SanDisk 2010 Annual Report Download - page 99

Proxy Statement
ARTICLE FOUR
AUTOMATIC GRANT PROGRAM
I. OPTION TERMS
A. Automatic Grants. The Automatic Grant Program under this Article Four shall supersede and replace
the Corporation’s 1995 Non-Employee Director Stock Option Plan, and no further stock option grants shall be
made under that plan on or after the Plan Effective Date. However, all options outstanding under that plan on the
Plan Effective Date shall continue in full force and effect in accordance with their terms, and no provision of this
Plan shall be deemed to affect or otherwise modify the rights or obligations of the holders of those options with
respect to their acquisition of shares of Common Stock thereunder.
Option grants shall be made pursuant to the Automatic Grant Program in effect under this Article Four as
follows:
1. Initial Grant: Each individual who is first elected or appointed as a non-employee Board member at
any time on or after the Plan Effective Date shall automatically be granted, on the date of such initial
election or appointment, a Non-Statutory Option to purchase not more than one hundred fifty thousand
(150,000) shares of Common Stock, provided that individual has not been in the employ of the Corporation
or any Parent or Subsidiary during the immediately preceding twelve (12) months. The actual number of
shares for which such initial option grant shall be made shall (subject to the 150,000-share limit) be
determined by the Plan Administrator at the time of each such grant.
2. Annual Grants: On the date of each annual stockholders meeting, beginning with the 2005 Annual
Meeting, each individual who is to continue to serve as a non-employee Board member, whether or not that
individual is standing for re-election to the Board at that particular annual meeting, shall automatically be
granted a Non-Statutory Option to purchase not more than forty thousand (40,000) shares of Common
Stock, provided that such individual has served as a non-employee Board member for a period of at least six
(6) months. There shall be no limit on the number of such annual share option grants any one continuing
non-employee Board member may receive over his or her period of Board service, and non-employee Board
members who have previously been in the employ of the Corporation (or any Parent or Subsidiary) shall be
eligible to receive one or more such annual option grants over their period of continued Board service. The
actual number of shares for which such annual option grants are made to each continuing non-employee
Board member shall (subject to the 40,000-share limit) be determined by the Plan Administrator on or
before the date of the annual stockholders meeting on which those grants are to be made.
B. Exercise Price.
1. The exercise price per share shall be equal to one hundred percent (100%) of the Fair Market Value
per share of Common Stock on the option grant date.
2. The exercise price shall be payable in one or more of the alternative forms authorized under the
Discretionary Grant Program. Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.
C. Option Term. Each option shall have a maximum term of seven (7) years measured from the option
grant date, subject to earlier termination following the Optionee’s cessation of Service.
D. Exercise and Vesting of Options. Each option shall be immediately exercisable for any or all of the
option shares. However, any unvested shares purchased under the option shall be subject to repurchase by the
Corporation, at 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, upon the Optionee’s cessation of Service prior to vesting in those
shares. The shares subject to each initial 150,000-share-or-less grant shall vest, and the Corporation’s repurchase
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