SanDisk 2012 Annual Report Download - page 138

In connection with the convertible note hedge and warrant transactions, the dealers or their respective
affiliates:
• have entered into various over-the-counter cash-settled derivative transactions with respect to our
common stock concurrently with, or shortly following, the pricing of the notes; and
• may enter into, or may unwind, various over-the-counter cash-settled derivative transactions and/or
purchase or sell shares of our common stock in open market and/or privately negotiated transactions
following the pricing of the notes, including during any observation period related to a conversion of
notes.
The dealers or their respective affiliates are likely to modify their hedge positions, from time-to-time, prior
to conversion or maturity of the notes by purchasing and selling shares of our common stock, other of our
securities or other instruments they may wish to use in connection with such hedging. In particular, such hedging
modification may occur during any observation period for a conversion of the 1% Notes due 2013 and 1.5%
Notes due 2017, which may have a negative effect on the value of the consideration received in relation to the
conversion of those notes. In addition, we intend to exercise options we hold under the convertible note hedge
transactions whenever notes are converted. To unwind their hedge positions with respect to those exercised
options, the dealers or their respective affiliates expect to purchase or sell shares of our common stock in open
market and/or privately negotiated transactions and/or enter into or unwind various over-the-counter derivative
transactions with respect to our common stock during the observation period, if any, for the converted notes.
The effect, if any, of any of these transactions and activities on the market price of our common stock or the
1% Notes due 2013 and 1.5% Notes due 2017 will depend in part on market conditions and cannot be ascertained
at this time, but any of these activities could adversely affect the value of our common stock and the value of the
1% Notes due 2013 and 1.5% Notes due 2017, and as a result, the amount of cash and the number of shares of
common stock, if any, the holders will receive upon the conversion of the notes.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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