SanDisk 2012 Annual Report Download - page 38

Each share of Common Stock which may be issued pursuant to the Discretionary Grant Program shall be
counted against the shares of Common Stock authorized for issuance under the 2013 Plan as one (1) share of
Common Stock. Each share of Common Stock which may be issued pursuant to the Stock Issuance and Cash
Bonus Program shall be counted against the shares of Common Stock authorized for issuance under the 2013
Plan as 1.5 shares of Common Stock. To the extent that a share of Common Stock that was subject to a Full
Value Award expires or terminates or is otherwise forfeited to, or repurchased by, the Company shall count as
having returned 1.5 shares of Common Stock to the total number of shares of Common Stock which are available
for future grant or sale under the 2013 Plan.
No participant in the 2013 Plan may receive option grants, stand-alone stock appreciation rights, direct stock
issuances (whether vested or unvested) or other share-based awards for more than 1,000,000 shares of Common
Stock in the aggregate in any single calendar year, subject to adjustment for subsequent stock splits, stock
dividends and similar transactions, provided that, with regard to Non-Employee Directors, this limitation shall be
150,000 shares of Common Stock in the aggregate per calendar year. This limitation will assure that any
deductions to which the Company would otherwise be entitled upon the exercise of stock options or stock
appreciation rights granted under the Discretionary Grant Program will not be subject to the $1 million limitation
on the income tax deductibility of compensation paid per executive officer imposed under Section 162(m). In
addition, one or more shares issued under the Stock Issuance and Cash Bonus Program may also qualify as
performance-based compensation that is not subject to the Section 162(m) limitation, if the vesting of those
shares is tied solely to the attainment of one or more of the corporate performance milestones discussed below in
the summary description of that program.
The shares of Common Stock issuable under the 2013 Plan may be drawn from shares of the Company’s
authorized but unissued Common Stock or from shares of Common Stock that the Company acquires, including
shares purchased on the open market or in private transactions.
Shares subject to any outstanding options or other awards under the 2013 Plan that remain unissued when
those options or awards expire or terminate will be available for subsequent grants and awards under the 2013
Plan. Any unvested shares issued under the 2013 Plan that are subsequently forfeited, or that the Company
repurchases at a price not greater than the original issue price paid per share pursuant to the Company’s
repurchase rights under the 2013 Plan, will be added back to the share reserve under the 2013 Plan and will
accordingly be available for subsequent issuance.
There are no net counting provisions in effect under the 2013 Plan. Accordingly, the following share
counting procedures will apply:
• Should the exercise price of an option be paid in shares of our Common Stock, then the number of
shares reserved for issuance under the 2013 Plan will be reduced by the gross number of shares for
which that option is exercised, and not by the net number of new shares issued under the exercised
option.
• Should shares of Common Stock otherwise issuable under the 2013 Plan be withheld by the Company
in satisfaction of the withholding taxes incurred in connection with the exercise of an option or stock
appreciation right or the issuance of fully-vested shares under the Stock Issuance and Cash Bonus
Program, then the number of shares of Common Stock available for issuance under the 2013 Plan will
be reduced by the full number of shares issuable under the exercised option or stock appreciation right
or the full number of fully-vested shares issuable under the Stock Issuance and Cash Bonus Program,
calculated in each instance prior to any such share withholding.
• Upon the exercise of any stock appreciation right granted under the 2013 Plan, the share reserve will be
reduced by the gross number of shares as to which such stock appreciation right is exercised, and not
by the net number of shares actually issued upon such exercise.
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