NVIDIA 2003 Annual Report Download - page 58

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
who are not directors, officers or 10% stockholders. The 2000 Plan provides for the issuance of nonstatutory
stock options, stock bonuses and restricted stock purchase rights. Options generally expire in 10 years. The
Compensation Committee appointed by the Board of Directors has the authority to amend the 2000 Plan and to
determine the option term, exercise price and vesting period of each grant. Options generally vest ratably over a
four-year period, with 25% becoming vested approximately one year from the date of grant and the remaining
75% vesting on a quarterly basis over the next three years. Subsequent grants generally vest quarterly over a
four-year period. A total of 21,939,202 shares were authorized for issuance under the 2000 Plan. There were
10,720,060 shares available for future issuance as of January 26, 2003.
1998 Equity Incentive Plan
The Equity Incentive Plan (the “1998 Plan”) was adopted by the Company’s Board of Directors on February
17, 1998 and was approved by the Company’s stockholders on April 6, 1998 as an amendment and restatement
of the Company’s then existing Equity Incentive Plan which had been adopted on May 21, 1993. The 1998 Plan
provides for the issuance of the Company’s common stock to directors, employees and consultants. The 1998
Plan provides for the issuance of stock bonuses, restricted stock purchase rights, incentive stock options or
nonstatutory stock options. On the last day of each fiscal year, starting with the year ending January 31, 1999, the
aggregate number of shares of common stock that are available for issuance are automatically increased by a
number of shares equal to five percent (5%) of the Company’s outstanding common stock on such date,
including on an as-if-converted basis preferred stock and convertible notes, and outstanding options and
warrants, calculated using the treasury stock method. There are a total of 101,298,229 shares authorized for
issuance and 21,265,519 shares are available for future issuance as of January 26, 2003.
Pursuant to the 1998 Plan, the exercise price for incentive stock options is at least 100% of the fair market
value on the date of grant or for employees owning in excess of 10% of the voting power of all classes of stock,
110% of the fair market value on the date of grant. For nonstatutory stock options, the exercise price is no less
than 85% of the fair market value on the date of grant.
Options generally expire in 10 years. Vesting periods are determined by the Board of Directors. However,
the initial options granted generally vest ratably over a four year period, with 25% becoming vested
approximately one year from the date of grant and the remaining 75% vesting on a quarterly basis over the next
three years. Subsequent grants generally vest quarterly over a four year period. Options granted prior to
December 1997 could be exercised prior to full vesting. Any unvested shares so purchased were subject to a
repurchase right in favor of the Company at a repurchase price per share that was equal to the original per share
purchase price. The right to repurchase at the original price would lapse at the rate of 25% per year over the four-
year period from the date of grant. As of January 26, 2003, there were no shares subject to repurchase.
1998 Non-Employee Directors’ Stock Option Plan
In February 1998, the Company’s Board of Directors adopted the 1998 Non-Employee Directors’ Stock
Option Plan (the “Directors Plan”) to provide for the automatic grant of non-qualified options to purchase shares
of the Company’s common stock to directors of the Company who are not employees or consultants of the
Company or of an affiliate of the Company. The Directors Plan was amended on May 22, 2002.
Under the amended Directors Plan, each non-employee director who is elected or appointed to the
Company’s Board of Directors for the first time is automatically granted an option to purchase 75,000 shares,
which vests quarterly over a three-year period (“Initial Grant”). Previously, such a director was entitled to a grant
of 200,000 shares, vesting monthly over a four-year period.
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