NVIDIA 2013 Annual Report Download - page 93

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Plan Administrator may also impose restrictions or conditions upon the vesting of stock appreciation rights that it deems
appropriate, provided that in the event that a participant’s continuous service terminates due to death, the participant’s stock
appreciation rights will become fully vested as of the termination date. Stock appreciation rights may be paid in our common
stock, in cash, in a combination of cash and stock, or in any other form of legal consideration approved by the Plan
Administrator and set forth in the stock appreciation right agreement. Stock appreciation rights will be subject to the same
conditions upon termination and restrictions on transfer as stock options under the Amended and Restated 2007 Plan.
Performance Awards. The Amended and Restated 2007 Plan allows NVIDIA to grant performance awards, including
cash and stock-based performance awards that may qualify as performance-based compensation that is not subject to the
$1,000,000 limitation on the income tax deductibility of compensation paid per covered employee imposed by Section 162
(m) of the Code.
A performance stock award is a stock award that may be granted, may vest, or may be exercised upon achievement of
pre-determined performance goals. A performance stock award may require the completion of a specified period of
continuous service. The length of any performance period, the performance goals to be achieved during the performance
period, and the measure of whether and to what degree such performance goals have been attained will be determined by
the Compensation Committee, except that the Plan Administrator also may make any such determinations to the extent that
the award is not intended to qualify as “performance-based compensation” under Section 162(m) of the Code. In addition,
to the extent permitted by applicable law and the award agreement, the Plan Administrator may determine that cash may
be used in payment of performance stock awards. In the event that a participant’s continuous service terminates due to death,
the participant’s performance stock award will be deemed to have been earned at the target level of performance, will be
fully vested and will be issued promptly following the date of death.
A performance cash award is a cash award that is payable contingent upon the achievement of performance goals during
a performance period. A performance cash award may also require the completion of a specified period of continuous service.
The length of any performance period, the performance goals to be achieved during the performance period, and the measure
of whether and to what degree such performance goals have been attained will be determined by the Compensation
Committee, except that the Plan Administrator also may make any such determinations to the extent that the award is not
intended to qualify as “performance-based compensation” under Section 162(m) of the Code. The Plan Administrator may
specify the form of payment of performance cash awards, which may be cash or other property, or may provide for a
participant to have the option for his or her performance cash award, or such portion thereof as the Plan Administrator may
specify, to be paid in whole or in part in cash or other property. In addition, to the extent permitted by applicable law and
the applicable award agreement, the Plan Administrator may determine that common stock authorized under the Amended
and Restated 2007 Plan may be used in payment of performance cash awards.
In granting a performance award intended to qualify as “performance-based compensation” under Section 162(m) of
the Code, the Compensation Committee will set a period of time, or a performance period, over which the attainment of
one or more goals, or performance goals, will be measured. Within the time period prescribed by Section 162(m) of the
Code, at a time when the achievement of the performance goals remains substantially uncertain (typically no later than the
earlier of the 90th day of a performance period and the date on which 25% of the performance period has elapsed), the
Compensation Committee will establish the performance goals, based upon one or more criteria, or performance criteria,
enumerated in the Amended and Restated 2007 Plan and described below. As soon as administratively practicable following
the end of the performance period, the Compensation Committee will certify (in writing) whether the performance goals
have been satisfied. With respect to any award intended to qualify as “performance-based compensation” under Section
162(m) of the Code, the Compensation Committee may reduce or eliminate the compensation or economic benefit due upon
the attainment of the applicable performance goals on the basis of any such further considerations as the Compensation
Committee may determine.
Performance goals under the Amended and Restated 2007 Plan will be based on any one or more of the following
performance criteria: (1) earnings, including any of the following: gross profit, operating income, income before income
tax, net income, and earnings per share, in each case with any one of or combination of the following exclusions or inclusions:
(a) interest income, (b) interest expense, (c) other income that is categorized as non-operating income, (d) other expense