon such exercise. Options are not assignable or transferable other than
by will or the laws of inheritance following the optionee’s death, and during the optionee’s lifetime, the option
may only be exercised by the optionee. However, the plan administrator may structure one or more non-statutory
options under the 2005 Plan so that those options will be transferable during optionee’s lifetime to one or more
members of the optionee’s family or to a trust established for the optionee and/or one or more such family
members or to the optionee’s former spouse, to the extent such transfer is in connection with the optionee’s estate
plan or pursuant to a domestic relations order. Stand-alone stock appreciation rights will be subject to the same
transferability restrictions applicable to non-statutory options.
A participant will have certain stockholder rights with respect to the shares of Common Stock issued to him
or her under the 2005 Plan, whether or not his or her interest in those shares is vested. Accordingly, the
participant will have the right to vote such shares and to receive dividends paid on such shares, but will not have
the right to transfer such shares prior to vesting. A participant will not have any stockholder rights with respect to
the shares of Common Stock subject to a restricted stock unit or other share right award until that unit or award
vests and the shares of Common Stock are actually issued thereunder. However, dividend-equivalent units may
be paid or credited, either in cash or in actual or phantom shares of Common Stock, on outstanding restricted
stock units or other share-right awards, subject to such terms and conditions as the plan administrator may deem
appropriate.
Special Tax Election.The plan administrator may provide one or more holders of options, stock
appreciation rights, vested or unvested stock issuances, restricted stock units or any other stock-based awards
under the 2005 Plan with the right to have the Company withhold a portion of the shares otherwise issuable to
such individuals in satisfaction of the withholding taxes to which they become subject in connection with the
exercise of those options or stock appreciation rights, the issuance of vested shares or the vesting of unvested
shares issued to them. Alternatively, the plan administrator may allow such individuals to deliver previously
acquired shares of the Company’s Common Stock in payment of such withholding tax liability.
Amendment and Termination.The Board may amend or modify the 2005 Plan at any time, subject to any
stockholder approval requirements under applicable law or regulation or pursuant to the listing standards of the
stock exchange on which shares of Common Stock are at the time primarily traded. Unless sooner terminated by
the Board, the 2005 Plan will terminate on the earliest of (i) March 15, 2015, (ii) the date on which all shares
available for issuance under the 2005 Plan have been issued as fully-vested shares or (iii) the termination of all
outstanding options, stock appreciation rights, restricted stock units and other stock-based awards in connection
with certain changes in control or ownership.
Subplans.The Compensation Committee of the Company’s Board of Directors will have the authority to
adopt and implement from time to time such subplans under the 2005 Plan as it may deem necessary in order to
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