SanDisk 2012 Annual Report Download - page 30

installment on the earlier of (i) the first anniversary of the grant date or (ii) the day immediately preceding the
next annual meeting of the Company’s stockholders following the grant date. Pursuant to the terms of the 2005
Plan, RSUs granted to the Company’s Non-Employee Directors will vest on an accelerated basis in connection
with a change in control of the Company. Upon the cessation of the Non-Employee Director’s service, any
unvested RSUs will generally terminate. However, RSUs granted to a Non-Employee Director vest in full if the
Non-Employee Director’s cessation of service is as a result of the Director’s death or permanent disability.
RSUs will generally be paid in an equivalent number of shares of the Common Stock as they vest.
Non-Employee Directors are not entitled to voting or dividend rights with respect to the RSUs, and the RSUs
generally may not be transferred, except to the Company or to a beneficiary of the Non-Employee Director upon
his or her death. However, non-Employee Directors are entitled to the following dividend equivalent rights with
respect to the RSUs. If the Company pays a cash dividend on its Common Stock and the dividend record date
occurs after the grant date and before all of the RSUs have either been paid or terminated, then the Company will
credit the Non-Employee Director’s bookkeeping account with an amount equal to (i) the per-share cash dividend
paid by the Company on its Common Stock with respect to the dividend record date, multiplied by (ii) the total
number of outstanding and unpaid RSUs (including any unvested RSUs) as of the dividend record date. These
dividend equivalents will be subject to the same vesting, payment and other terms and conditions as the original
RSUs to which they relate (except that the dividend equivalents may be paid in cash or such other form as the
plan administrator may deem appropriate).
The Board administers the 2005 Plan as to Non-Employee Director awards and has the ability to interpret
and make all required determinations under the plan, subject to plan limits. This authority includes making
required proportionate adjustments to outstanding awards to reflect any impact resulting from various corporate
events such as reorganizations, mergers and stock splits.
Required Vote
The required vote for the election of each Director is as described above under “Voting Rights.”
Recommendation of the Board of Directors
The Board believes that Proposal No. 1 is in the Company’s best interests and the best interests of its
stockholders’ and unanimously recommends a vote FOR the election of each of the Director nominees.
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