SanDisk 2012 Annual Report Download - page 91

Proxy Statement
conditions of the applicable agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised following the Optionee’s death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions
of this Section II, all the provisions of Articles One, Two and Four shall be applicable to Incentive Options.
Options which are specifically designated as Non-Statutory Options when issued under the Plan shall not be
subject to the terms of this Section II.
A. Eligibility. Incentive Options may only be granted to Employees.
B. Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock (determined as of the
respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive
Options during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000).
To the extent the Employee holds two (2) or more such options which become exercisable for the first time
in the same calendar year, then for purposes of the foregoing limitations on the exercisability of those options as
Incentive Options, such options shall be deemed to become first exercisable in that calendar year on the basis of
the chronological order in which they were granted, except to the extent otherwise provided under applicable law
or regulation.
C. 10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then
the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date, and the option term shall not exceed five (5) years measured
from the option grant date.
III. STOCK APPRECIATION RIGHTS
A. Authority. The Plan Administrator shall have full power and authority, exercisable in its sole discretion,
to grant stock appreciation rights in accordance with this Section III to selected Optionees or other individuals
eligible to receive option grants under the Discretionary Grant Program.
B. Types. Two types of stock appreciation rights shall be authorized for issuance under this Section III:
(i) tandem stock appreciation rights (“Tandem Rights”) and (ii) stand-alone stock appreciation rights
(“Stand-alone Rights”).
C. Tandem Rights. The following terms and conditions shall govern the grant and exercise of Tandem
Rights.
1. One or more Optionees may be granted a Tandem Right, exercisable upon such terms and conditions
as the Plan Administrator may establish, to elect between the exercise of the underlying option for shares of
Common Stock or the surrender of that option in exchange for a distribution from the Corporation in an
amount equal to the excess of (i) the Fair Market Value (on the option surrender date) of the number of
shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion
thereof) over (ii) the aggregate exercise price payable for such vested shares.
2. No such option surrender shall be effective unless it is approved by the Plan Administrator, either at
the time of the actual option surrender or at any earlier time. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this Section III shall be made in
shares of Common Stock valued at Fair Market Value on the option surrender date.
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