SanDisk 2010 Annual Report Download - page 76

Stock Options
Each stock option reported in column (d) of the table above was granted with a per-share exercise price
equal to the fair market value of a share of Common Stock on the grant date. For these purposes, and in
accordance with the terms of the 2005 Plan and the Company’s option grant practices, the fair market value is
equal to the closing price of a share of Common Stock on NASDAQ on the applicable grant date.
Each stock option granted to the Named Executive Officers in fiscal 2010 is subject to a four year vesting
schedule, with 25% of the option vesting on first anniversary of the date of grant, and the remaining 75% of the
option vesting in twelve substantially equal installments on each successive three month anniversary thereafter.
Once vested, each stock option will generally remain exercisable until its normal expiration date. Each of the
stock options granted to the Named Executive Officers in fiscal 2010 has a term of seven years. Outstanding
options, however, may terminate earlier in connection with a change in control transaction or a termination of the
Named Executive Officer’s employment. Subject to any accelerated vesting that may apply, the unvested portion
of the stock option will immediately terminate upon a termination of the Named Executive Officer’s
employment. The Named Executive Officer will generally have three months to exercise the vested portion of the
stock option following a termination of employment. This period is extended to twelve months if the termination
is on account of the Named Executive Officer’s death or permanent disability. However, if a Named Executive
Officer’s employment is terminated by the Company for “misconduct” (as determined under the plan),
outstanding stock options (whether vested or unvested) will immediately terminate.
The stock options granted to the Named Executive Officers during fiscal 2010 do not include any dividend
or dividend equivalent rights.
Amendment of Stock Options and Restricted Stock Units
As described in the Compensation Discussion and Analysis section above, in connection with Dr. Harari’s
retirement, the Company (i) modified the vesting of his time-based stock options to provide that such awards will
continue to vest on their current schedule over the term of his consulting agreement and that such awards will
vest in full on December 31, 2012, or upon a change in control of the Company if earlier; and (ii) accelerated the
vesting of 53,334 unvested restricted stock units to December 31, 2010.
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