exhibit_10-2.htm


  

    Exhibit
10.2

     

    [SanDisk
Letterhead]

    


    ____________,
2008

     

    _______________

    _______________

    _______________

     

    Dear
___________:

     

    As you may know, Section 409A of the Internal Revenue
Code (“Section 409A”) imposes new requirements on a wide range of nonqualified
deferred compensation arrangements.  Section 409A defines
nonqualified deferred compensation arrangements broadly to include stock options
and other equity-based awards that do not meet certain requirements set forth in
the IRS regulations.  To the extent these awards had not vested as of
December 31, 2004 when Section 409A went into effect, they may be subject to the
requirements of Section 409A.  Failure to comply with Section 409A may
result in severe penalties for you under the tax law.

     

    The
purpose of this letter agreement is to amend the agreements that evidence
certain stock options granted to you by SanDisk Corporation (the “Company”) in a
manner intended to comply with Section 409A.  Specifically, certain of
your option grants include a “limited stock appreciation right” (the “Limited
SAR”) that would allow you to surrender your option for a cash payment if a
“hostile take-over” (as that term is defined in the applicable option plan) of
the Company occurs.  The Limited SAR provision may cause your options
to be treated as deferred compensation subject to Section
409A.

     

    Below
is a list of your outstanding option grants (your “Outstanding Options”) that
include the Limited SAR provision and had not vested as of December 31,
2004:

     

    
      	
              Date
      of Grant

              (as
      indicated on your

              award
      agreement)

            	
               

              Per-Share

              Exercise
    Price

            	
               

              Total
      Number of

              Shares
    Granted

            	
               

              Shares
      Not Vested

              As of
    12/31/04

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      


    

    


    By
signing and returning this letter, you agree that, effective immediately, your
Outstanding Options are amended so that the Limited SAR provision will not apply
to the portion of your option that had not vested as of December 31,
2004.  This letter agreement does not modify any other terms of your
Outstanding Options.  In other words, the existing vesting schedule
and other provisions of your Outstanding Options will continue in
effect.  This letter agreement also does not modify any portion of
your Outstanding Options that had vested as of December 31, 2004.

     

    This
amendment is intended to help you avoid incurring tax
penalties.  Please note that you remain solely liable for your own tax
liability with respect to your Outstanding Options.

     

    If
this letter accurately sets forth our agreement with respect to the foregoing
matters, please sign the enclosed copy of this letter and return it to
me.  Please contact me at [__________]
if you have any questions.

     

    Sincerely,

     

     

    
 

    [Name]

    [Title]

     

    Acknowledged
and Agreed:

     

     

    By:           

               [Name]