SanDisk 2010 Annual Report Download - page 90

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
(iii) permit the option to be exercised, during the applicable post-Service exercise period, not only
with respect to the number of vested shares of Common Stock for which such option is exercisable at
the time of the Optionee’s cessation of Service but also with respect to one or more additional
installments in which the Optionee would have vested had the Optionee continued in Service.
D. Stockholder Rights. The holder of an option shall have no stockholder rights with respect to the shares
subject to the option until such person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. Repurchase Rights. The Plan Administrator shall have the discretion to grant options which are
exercisable for unvested shares of Common Stock. Should the Optionee cease Service while such shares are
unvested, the Corporation shall have the right to repurchase any or all of those unvested shares at a price per
share equal to the lower of (i) the exercise price paid per share or (ii) the Fair Market Value per share of
Common Stock at the time of repurchase. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right.
F. Transferability of Options. The transferability of options granted under the Plan shall be governed by
the following provisions:
(i) Incentive Options: During the lifetime of the Optionee, Incentive Options shall be exercisable only
by the Optionee and shall not be assignable or transferable other than by will or the laws of inheritance
following the Optionee’s death.
(ii) Non-Statutory Options. Non-Statutory Options shall be subject to the same limitation on transfer as
Incentive Options, except that the Plan Administrator may structure one or more Non-Statutory Options so
A-6