NVIDIA 2005 Annual Report Download - page 103

(b) Except as adjusted pursuant to Section 12 of the Plan, however, no more than Sixty Million (60,000,000) shares of Common
Stock of the shares eligible for issuance under the Plan shall be issued upon the exercise of Incentive Stock Options under the Plan.
(c) The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.
(d) Prior to the Listing Date, at no time shall the total number of shares issuable upon exercise of all outstanding Options and the total
number of shares provided for under any stock bonus or similar plan of the Company exceed the applicable percentage as calculated in
accordance with the conditions and exclusions of Section 260.140.45 of Title 10 of the California Code of Regulations, based on the
shares of the Company which are outstanding at the time the calculation is made.
5. Eligibility.
(a) Incentive Stock Options may be granted only to Employees. Stock Awards other than Incentive Stock Options may be granted
only to Employees, Directors or Consultants.
(b) No person shall be eligible for the grant of an Option or an award of purchase of restricted stock if, at the time of grant, such
person owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any of its Affiliates unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of such stock at the date of grant, the exercise price of such restricted
stock award is at least one hundred percent (100%) of the Fair Market Value of such stock at the date of grant and an Incentive Stock
Option is not exercisable after the expiration of five years from the date of grant. After the Listing Date, this provision shall apply only
to Incentive Stock Options.
(c) Subject to the provisions of Section 12 relating to adjustments upon changes in stock, no employee shall be eligible to be granted
Options covering more than Four Million (4,000,000) shares of the Common Stock during any calendar year. This subsection shall not
apply prior to the Listing Date and, following the Listing Date, this subsection shall not apply until (i) the earliest of: (A) the first
material modification of the Plan (including any increase to the number of shares reserved for issuance under the Plan in accordance
with Section 4); (B) the issuance of all of the shares of Common Stock reserved for issuance under the Plan; (C) the expiration of the
Plan; or (D) the first meeting of shareholders at which Directors of the Company are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the first registration of an equity security under Section 12 of the
Exchange Act; or (ii) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.
(d) At any such time or times that the number of shares of Common Stock reserved for issuance under the Directors' Plan are
insufficient for the purpose of making one or more of the non−discretionary grants of options specified in Section 5 of the Directors'
Plan, then, without any further action of the Board, the number of shares of Common Stock remaining in the share reserve of the
Directors' Plan shall be applied to such non−discretionary grants on a pro rated basis, and any additional number of shares of Common
Stock required for such non−discretionary grants of options shall be deemed to have been made under this Plan but on the terms and
conditions specified in the Directors' Plan. In the event of any conflict between the terms and conditions of the Directors' Plan and this
Plan, the terms and conditions of the Directors' Plan shall control. Notwithstanding anything in the Directors' Plan or this Plan to the
contrary, the terms and conditions of the Directors' Plan shall survive the termination of the Directors' Plan as to any
non−discretionary grants of options made pursuant to this subsection 5(d).
6. Option Provisions.
Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The provisions of
separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the
Option or otherwise) the substance of each of the following provisions:
(a) Term. No Option shall be exercisable after the expiration of ten years from the date it was granted.
(b) Price. The exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the fair market
value of the stock subject to the Option on the date the Option is granted. The exercise price of each Nonstatutory Stock Option shall
be not less than eighty five percent (85%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted.
(c) Consideration. The purchase price of stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is exercised, or (ii) at the discretion of the Board or the Committee, at
the time of the grant of the Option, (a) by delivery to the Company of other Common Stock, (b) according to a deferred payment or
other arrangement (which may include, without limiting the generality of the foregoing, the use of other Common Stock) with the
person to whom the Option is granted or to whom the Option is transferred pursuant to subsection 6(d), or (C) in any other form of
legal consideration that may be acceptable to the Board; provided, however, that at any time that the Company is incorporated in
Delaware, then payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made
by deferred payment. In the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be
charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of
any amounts other than amounts stated to be interest under the deferred payment arrangement.
(d) Transferability. An Incentive Stock Option and, prior to the Listing Date, a Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the person to whom the
Incentive Stock Option is granted only by such person. After the Listing Date, a Nonstatutory Stock Option shall be transferable to the