SanDisk 2012 Annual Report Download - page 97

Proxy Statement
shall result in the immediate vesting of the Participant’s interest in the shares of Common Stock as to which
the waiver applies. Such waiver may be effected at any time, whether before or after the Participant’s
cessation of Service or the attainment or non-attainment of the applicable performance objectives. However,
no vesting requirements tied to the attainment of performance objectives may be waived with respect to
shares which were intended at the time of issuance to qualify as performance-based compensation under
Code Section 162(m), except in the event of the Participant’s Involuntary Termination or as otherwise
provided in Section II of this Article Three.
7. Outstanding share right awards, restricted stock units or cash bonus awards under the Stock Issuance
and Cash Bonus Program shall automatically terminate, and no shares of Common Stock or cash shall
actually be issued or paid in satisfaction of those awards or units, if the performance goals or Service
requirements established for such awards or units are not attained or satisfied. The Plan Administrator,
however, shall have the discretionary authority to (i) issue vested shares of Common Stock under one or
more outstanding share right awards or restricted stock units as to which the designated performance goals
or Service requirements have not been attained or satisfied, and (ii) award cash bonus payments that are not
intended to qualify as performance-based compensation under Section 162(m) of the Code.
However, no vesting or payment requirements tied to the attainment of performance goals may be
waived with respect to awards or units which were intended, at the time those awards or units were granted,
to qualify as performance-based compensation under Code Section 162(m), except in the event of the
Participant’s Involuntary Termination (and then only as determined in the Plan Administrator’s sole
discretion) or as otherwise provided in Section II of this Article Three.
8. Before any performance-based award under the Stock Issuance and Cash Bonus Program is paid and
to the extent required to qualify the award as performance-based compensation within the meaning of
Section 162(m) of the Code, the Plan Administrator must certify in writing that the performance target(s)
and any other material terms of the performance-based award were in fact timely satisfied.
9. The Plan Administrator will have the discretion to determine the restrictions or other limitations of
the individual awards granted under the Stock Issuance and Cash Bonus Program including the authority to
reduce awards, payouts or vesting or to pay no awards, in its sole discretion, if the Plan Administrator
preserves such authority at the time of grant by language to this effect in its authorizing resolutions or
otherwise.
II. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. All of the Corporation’s outstanding repurchase rights under the Stock Issuance and Cash Bonus Program
shall terminate automatically, and all the shares of Common Stock subject to those terminated rights shall
immediately vest in full subject to compliance with Section 409A of the Code, in the event of any Change in Control,
except to the extent (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) or
are otherwise to continue in full force and effect pursuant to the terms of the Change in Control transaction or
(ii) such accelerated vesting is precluded by other limitations imposed in the Stock Issuance Agreement.
B. Each outstanding restricted stock unit or share right award assumed in connection with a Change in
Control or otherwise continued in effect shall be adjusted immediately after the consummation of that Change in
Control so as to apply to the number and class of securities into which the shares of Common Stock subject to the
award immediately prior to the Change in Control would have been converted in consummation of such Change
in Control had those shares actually been outstanding at that time, and appropriate adjustments shall also be made
to the consideration (if any) payable per share thereunder, provided the aggregate amount of such consideration
shall remain the same. To the extent the actual holders of the Corporation’s outstanding Common Stock receive
cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation
may, in connection with the assumption or continuation of the outstanding restricted stock units or share right
awards, substitute one or more shares of its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Change in Control transaction.
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