SanDisk 2012 Annual Report Download - page 42

(ii) Immediately prior to the consummation of the change in control, all outstanding options or stock
appreciation rights under the Discretionary Grant Program shall terminate and cease to be outstanding,
except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in
full force and effect pursuant to the terms of the change in control transaction.
(iii) All unvested shares outstanding under the Discretionary Grant and Stock Issuance and Cash Bonus
Programs will immediately vest upon a change in control subject to compliance with Section 409A of
the Code, except to the extent the Company’s repurchase rights with respect to those shares are to be
assigned to the successor corporation or otherwise continued in effect. Each outstanding RSU or other
share-based award under the Stock Issuance and Cash Bonus Program will vest as to the number of
shares of Common Stock subject to such unit or award upon the occurrence of a change in control,
unless the unit or award is assumed by the successor corporation or otherwise continued in effect or is
replaced with a cash retention program which preserves the fair market value of the underlying shares
and provides for subsequent payout of that value in accordance with the same vesting schedule in effect
for those shares.
(iv) The plan administrator will have complete discretion to grant one or more options or stock appreciation
rights under the Discretionary Grant Program which will vest and become exercisable for all the shares
in the event an individual’s service with the Company or the successor entity is terminated (actually or
constructively) within a designated period following a change in control transaction in which those
options or stock appreciation rights are assumed or otherwise continued in effect. The vesting of
outstanding shares and the vesting and issuance of the shares of Common Stock subject to outstanding
RSUs or other share-based awards under the Stock Issuance and Cash Bonus Program may also be
structured to accelerate upon similar terms and conditions.
(v) The plan administrator will have the discretion to structure one or more option grants or stock
appreciation rights under the Discretionary Grant Program so that those options or stock appreciation
rights will immediately vest upon a change in control, whether or not the options or stock appreciation
rights are to be assumed or otherwise continued in effect. The plan administrator may also structure
unvested stock issuances or RSUs or other share rights awards under the Stock Issuance and Cash
Bonus Program so that those issuances or awards will in all events vest immediately upon a change in
control. In addition, the plan administrator will have the discretionary authority to structure one or
more of the Company’s repurchase rights under the Discretionary Grant Program so that those rights
will immediately terminate upon the consummation of the change in control transaction, and the shares
subject to those terminated rights shall thereupon vest in full.
(vi) A change in control will be deemed to occur in the event (a) the Company is acquired by merger or
asset sale, (b) there occurs a stockholder-approved sale, transfer or other disposition (including in
whole or in part through one or more licensing arrangements) of all or substantially all of the
Company’s assets, or (c) there occurs any transaction or series of related transactions pursuant to which
any person or group of related persons becomes directly or indirectly the beneficial owner of securities
possessing (or convertible into or exercisable for securities possessing) more than fifty percent
(50%) of the total combined voting power of the Company’s securities outstanding immediately after
the consummation of such transaction or series of related transactions, whether such transaction
involves a direct issuance from the Company or the acquisition of outstanding securities held by one or
more of the Company’s stockholders. Notwithstanding the foregoing, to the extent required to avoid
the imposition of additional taxes under Section 409A of the Code, such transaction(s) will only
constitute a change in control for purposes of the payment timing of such award if such transaction(s)
also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
(vii) A hostile take-over will be deemed to occur if (a) there is a change in the majority of the Company’s
Board of Directors as a result of one or more contested elections for board membership or (b) securities
possessing more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are acquired pursuant to a tender or exchange offer made directly to the
Company’s stockholders which the Board of Directors does not recommend such stockholders to
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