Exhibit 10.5

SANDISK CORPORATION

STOCK OPTION AGREEMENT

RECITALS

     A. The Board has adopted the Plan for the purpose of retaining the services
of selected Employees, non-employee members of the Board (or the board of
directors of any Parent or Subsidiary) and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

     B. Optionee 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 grant
of an option to Optionee.

     C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Option. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

          2. Option Term. This option shall have a maximum term of seven
(7) years measured from the Grant Date and shall accordingly expire at the close
of business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6

          3. Limited Transferability.

               (a) This option shall be neither transferable nor assignable by
Optionee other than by will or the laws of inheritance following Optionee’s
death and may be exercised, during Optionee’s lifetime, only by Optionee.
However, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this option, and this option shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee’s death.

               (b) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may be assigned in whole or in part during
Optionee’s lifetime to one or more of the Optionee’s Family Members or to a
trust established for the exclusive benefit of Optionee and/or one or more such
Family Members, to the extent such assignment is in

 

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connection with the Optionee’s estate plan or pursuant to a domestic relations
order. The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this option immediately prior to such assignment.

          4. Dates of Exercise. This option shall become exercisable for the
Option Shares in one or more installments in accordance with the Exercise
Schedule set forth in the Grant Notice. As the option becomes exercisable for
such installments, those installments shall accumulate, and the option shall
remain exercisable for the accumulated installments until the Expiration Date or
sooner termination of the option term under Paragraph 5 or 6.

          5. Cessation of Service. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

               (a) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while this option is
outstanding, then Optionee (or any person or persons to whom this option is
transferred pursuant to a permitted transfer under Paragraph 3) shall have a
period of three (3) months (commencing with the first date following such
cessation of Service) during which to exercise this option, but in no event
shall this option be exercisable at any time after the Expiration Date.

               (b) Should Optionee die while this option is outstanding, then
this option may be exercised by (i) the personal representative of Optionee’s
estate or (ii) the person or persons to whom the option is transferred pursuant
to Optionee’s will or the laws of inheritance following Optionee’s death or to
whom the option is transferred during Optionee’s lifetime pursuant to a
permitted transfer under Paragraph 3, as the case may be. However, if Optionee
dies while holding this option and has an effective beneficiary designation in
effect for this option at the time of his or her death, then the designated
beneficiary or beneficiaries shall have the exclusive right to exercise this
option following Optionee’s death. Any such right to exercise this option shall
lapse, and this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period following the date of
Optionee’s death or (ii) the Expiration Date.

               (c) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee (or any person or
persons to whom this option is transferred pursuant to a permitted transfer
under Paragraph 3) shall have a period of twelve (12) months (commencing with
the first day following such cessation of Service) during which to exercise this
option. In no event shall this option be exercisable at any time after the
Expiration Date.

               (d) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares for which this option is, at the time of Optionee’s cessation of
Service, vested and exercisable pursuant to the Exercise Schedule specified in
the Grant Notice or the special vesting acceleration provisions of Paragraph 6.
This option shall not vest or become exercisable for any additional Option
Shares,

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whether pursuant to the normal Exercise Schedule specified in the Grant Notice
or the special vesting acceleration provisions of Paragraph 6, following the
Optionee’s cessation of Service, except to the extent (if any) specifically
authorized by the Plan Administrator pursuant to an express written agreement
with the Optionee. Upon the expiration of such limited exercise period or (if
earlier) upon the Expiration Date, this option shall terminate and cease to be
outstanding for any exercisable Option Shares for which the option has not
otherwise been exercised.

               (e) Should Optionee’s Service be terminated for Misconduct or
should Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to remain
outstanding.

          6. Special Acceleration of Option.

               (a) This option, to the extent outstanding at the time of a
Change in Control but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the effective date of
such Change in Control, become exercisable for all of the Option Shares at the
time subject to this option and may be exercised for any or all of those Option
Shares as fully vested shares of Common Stock. However, this option shall not
become exercisable on such an accelerated basis, if and to the extent: (i) this
option is to be assumed by the successor corporation (or parent thereof) or is
otherwise to be continued in full force and effect pursuant to the terms of the
Change in Control transaction or (ii) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing at the time of the Change in Control on any Option Shares for which
this option is not otherwise at that time exercisable (the excess of the Fair
Market Value of those Option Shares over the aggregate Exercise Price payable
for such shares) and provides for subsequent payout of that spread in accordance
with the same Exercise Schedule for those Option Shares as set forth in the
Grant Notice.

               (b) Immediately following the Change in Control, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise continued in effect
pursuant to the terms of the Change in Control transaction.

               (c) If this option is assumed in connection with a Change in
Control or otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities which would have been issuable to Optionee in
consummation of such Change in Control had the option been exercised immediately
prior to such Change in Control, and appropriate adjustments shall also be made
to the Exercise Price, provided the aggregate Exercise Price 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 this option, 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, provided such common
stock is readily tradable on an established U.S. securities exchange or market.

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               (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.

          7. Adjustment in Option 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 (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

          8. Stockholder Rights. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:

                    (i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised or comply with
such other procedures as the Corporation may establish for notifying the
Corporation of the exercise of this option for one or more Option Shares.

                    (ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:

                         (A) cash or check made payable to the Corporation;

                         (B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for any requisite period
necessary to avoid a charge to the Corporation’s earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or

                         (C) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising the
option) shall concurrently provide irrevocable instructions (i) to a brokerage
firm (reasonably satisfactory to the Corporation for purposes of administering
such procedure in accordance with the Corporation’s
pre-clearance/pre-notification policies) to effect the

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      immediate sale of the purchased shares and remit to the Corporation, out
of the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate Exercise Price payable for the purchased shares plus all
applicable income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (ii) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm on
such settlement date in order to complete the sale.

               Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise (or other notification procedure)
delivered to the Corporation in connection with the option exercise.

                    (iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee) have
the right to exercise this option.

                    (iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of
all applicable income and employment tax withholding requirements applicable to
the option exercise.

               (b) As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.

               (c) In no event may this option be exercised for any fractional
shares.

          10. Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.

               (b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.

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          11. Successors and Assigns. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee’s assigns, the legal representatives, heirs and legatees of
Optionee’s estate and any beneficiaries of this option designated by Optionee.

          12. 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 Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee’s signature line on the Grant Notice. 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.

          13. Construction. This Agreement and the option 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 this option.

          14. 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.

          15. Excess Shares. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.

          16. Additional Terms Applicable to an Incentive Option. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

               (a) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date Optionee ceases to
be an Employee by reason of Permanent Disability.

               (b) No installment under this option shall qualify for favorable
tax treatment as an Incentive Option if (and to the extent) the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or any other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any

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other option plan of the Corporation or any Parent or Subsidiary) first become
exercisable during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year, this option shall nevertheless
become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.

               (c) Should the exercisability of this option be accelerated upon
a Change in Control, then this option shall qualify for favorable tax treatment
as an Incentive Option only to the extent the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which this option first
becomes exercisable in the calendar year in which the Change in Control
transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Change in Control, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

               (d) Should Optionee hold, in addition to this option, one or more
other options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this option, then for purposes of the
foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become
first exercisable in that calendar year, on the basis of the chronological order
in which such options were granted, except to the extent otherwise provided
under applicable law or regulation.

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APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. Agreement shall mean this Stock Option Agreement.

          B. Board shall mean the Corporation’s Board of Directors.

          C. Change in Control shall mean a change in ownership or control of
the Corporation effected through any of the following transactions:

               (i) a merger, consolidation or other reorganization approved by
the Corporation’s stockholders, unless securities representing 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 in substantially the same proportion, by the persons who
beneficially owned the Corporation’s outstanding voting securities immediately
prior to such transaction, or

               (ii) 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 Corporation’s assets, or

               (iii) the closing of any transaction or series of related
transactions pursuant to which any person or any group of persons comprising a
“group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the
Corporation or a person that, prior to such transaction or series of related
transactions, directly or indirectly controls, is controlled by or is under
common control with, the Corporation) becomes directly or indirectly the
beneficial owner (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing (or convertible into or exercisable for securities
possessing) more than fifty percent (50%) of the total combined voting power of
the Corporation’s securities (as measured in terms of the power to vote with
respect to the election of Board members) outstanding immediately after the
consummation of such transaction or series of related transactions, whether such
transaction involves a direct issuance from the Corporation or the acquisition
of outstanding securities held by one or more of the Corporation’s existing
stockholders.

          D. Code shall mean the Internal Revenue Code of 1986, as amended.

          E. Common Stock shall mean shares of the Corporation’s common stock.

          F. 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.

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          G. 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.

          H. Exercise Date shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

          I. Exercise Price shall mean the exercise price per Option Share as
specified in the Grant Notice.

          J. Exercise Schedule shall mean the schedule set forth in the Grant
Notice pursuant to which the option is to become exercisable for the Option
Shares in one or more installments over the Optionee’s period of Service.

          K. Expiration Date shall mean the date on which the option expires as
specified in the Grant Notice.

          L. 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
National 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 National Market on the date in
question, as such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market. 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.

          M. Family Member shall mean any of the following members of the
Optionee’s family: any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, bother-in-law or sister-in-law.

          N. Grant Date shall mean the date of grant of the option as specified
in the Grant Notice.

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          O. Grant Notice shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

          P. Incentive Option shall mean an option which satisfies the
requirements of Code Section 422.

          Q. Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not in any way
preclude or restrict the right of the Corporation (or any Parent or Subsidiary)
to discharge or dismiss Optionee or any other person in the Service of the
Corporation (or any Parent or Subsidiary) for any other acts or omissions, but
such other acts or omissions shall not be deemed, for purposes of the Plan or
this Agreement, to constitute grounds for termination for Misconduct.

          R. Non-Statutory Option shall mean an option not intended to satisfy
the requirements of Code Section 422.

          S. Notice of Exercise shall mean the notice of option exercise in the
form prescribed by the Corporation..

          T. Option Shares shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.

          U. Optionee shall mean the person to whom the option is granted as
specified in the Grant Notice.

          V. 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.

          W. Permanent Disability shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or to be of
continuous duration of twelve (12) months or more.

          X. Plan shall mean the Corporation’s 2005 Stock Incentive Plan.

          Y. Plan Administrator shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.

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          Z. Service shall mean the Optionee’s performance of services for the
Corporation (or any Parent or Subsidiary, whether now existing or subsequently
established) by a person in the capacity of an Employee, a non-employee member
of the board of directors or a consultant or independent advisor. However, the
Optionee shall be deemed to cease Service immediately upon the occurrence of the
either of the following events: (i) the Optionee no longer performs services in
any of the foregoing capacities for the Corporation or any Parent or Subsidiary
or (ii) the entity for which the Optionee is performing such services ceases to
remain a Parent or Subsidiary of the Corporation, even though the Optionee 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 should such leave of
absence exceed three (3) months, then for purposes of determining the period
within which the option may be exercised as an Incentive Stock Option under the
federal tax laws (if the option is designated as such in the Grant Notice), the
Optionee’s Service shall be deemed to cease on the first day immediately
following the expiration of such three (3)-month period, unless Optionee is
provided with the right to return to Service following such leave either by
statute or by written contract. 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 Optionee is on a leave of absence.

          AA. Stock Exchange shall mean the American Stock Exchange or the New
York Stock Exchange.

          BB. 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.

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