SANDISK CORPORATION RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
EXHIBIT 10.1
SANDISK CORPORATION
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees and consultants and other independent advisors who provide services to the Corporation
(or any Parent or Subsidiary).
B. Participant is to render valuable services to the Corporation (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the Corporation’s award of restricted stock units and, subject to the terms
hereof, issuance of shares of Common Stock to the Participant under the Stock Issuance Program.
C. In addition to providing the terms and conditions of such award, this Agreement includes
the Participant’s agreement with respect to the satisfaction of tax withholding obligations
incurred in connection with prior grants of restricted stock units by the Corporation to the
Participant (if any) as set forth in Paragraph 7(c) below.
D. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix A.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Restricted Stock Units. The Corporation hereby awards to the Participant,
as of the Award Date, restricted stock units (“Restricted Stock Units”) under the Plan. Each
Restricted Stock Unit represents the right to receive one share of Common Stock on the vesting date
of that unit. The number of shares of Common Stock subject to the awarded Restricted Stock Units,
the applicable vesting schedule for those shares, the dates on which those vested shares shall
become issuable to Participant and the remaining terms and conditions governing the award (the
“Award”) shall be as set forth in this Agreement.
AWARD SUMMARY
Award Date: |
, 2008 | |
Number of Shares Subject to Award: |
shares of Common Stock (the "Shares") | |
Vesting Commencement Date |
, 2008 | |
Vesting Schedule: |
[To be determined by the Plan Administrator.] | |
Issuance Schedule |
The Shares in which the Participant vests in accordance | |
| with the foregoing Vesting Schedule will be issuable | ||
| immediately upon vesting, subject to the Corporation's | ||
| collection of the applicable Withholding Taxes. The | ||
| procedures pursuant to which the applicable Withholding | ||
| Taxes are to be collected are set forth in Paragraph 7 | ||
| of this Agreement. |
2. Limited Transferability. Prior to actual receipt of the Shares which vest
hereunder, the Participant may not transfer any interest in the Award or the underlying Shares. Any
Shares which vest hereunder but which otherwise remain unissued at the time of the Participant’s
death may be transferred pursuant to the provisions of the Participant’s will or the laws of
inheritance or to the Participant’s designated beneficiary or beneficiaries of this Award. The
Participant may also direct the Corporation to issue the stock certificates for any Shares which in
fact vest and become issuable under the Award during his or her lifetime to one or
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more designated family members or a trust established for the Participant and/or his or her family members. The
Participant may make such a beneficiary designation or certificate directive at any time by filing
the appropriate form with the Plan Administrator or its designee.
3. Cessation of Service. Should the Participant cease Service for any reason prior to
vesting in one or more Restricted Stock Units subject to this Award, then the Award will be
immediately cancelled with respect to those unvested Restricted Stock Units. The Participant shall
thereupon cease to have any right or entitlement to receive any Shares under those cancelled units.
4. Stockholder Rights and Dividend Equivalents
(a) The holder of this Award shall not have any stockholder rights, including voting or
dividend rights, with respect to the Shares subject to the Award until the Participant becomes the
record holder of those Shares following their actual issuance upon the Corporation’s collection of
the applicable Withholding Taxes.
(b) Notwithstanding the foregoing, should any dividend or other distribution payable other
than in shares of Common Stock, whether regular or extraordinary, be declared and paid on the
outstanding Common Stock while one or more Shares remain subject to this Award (i.e., those Shares
are not otherwise issued and outstanding for purposes of entitlement to the dividend or
distribution), then a special book account shall be established for the Participant and credited
with a phantom dividend equivalent to the actual dividend or distribution which would have been
paid on those Shares had they been issued and outstanding and entitled to that dividend or
distribution. As the Shares subsequently vest hereunder, the phantom dividend equivalents credited
to those Shares in the book account shall be distributed to the Participant (in cash or such other
form as the Plan Administrator may deem appropriate in its sole discretion) concurrently with the
issuance of the vested Shares to which those phantom dividend equivalents relate. However, each
such distribution shall be subject to the Corporation’s collection of the Withholding Taxes
applicable to that distribution.
5. Change of Control.
(a) Any Restricted Stock Units subject to this Award at the time of a Change in Control may
be assumed by the successor entity or otherwise continued in full force and effect or may be
replaced with a cash incentive program of the successor entity which preserves the Fair Market
Value of the unvested shares of Common Stock subject to the Award at the time of the Change in
Control and provides for subsequent payout of that value in accordance with the vesting schedule
applicable to the Award. In the event of such assumption or continuation of the Award or such
replacement of the Award with a cash incentive program, no accelerated vesting of the Restricted
Stock Units shall occur at the time of the Change in Control.
(b) In the event the Award is assumed or otherwise continued in effect, the Restricted Stock
Units subject to the Award shall be adjusted immediately after the consummation of the Change in
Control so as to apply to the number and class of securities into which the Shares subject to those
units immediately prior to the Change in Control would have been converted in consummation of that
Change in Control had those Shares actually been issued and outstanding at that time. To the extent
the actual holders of the outstanding Common Stock receive cash consideration for their Common
Stock in consummation of the Change in Control, the successor corporation (or parent entity) may,
in connection with the assumption or continuation of the Restricted Stock Units subject to the
Award at that time, 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 the Change in Control
transaction, provided such common stock is readily tradable on an established U.S. securities
exchange or market.
(c) If the Restricted Stock Units subject to this Award at the time of the Change in Control
are not assumed or otherwise continued in effect or replaced with a cash incentive program in
accordance with Paragraph 5(a), then those units will vest immediately prior to the closing of the
Change in Control. The Shares subject to those vested units will be issued immediately upon such
vesting (or otherwise converted into the right to receive the same consideration per share of
Common Stock payable to the other stockholders of the Corporation in consummation of that Change in
Control), subject to the Corporation’s collection of the applicable Withholding Taxes pursuant to
the provisions of Paragraph 7.
(d) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
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6. Adjustment in Shares. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to the total number and/or class
of securities issuable pursuant to this Award in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder.
7. Issuance of Shares of Common Stock.
(a) As soon as administratively practicable following each date one or more Restricted Stock
Units vest in accordance with the provisions of this Agreement, the Corporation shall issue to or
on behalf of the Participant a certificate (which may be in electronic form) for the shares of
Common Stock payable in respect of such vested Restricted Stock Units under the Award and shall
concurrently distribute to the Participant any phantom dividend equivalents with respect to those
Shares, subject in each instance to the Corporation’s collection of the applicable Withholding
Taxes.
(b) Subject to Section VI of Article 5 of the Plan, upon any distribution of Shares in
respect of the Restricted Stock Units, the Corporation shall automatically reduce the number of
shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued
at their then Fair Market Value, to satisfy any withholding obligations of the Corporation or its
Subsidiaries with respect to such distribution of shares at the minimum applicable withholding
rates. In the event that the Corporation cannot legally satisfy such withholding obligations by
such reduction of shares, or in the event of a cash payment or any other withholding event in
respect of the Restricted Stock Units, the Corporation (or a Subsidiary) shall be entitled to
require a cash payment by or on behalf of the Participant and/or to deduct from other compensation
payable to the Participant any sums required by federal, state or local tax law to be withheld with
respect to such distribution or payment.
(c) Notwithstanding any other provision herein or in the Plan, as a condition to the grant of
the Award and all rights of the Participant hereunder, the Participant agrees that, with respect to
all restricted stock units granted by the Corporation to the Participant that are outstanding and
unvested as of the date hereof, the Corporation shall automatically reduce the number of shares
otherwise deliverable in connection with each vesting of such restricted stock units that occurs at
any time on or after the date hereof, so as to satisfy the tax withholding obligations incurred by
the Corporation (or a Subsidiary) in connection with such vesting event, such reduction in shares
to be made in accordance with and subject to the provisions of Paragraph 7(b) above.
(d) Except as otherwise provided in Paragraph 5 or this Paragraph 7, the settlement of all
Restricted Stock Units which vest under the Award shall be made solely in shares of Common Stock.
In no event, however, shall any fractional shares be issued. Accordingly, the total number of
shares of Common Stock to be issued at the time the Award vests shall, to the extent necessary, be
rounded down to the next whole share in order to avoid the issuance of a fractional share.
8. Compliance with Laws and Regulations. The issuance of shares of Common Stock
pursuant to the Award shall be subject to compliance by the Corporation and Participant with all
applicable requirements of law relating thereto and with all applicable regulations of any stock
exchange on which the Common Stock may be listed for trading at the time of such issuance.
9. Notices. Any notice required to be given or delivered to the Corporation under the
terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered to Participant shall be in writing
and addressed to Participant at the address indicated below Participant’s signature line on this
Agreement. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.
10. Successors and Assigns. Except to the extent otherwise provided in this
Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Participant, Participant’s assigns, the legal
representatives, heirs and legatees of Participant’s estate and any beneficiaries of the Award
designated by Participant.
11. Construction. This Agreement and the Award evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest in the Award.
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12. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.
13. Employment at Will. Nothing in this Agreement or in the Plan shall confer upon
Participant any right to continue in Service for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Participant) or of Participant, which rights are hereby expressly reserved
by each, to terminate Participant’s Service at any time for any reason, with or without cause.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
indicated above.
| SANDISK CORPORATION | ||||||
| By: | ||||||
| Title: | ||||||
| PARTICIPANT | ||||||
| Signature: | ||||||
| Address: | ||||||
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APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.
B. Award shall mean the award of Restricted Stock Units made to the Participant
pursuant to the terms of this Agreement.
C. Award Date shall mean the date the Restricted Stock Units are awarded to
Participant pursuant to the Agreement and shall be set forth in Paragraph 1 of the Agreement.
D. Board shall mean the Corporation’s Board of Directors.
E. Change in Control shall mean a change in ownership or control of the Corporation
effected through any of the following transactions:
(i) a merger or consolidation approved by the Corporation’s stockholders, unless
securities possessing more than fifty percent (50%) of the total combined voting power of the
voting securities of the successor corporation are immediately thereafter beneficially owned,
directly or indirectly and substantially in the same proportion, by the persons who
beneficially owned the Corporation’s outstanding voting securities immediately prior to such
transaction,
(ii) the sale, transfer or other disposition (including in whole or in part through one
or more licensing arrangements) of all or substantially all of the Corporation’s assets
approved by the Corporation’s stockholders, or
(iii) the acquisition, directly or indirectly by any person or related group of persons
(other than the Corporation or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Corporation), of beneficial ownership (within the
meaning of Rule 13d-3 of the ▇▇▇▇ ▇▇▇) of securities possessing more than fifty percent (50%)
of the total combined voting power of the Corporation’s outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation’s stockholders.
F. Code shall mean the Internal Revenue Code of 1986, as amended.
G. Common Stock shall mean shares of the Corporation’s common stock.
H. Corporation shall mean SanDisk Corporation, a Delaware corporation, and any
successor corporation to all or substantially all of the assets or voting stock of SanDisk
Corporation which shall by appropriate action adopt the Plan.
I. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.
J. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the NASDAQ Global Market, then the
Fair Market Value shall be the closing selling price per share of Common Stock at the close
of regular hours trading (i.e., before after- hours trading begins) on the NASDAQ Global
Market on the date in question, as such price is reported by the National
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Association of Securities Dealers. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock at the close of
regular hours trading (i.e., before after-hours trading begins) on the date in question on
the Stock Exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the last preceding
date for which such quotation exists.
K. 1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to
time.
L. Participant shall mean the person to whom the Award is made pursuant to the
Agreement.
M. Parent shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
N. Plan shall mean the Corporation’s Amended and Restated 2005 Incentive Plan.
O. Plan Administrator shall mean either the Board or a committee of the Board acting
in its capacity as administrator of the Plan.
P. Service shall mean the Participant’s performance of services for the Corporation
(or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor. For purposes of this Agreement, Participant shall
be deemed to cease Service immediately upon the occurrence of the either of the following events:
(i) Participant no longer performs services in any of the foregoing capacities for the Corporation
(or any Parent or Subsidiary) or (ii) the entity for which Participant performs such services
ceases to remain a Parent or Subsidiary of the Corporation, even though Participant may
subsequently continue to perform services for that entity. Service shall not be deemed to cease
during a period of military leave, sick leave or other personal leave approved by the Corporation;
provided, however, that except to the extent otherwise required by law or expressly authorized by
the Plan Administrator or by the Corporation’s written policy on leaves of absence, no Service
credit shall be given for vesting purposes for any period the Participant is on a leave of absence.
Q. Stock Exchange shall mean the American Stock Exchange or the New York Stock
Exchange.
R. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
S. Vesting Commencement Date shall mean the date from which the Participant’s Service
is measured for purposes of determining vesting of the Restricted Stock Units and shall be set
forth in Paragraph 1 of the Agreement.
T. Withholding Taxes shall mean the federal, state and local income taxes and the
employee portion of the federal, state and local employment taxes required to be withheld by the
Corporation in connection with the issuance of the shares of Common Stock which vest under the
Award and any phantom dividend equivalents distributed with respect to those shares.
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